The 2017 parabolic movement may have all been anticipation of economic stimulus under Trump's anticipated pro-business policies. But counting one's chickens before they hatch is not a sure thing. So we may be seeing estimate corrections upon realization that Trump is a mixed bag. Even if his trade-war plans bring future growth to US businesses, in the interim it may have non-trivial consequences for equities.
Let's hope it's not another dead-cat bounce. It's soooo easy to be lulled into believing we're back on an indefinite roll, back in the saddle again. What could possibly go wrong! Well, given the track record of late, almost anything could go wrong, talking heads might even be scratching their heads trying to figure out what went wrong after the fact. So there's still every reason to restrain optimism and exercise caution.
If this upward movement follows the pattern, it will crash soon because each saw-tooth spike has failed to regain the height of the prior saw-tooth peak. Moreover, the upward slope of this movement is too steep to be 'real', which is to say it's the sustainable slope of a bull run, it's still part of the fear-mania volatility we find ourselves in and I suspect that won't soon vanish.
I meant: which is to say it's NOT the sustainable slope of a bull run...
Let's hope it fails to follow the downside! Next I'll post a close up...
But I hope my prediction falls apart next week with indices steadily climbing!
At this point I think the market is going to fall further before it recovers. I'm inclined to say the wise investor has cashed out. Scrolling back through the available history it's hard to find another case among indices where a series of lower lows and lower highs marks the bottom of a downturn. Almost with certitude it marks the edge of a cliff whose bottom is yet to be found. :(
Noteworthy is the view of famous investor Jack Bogle, who says this is the most volatile market he's seen in his 66-year career. Reviewing other rough spots, what strikes me as outstanding about the current turbulence is not so much any one downward movement but the continuity of many dramatic falls and rises.
The upward movements are as infected with the 'volatility virus' as the downward movements, tracking upward slopes far steeper than representative of a healthy sustained bull run, ie, they are unsustainable upward movements. Investors are both selling and buying in panic mode. Will the market just smooth out and return to bull, or does it foretell a recession?
yet to push through. But there's also an indication of upward trending with a couple higher lows. So maybe momentum is building to break out and up.
At least the magnitude of this dip so far isn't dramatically greater than other dips post-2009.