Find The Best Stocks With Perfect Trade Setups In Minutes A Day

Stop wasting time looking for the right stocks.  Free training on how to find perfect stock trades that can move 300-1,500%.  Learn the # 1 key to successful stock investing and how to find success even If the market is crashing, rebounding… or just going sideways. (ad)

Do Not Delay - Click Here Now

 

Why We May Be In The Midst Of A ‘Blow-Off Top’ Rally

The euphoric rally seen in the last couple of months could mark the end of this bull market. Here’s why. 

December has gotten off to a rocky start.


Hey, do you want to be the next stock market millionaire? This free training lays it all out for you! Check it out here.


Between mid-August and the end of November, a 74-trading-day stretch, the Dow Jones Industrial Average gained 10.1%, the S&P 500 is up 10.6%, and the Nasdaq has jumped 11.5%.

But this euphoric rally seen in the last few months is reminiscent of the kind of rally that has market the end of other bull markets, or what’s called a “blow-off top.”

The Dow in particular has gained an average 13.4% during blow-off tops dating back to 1901, according to Ned Davis Research. And the average length of such rallies was 61 days.

Source: CNBC.

“Given the high valuations I see, plus these divergences between many different indices, I am aware that many bull markets have ended with a rally similar to what we have seen since August,” Ned Davis wrote in a note.

Looking back, a rally similar to the one we’ve seen in the last few months happened between October 15, 1999 and January 14, 2000, or just before the dot-com bubble burst, when the Dow gained 17% in just 64 trading days.. And another happened between August 16, 2007 and October 9, 2007, or just before the financial crisis that sparked the Great Recession. with that rally, the Dow added 10.3% in 38 trading days.

In the last few months, the market has surged higher as the Federal Reserve has cut rates twice since August, and the U.S. and China have moved closer to striking a phase one trade deal.

But rhetoric on both fronts has changed. The Fed has said it’s done cutting rates for now, and while both the U.S. and China have said that trade talks are moving forward, there has recently been contentiousness on both sides. China retaliated after the U.S. signed a bill into law supporting protesters in Hong Kong, while President Donald Trump said this week that he’s in no rush to sign a trade agreement with China and would be content waiting until after the U.S. elections next year to make a deal.

However, despite all this, the market just kept climbing last month, in a “melt-up fashion,” according to Yardeni Research president Ed Yardeni.

And Wells Fargo Securities head of equity research, Christopher Harvey, said that the key catalysts that have driven the market higher in recent months have been “played out.”

“What we’re left with is near-term sentiment and near-term sentiment being he driver of prices,” Harvey said. “That could be based on a tweet. It could be based on positioning.”

So far in December, the Dow is down nearly 432 points spurred on by pessimism regarding the U.S.-China trade deal. 

And if the two countries don’t have a deal by December 15, when the U.S. has plans to unleash tariffs on another $156 billion worth of Chinese goods, “then there’s another sell-off,” said UBS’ Art Cashin.

“If they put on additional tariffs and [Trump] bumps them by 10% to 15%, a sell-off but nothing severe. 50% or something like that? Better put on your helmet,” Cashin said. 

While the Dow is down so far this month, and could be headed lower in the near-term if new tariffs go into effect, Baird’s Willie Delwiche says investors shouldn’t be too concerned.

“A pause after a two-month rally shouldn’t be surprising,” Delwiche said. “And it shouldn’t preclude from strength over the latter half of December, which is when we tend to see seasonal strength for the month.”

By the way, if you liked this article, you'll LOVE this Meaty free training I just published on the top 3 questions and challenges every investor faces AND how to overcome them. It's titled "10k into $2.4 Million in 18 months" and you can grab it for free here

There are risks inherent in all investments, which may make such investments unsuitable for certain persons. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. You may lose all of your money trading and investing. Do NOT enter any trade without fully understanding the worst-case scenarios of that trade. And do NOT trade with money you cannot afford to lose. Past performance of an investment is not necessarily indicative of its future results. No assurance can be given that any implied recommendation will be profitable or will not be subject to losses. Information provided by the Company is not investment advice. The Company is not a registered investment adviser, stock broker, or brokerage. You agree that the Company does not represent, warrant, or take responsibility that any account will or is likely to achieve profit or losses similar to those shown. Examples published by the Company are selected for illustrative purposes only. They are not typical and do not represent the typical results of all stocks within the Companys software or its individual scans and searches. No independent party has audited any hypothetical performance contained at this Web site, nor has any independent party undertaken to confirm that they reflect the trading method under the assumptions or conditions specified.

FREE TRADING WEBINAR - TRADERSPRO PRESENTS: Starting With Only $10,000 Retire With $2.4 Million? Click Here Now

Join Us Now
X