Don’t be the Turkey
The markets are playing catch up after a sloppy summer, pushing extreme overbought conditions, and the Fed is keeping interest rates unchanged. Combine this with a sharply higher dollar, and you have all the makings of a rather nasty correction.
Excessive market valuations, weak internal measures, and a deteriorating backdrop have historically been a wicked brew for investor outcomes.
While markets can certainly remain irrational longer than investors can remain solvent, the secret to solvency is understanding when to make an investment bet. A professional gambler only goes all-in when they know they have a winning hand. They also know when to fold and minimize losses. For long-term investors, the risk to solvency greatly exceeds the reward currently.
For short-term traders, a breakout to new highs will likely provide a short-term trading opportunity to speculate in the market. However, gains will likely be limited and risk of failure is high.