The next week: 2018 investment or trading?


A drop of 100 points on Wednesday was enough to tense some of the bullish television analysts now that they warned they should be late. Like most of 2017, the stock market hit a new high in the next two days.

A bullish start to 2018 may reinforce the view many consider as investment or buying and holding the market. Spyder Trust (SPY) reported a 21.7% increase in 2017, especially for investors nervous about most of the year.
This is the third best year in the bull market as SPY rose by 26.37% in 2009 and by 32.31% in 2013. Of course, 2017 may be ebbed because of a lack of major adjustments. This makes it hard for those who scare off the market and wait for correction back to bulls.

But does that mean the market for 2018 will be the same as for 2017, or will investors in 2018 be better than investors?
The weekly closing chart for the S & P 500 shows that after a good year of growth in 2009, it fell 16.7% in 2010 and ended the move on the New York Stock Exchange A / D (an index trader must follow) early in September To new high.

With a 19.4% adjustment that led many to believe the bull market was over, we fell into another recession, a year of rough buying and holding in 2011. As of mid-October 2011, the A / D indicators showed the bull market has resumed.

In contrast, 2012 performed quite well, with a yield of 15.99%, although there were 9.9% and 7.7% corrections by the end of the year. Even the 2013 performance was interrupted by a 5.8% correction. Even with 5.8% and 7.4% of the decline, the 2014 growth rate of 13.46% is also considerable.

The markets in 2015 and early 2016 were very tough as the double-digit downturn in August and early 2016 drove many markets down. Bull market For the first time, the weekly A / D line formed a bearish divergence in May, causing the stock price to plunge in August.

There are several other times, the S & P 500 index rose for many years.

After the stock market crash in 1987, the stock markets in 1988-1999 and 1991-1993 all went up. When the S & P 500 rose 100%, the biggest gain was in three years 1995-1997. It also dropped in 1998, dropping by 19.3% during the year.

Before I moved from biochemistry to financial markets, I spent a fair amount of time studying the history of electronic stock markets between 1965 and 1980, and I have been full-time enthusiast ever since. As I commented in the past two months, I expect the current bullish enthusiasm will last for months.
For those who are relatively new in the stock market, annual SPY 2013 performance could mean a market similar to 2017. The S & P daily closing chart shows only a very different picture. The S & P index also dropped sharply in August and September from its high in May.
In contrast, the 2017 chart looks a bit different, as the uptrend shows no interruption. A slight pullback occurred in April (bullish evidence building) and the end of summer (what has been fixed and where did we buy it?), But both were considered good buying opportunities.

There seem to be a lot of investors now involved in the stock market, hoping for a firm plan to keep it until there are signs of a major correction or a bear market.

Analysis of the A / D lines is a regular part of my weekly column, with no sign of correction based on weekly or monthly A / D lines. The daily A / D line analysis I launched last week is still strong and usually takes weeks to get into corrective mode.

Even without a stormy cloud, I still expect one or more meaningful adjustments in 2018. This is partly due to my historical observation of market psychology fluctuations. Traders usually feel depressed when the market is not correct and then decide to become an investor. Now everyone wants to be an investor, but only a few corrections of 5% or more to change their perspective.

In more than 30 years of teaching in the market, I have often been asked to be a good investor or trader. Long ago, I came to the conclusion that the answer is based on personal lifestyle and response to risk. If in the past when the market is drastically adjusted or hesitant at the bottom of the market, then investor tracking may be the best for you.

Those who are disciplined and do not want to dwell on the past tend to be good traders. Traders must make more decisions so they have more chances to guess your decision again. In my guidance, I found that math ability is also an extra bonus.

Since I provided advice from investors and traders in the Vi snake ETF report, I was often asked if the advice was different. The recent market has been characterized by industry rotation, the industry may rebound for a few weeks, then sideways for several weeks, while other industries are on the cutting edge.


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