If you’re on U.S market exchanges, trading on baskets of U.S. stocks based on recent green and bullish activity, tread carefully!
A Business Insider’s list of 10 things you need to know before the opening bell includes a rather prominent warning about market cycles:
“Full-cycle risks have a way of emerging in ways that investors wholly rule out at market peaks,” said John Hussman, president of the Hussman Investment Trust, in a recent note to clients according to current reporting by Jonathan Garber. “Glorious half-cycle market advances leave investors vulnerable to catastrophe, because investors hold contempt for anyone who suggests there may be a cliff on the other side of the mountain.”
More cautionary language is forthcoming from other corners of the financial media: calling today’s markets “mixed” this morning, MarketWatch talks about positive and negative forces citing easing U.S./China trade relations as a positive, and growth concerns as a negative.
Some stock markets dipped on Monday morning as a positive start to the US earnings season and a recovery in Chinese exports were trumped by continued fears of slowing global growth. Wrote Theron Mohamed this morning.
“Asian shares turned lower on Friday as trepidation ahead of the start of the U.S. corporate earnings season and underlying anxiety over the global growth outlook eclipsed some reassuring U.S. economic data,” added Andrew Galbraith in a Reuters report Friday.
So yes, SP500 and DJIA are both up – five day and one month charts are decidedly green – but walk carefully on that golden stairway, and take a look at hedging, buying on a dip, or otherwise protecting your money. It seems we are not immune to some upcoming dips and dives even with the market up as high as it is now – especially with the market up as high as it is now!