With the Dow rising 9 of the past 10 weeks, you once again hear all the exuberance from analysts in the financial media that you heard in late September 2018.
Over the last two months, the major indices rallied strongly from their December 24, 2018 bottoms. However, most reached their November 2018 highs and have since turned lower, running into strong resistance.
Read the excerpt below from our new Wellington Letter explaining what this shows about the current state of the markets and where it could likely go from here...
The Wellington Letter
March 4, 2019The stock markets have had a big rally since the plunge ended on Christmas Eve. There are no signs of significant investment buying.
In fact the chart below shows institutional investors selling during the entire rally of the first two months of the year.
So you wonder who has been doing the buying to drive stocks higher?...
Institutional Investors Money Flows 2018-2019
In February, buybacks, which we call "financial engineering," started again supporting stock prices a little longer.
We have been very cautious during the rally, after advising to close out shorts in our trading services on January 4, which was beautiful timing…
The markets are seemingly pushed upward by vapor. Valuations are sky high, volume is declining, exposing a demand vacuum.
They say the S&P 500 is having its best start to a year since 1987. Sounds great, right?
But that year we had a monumental, record crash.
Right now we see some ominous similarities in this rally to 1987…
This is the time when many novice traders may say, "don’t bother me with the facts, the market is rising and I just want to buy."
We say, buying now is like walking through a mine field or playing Russian Roulette.
Are you as confused as most investors about the next big move in the markets? Have you bought during the rally and now uncertain about if you should be selling, holding, or buying more?
With the Wellington Letter, you can learn more about our current outlook, the evidence behind our forecasts, and what serious investors should be doing with their portfolios now.
So what are you waiting for? Get our latest 23-page issue today!
We provide you with our latest independent research, technical analysis of important charts, and our astute forecasts in our March 4, 2019 issue of the Wellington Letter!
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