Will the Market Crash?

In my estimation, it's anyone's guess.

And that's what I bet you will hear from every newsletter and analyst out there. You will hear good reasons why the market must crash, and good reasons why it can't crash. The sum of it is that no one knows for sure, but everyone has an opinion.

So what I'm waiting for is confirmation of a new intermediate trend low in both DJI and DJT. If and when this happens, we will be off to the races.

For what it's worth, from what I can see there is no clear set-up yet for a market crash. What is actually setting up looks to be the next leg of this historic bull run.

Another thing to keep your eye on is for divergence in the indexes moving forward. If the transportations make new all time highs and it isn't confirmed by the industrials, then I'll start to worry.

Fear and Gain

Source: Phobiawiki

If you've been avoiding the financial markets or investing in risky assets because "that's the only thing you can make money on these days", I hope you take this post to heart.

Should we be "Terrified" as the Dow breaks 25,000?

https://www.cnbc.com/2018/01/05/dow-25000-investors-should-be-terrified-about-dow-25000-analyst-says.html

The answer, I believe right now is No. Not yet. Based on what I'm seeing, not investing now would be a mistake. I can't say what all of 2018 will be like, but what I do know is that Dow Theory has been screaming "buy" for over a year.

 If you haven't been listening, now's the time to start - before it really is too late.

Trailing Returns

If you had invested EVERYTHING into the S&P 500, based on Dow Theory analysis and reinvested all of the dividends, you would be sitting on a 21.99% annualized return.

For long term investors, this is spectacular. Most long term investors want an average return of 10%. 12% is considered excellent over the long term. So consider that next year or the year after will see some movement into a bear market (maybe!). When that comes, we will either want to average down as the market bottoms, or we will want to have the guts to cash out proactively, ride the wave down and re-invest when the indexes confirm a reversal in trend.

The Best Investment Advice of 2017

The best investment advice of 2017 didn't come from a newsletter, the financial times, CNN, or MSN money. It came to you right here:Stay invested in the broad markets. They will keep hitting new highs until something materially changes.

We can maybe expect some profit taking as things get overbought, but both indexes have confirmed the primary trend as UP. Until this changes, the primary long term trend remains UP.

Take note and invest accordingly.

This is not advice for day traders, but for investors with long time horizons (5 years +).