Price rules once again in the US market, there show a divergent in indicator Vs price. Indicator are showing that price should go down. Price on the other hand just keep moving up. So that why we see S&P500 making historical high again.
Will there be lesser upside if an indices moved to historical high?
The answer to this is no. No statistical proven that this has happen. What went high can go higher and what go low can go lower. These happen during certain period of time. Honestly there is no indication in the fundamental data that I have that a huge drop is coming. These data actually show and support the up move and further up move. But I do think a dips or consolidation should take place.
Traditionally these period into Sept will have wild market swing in a consolidation range. Then into October is when the market will start to have up lift. This is just a guide so do not follow it like a holy grail.
The up lift in the market will be a global issue. The strongest market will move and bring the weaker ones along. China in my analysis will bottom soon and should be the next engine in the equity area.
Why actually market goes up these question had a lot of people asking me. If I had to answer them the right way I will say that the global economy are turning better. It is slow but there are slow progression. There is a US election coming up in Nov so chances are the market will move higher.
The real and right way that is in my own reasoning and I see from my data and indicators are there are lots of buying going on. More retails account are selling or shorting. The big boys on the other hand are accumulating since the start of the year. Knowing the real reason do know fetch you profit. Knowing what they are doing does.
I do see that gold will come off. But it is in a no mans zone now. More to the upside in price. But fundamental data totally do not support this price. I do see more retail buying and the big boys are selling.
In investing that I know and learnt is do not follow the herd. Usually following the herd do know get you anywhere. However the Shepard is always the one that divert the herd to the desire place. Follow the shepard but don't trust the shepard. Because sometime we need to know when not to follow a person too closely, when to let go. The trick is how to differential a herd or shepard and how to differential when shepard is killing other shepard.