Market Records Being Set on a Regular Basis

Almost each day we are seeing big swings and historical records. There are many historians that have watched the markets for decades and have databases full of history. But the stock market is a very different animal and it changes continually. So it is really stretching it to say, based upon the data/conditions we see today this same pattern happened in the past and now we should start to see this now happen. In some cases, this hypothesis may take place and history repeats itself. But as we like to say – we’re not in Kansas anymore!

There are many factors that make us, that while comparing present day conditions to historically similar conditions could be helpful, planning for the same outcome could be dangerous. News travels at light speed so when Trump tweets that we are going to impose tariffs on China to the tune of $100 billion the market jumps. We can agree with many of the pundits that the market likes stability and to know what the future holds. The tit-for-tat trade war rhetoric has the market unstable as you can readily see from the big price swings. Because the market is moving fast and unstable it has become increasingly hard to identify a clear directional trend. So the number of alerts sent has slowed. We have an old active alert on AT&T and we just issued one Friday on the QQQ ETF.

Getting back to comparing historic patterns to today and why that may not be wise. In addition, to the speed of news, we also have algo/quant trading, high speed trading, and the list goes on and on. When the computers see condition X occur it executes Y and the market keeps jogging along. But we want market movement (just not so fast) because as we identify the movement we want to capitalize on it. Thanks to everyone and we will keep you updated on the two current alerts.