2016-07-03
On June 24, I wrote here that “if you review my recent blogs you will see that I believe the price of gold is on the way to 1,900 and that equity prices would only briefly be held back from a strong Bull run to Dow 24,000. Had the REMAIN vote won, I believed that a bullish phase would have commenced immediately. Today the uncertainty will clearly knock prices down to a 4th test of Dow 17,300. Individuals who do not know how to trade will sell and the 10% or so who are skilled traders will buy into the weakness. Once the base is solidified above 17,000, the Dow is on its way to 24,000… These are historic times. Remember, the market is a game that plays people, and there are seldom times like this where the powers that be are in full-out spinning mode. Don’t get played.”
As you are now aware, a great many traders were definitely played as losers. The Dow dipped to 17,356 that Friday and briefly touched 17,063 during the following Monday session, closing at 17,140. After lifting over +5.0% four sessions later, the Dow closed this week at 17,949, having touched an intra-day high of 18,002.
So now you know the rest of the story.
This weekend we started posting the Daily Lessons under a different tab on this website. Three down and 117 to go. We also changed the look and format of the website. Feel free to comment as I am back in the game and ready to make whatever improvements the Cara Community would like.
For those who are concerned about high valuations, I have already opined that they are going to go higher. A lot higher. If your intent is to seek capital growth, how to manage this problem is to focus on Value stocks of high quality companies. You later sell them when they are no longer value priced. Then, after the broad market declines in what is known as a Bear phase, you switch your focus back to the stocks of Growth companies. If you have a short list of candidates, this is not a difficult strategy to use.
With the Clinton-Trump match-up and the post-BREXIT politics in UK, these are very interesting times. McDonald’s advertising says it all: “I’m loving it.” Now, more than ever is the time to focus on prices, not stories.
Have a great day.
/Bill
