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For example, the last day on the right hand side of the chart was 11/24/2008 and since it closed with everything green (vertically) below the last candle, then I would stay with the long trade that I would have entered a few days earlier when the change from black to green occurred.... probably on the white diamond.
A person trading the long side during this time might have actually made a small profit. How many of us sat through this like deer in the headlights? (like me!). A lot of folks are predicting a sudden collapse in the market any day now. It could happen I guess but looking at the top left side of the screen to the...
Clearly, the expected benefits of tax cuts and reforms is leading investors to overpay for something today they are hoping will become fairly valued tomorrow. In other words, instead of prices catching “down” to market fundamentals, investors are hoping fundamentals will “catch up” to prices.
Despite many who are suggesting this has been a “rational rise” due to strong earnings growth, that is simply not the case as shown below. (I only use “reported earnings” which includes all the “bad stuff.” Any analysis using “operating earnings” is misleading.)
The chart below shows the 1000-point milestones of the Dow going back to 2009. After a long break between 18,000 and 19,000 in 2015 through the election in 2016, the Dow has surged higher ticking off 4-more milestones in less than a year.