You’ve heard of a Market “melt down,” but probably not a “melt up.” What a great turn of phrase that is. I wish I was able to come up with clever phrases like that, but I cannot claim that one. That is a headline from an article in Barron’s by Kopin Tan, you can read it here.
Kopin makes some really good points in the article. Namely, that despite some pretty significant uncertainty and several unnerving things like “nationwide protests, constitutional confrontations, disquieting headlines, fake news, alternative facts…” the market continues to rally and put in new highs.
I’m all about reality and I’m trading the reality of the markets and the reality is that it is going up. I am long several positions and we are in healthy profit on most of them. As long as the market goes up, I’m going up with it.
This is the second longest Bull Market in history, only behind the 1987 – 2000 run in terms of timing.
But, I’m not naïve and I have not forgotten history. I know that all Bull Markets end and eventually correct and I am watching very closely for evidence of when that will happen. When it does happen, I will be there and the profits will be amazing. Meanwhile, I am going with the trend and using very, very strict risk control so that when the turn happens, I will lock in profit and any losses will be very small.
Gold just continues to establish a reality of upward movement. We just closed another profitable trade on a Gold related ETF and I am looking for more. Interesting that Gold is rallying along with the major indexes. That is not a historical relationship and is probably not going to continue. Stay tuned on that, I will continue to update.
Oil is showing some (meager) signs of strength and there is early evidence that the uneasy alliance of Oil Producers is actually holding up and they are cutting production. ~$56.26 is still a key level of Crude Oil futures. If we stay below that level, then Oil is likely to continue in the volatile channel that it has been in. If it can break above that level with some momentum, watch out! We just might have a rally on our hands.
That’s it for this week. I’ll continue to provide updates as reality asserts itself on the markets and the story plays out. Trade safe, use Risk Control and keep your winners big and your losers small.
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