It looks like the bull market will continue. I have been busy the last couple weeks and have not had much time to trade. That will change soon. Which is good, because I don’t like losing to the market. Up for the year, but the market is beating me by a point. Most of that is a function of the lack of time I have to trade the last couple months.
May is historically a good month for the market. There is no reason to believe that won’t continue. Especially since we had such a strong April.
There are a few bearish divergences forming. Not reading much into that at the moment except for normal, orderly pullbacks in a market that appears headed higher. The one I watch the most is the rolling 52 week NHNL
I have significant concerns about the market’s health in the long run. However, that does not mean, don’t enjoy the ride up in the near term. It will allow for a better return short selling when the everything asset bubble finally breaks. The Shiller ratio continues to be at all time highs:
Source: https://www.multpl.com/shiller-pe
Same with the Buffett indicator.
Source: https://en.macromicro.me/series/617/wilshire5000-to-gdp
Essentially. The market is over double the value of the GDP. Incredibly high by historical standards.
Market tops can take quite a while to form and it does not look like one is forming now. This overvaluation of the market can go on for years (as evident by the last few years). When it does end, it will be ugly for most. It will also be a spectacular buying opportunity for anyone just starting out or has kept cash on the sidelines and enter closer to the bottom.
I continue to use hourly charts for swing trading. That seems to be the best for me at the moment. I then check the market a few times a day. Currently using only 30% of my cash at the moment. That is up from 10% the first few months of the year. As I get more time the 2nd half of the year, I plan on deploy more cash as I have more time. For how conservative I have been with my cash usage, my return is pretty good so far!
