For the first four months of 2019 we have seen one of the strongest bull markets we have experience in decades. In fact, over the last 6 months or so, investors have experienced one of the most dramatic sell-offs ever, followed by one of the biggest up moves. If you look back over the last 10 years or so, you can see how dramatic these moves have been. Take a look at the from 2009 to 2019:
If you look to the far-right side of the chart you will see this sharp sell-off followed by the strong rally which we are currently in. As we look at the charts below, you will see the prices are continuing to test out the all-time highs. This move, in part, is due to the overall strength in the economy. This week we saw some overall positive reports come out as the Fed Meeting was reported on and on Friday, we saw the drop to 3.6%, the lowest levels since the 1960’s. While we know this won’t last forever, we also don’t want to think it is going to change quickly. Doing so will put us in the mindset of trying to trade what we think might happen when we still need to trade what is actually happening. The markets will change, we just don’t want to expect it before the evidence on the charts actually support that the change is happening.
Let’s take a look at how the markets performed this last week.
The chart above is the weekly candlestick chart of the DJ-30. This means that each of the candles represent the 5 trading sessions of this last week. Looking at these candles, you can begin to see that they are becoming