Makes you wonder why markets ever go down, doesn't it? They should just go straight up following your rationale because everybody will always think they're too high already.
That makes no sense at all. If enough people think the market will go lower it will go higher. If enough people think the market will go higher it will go lower. And of course if the camps are equal we will have a trading range.
I have some holds, but I've been mostly been sitting on the side to see what it will do. There's never a 100% in the market, but I don't think we're exhausted. I thought there'd be a bigger correction than this however, so maybe it's still to come. But we aren't in a recession, it's the 3rd year of a lame duck President, and while growth has slowed, it hasn't stopped. Further, everyone puts money in their IRA's, and the funds HAVE to spend it. So barring a terrorist attack or natural disaster, the worst this year is bounce around a lot. The best the market can do this year is take off. I don't think anyone knows right now which it will be. But I don't think this will be the year of the big crash. My opinion of course.
There will be a pullback, however when everyone finally notices the pullback it will be to late. As someone said you can look back from July to December and see the HUGE rally, at the time it was taking place you would have never thought that a close above 12k was possible, but fast foward to today and you can CLEARLY see it. What Im saying is if we are in the process of a pullback that by the time many notice it, it will be to late sell. You might think that today is a buying opportunity and go long only to see the dow trading lower the following day. You decide to add another position to average down and before you realize it the dow is back below 12k.
This reasoning is flat out incorrect. Markets move through buying and selling force. If everyone thought the market was overbought and stopped buying, it would stop going up. Plain and simple. RoughTrader