Stock Exchange: Are You Still On The Sidelines?

Our previous Stock Exchange asked the question “will market sentiment turn bearish soon?” We reviewed the continuing market rally, and warned against complacency in trading. If you missed it, a glance at your news feed will show that the key points remain relevant.

This Week: Are You Still On The Sidelines?

The stock market has been “off to the races” to start 2018, and that is creating an uncomfortably eerie feeling for many traders. Perhaps still emotionally scarred from the terrible start to 2016, some traders are missing out on the gains, choosing to instead sit on the sidelines.

According to famous hedge fund manager, Victor Niederhoffer:

“The stock market has had one of the biggest rises in the first two weeks in history and based on past years, it is due for a pull back.”

Niederhoffer shares a total of ten interesting observations in this recent article: Nobody Asked Me, But…

However, according world renowned independent trader and mentor, Charles Kirk:

“it still remains a bull market until proven otherwise. While we recognize the market is long overdue to see corrective price action, we are not seeing evidence of it in the price action other than very high levels of strength that can bring it on.”

Mr. Kirk’s private membership for investors and traders is an excellent way to learn if you can get into his class. Interestingly, Kirk goes on to say:

“This quant study most quoted in social media last week was this – when the first five days of a new year are up +2% or more the full year the follows has been higher 15 out of 15 times with an average +18.6% yearly return * Meanwhile, frothy market conditions remained the top focus by the quants again this week as study after study after study after study suggest potential for short-term consolidation but higher highs beyond it.”

Perhaps it is this short-term consolidation that many traders are waiting for as an opportunity to get off the sidelines.

Taking a different view on the right time to get off the sidelines is this article from The Trade Risk, which suggests “end of day trading is superior.”

Further still, this article from Adam H. Grimes suggests there are no shortcuts to becoming a world class trader. Grimes says experts know how to:

“cut through the garbage and to reduce any discipline to its most essential points.”

His article goes on to say:

“If you truly want to excel at something… You will spend hours, days, weeks, and years refining small elements of your approach. Some of this just takes time, and there are no shortcuts.”

Model Performance:

Per reader feedback, we’re continuing to share the performance of our trading models, as shown in the following table.

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The Stock Exchange does not have all the answers, but it provides good ideas and a stimulus for your own trading.

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