Technically Speaking: A Warning About Chasing This Bull Market

This past weekend, we discussed the breakout of the markets to all-time highs.

The question I asked this past weekend was simply;

“The bull market is back, but can it stay?”

When I was growing up my father, probably much like yours, had pearls of wisdom that he would drop along the way. It wasn’t until much later in life that I learned that such knowledge did not come from books, but through experience. One of my favorite pieces of “wisdom” was:

“Exactly how many warnings do need before you figure out that something bad is about to happen?”

Of course, back then, he was mostly referring to warnings he issued for me “not” to do something I was determined to do. Generally, it involved something like jumping off the roof with a queen-sized bedsheet convinced it was a parachute.

My argument was always that “everyone else is doing it.”

After I had broken my wrist, I understood what he meant.

(What’s funny is that I am having the same conversations with my son today, and he is determined to figure out things the hard way simply because “everyone else is doing it.” Now, I truly understand what I put my Father through.)

Likewise, investors are currently rushing to get back into the market, after bailing out in December, with a near reckless disregard for the consequences.

Simply because “everyone else is doing it.”

So, before you go “jumping off the roof with a bed sheet for a parachute”, there are some warning signs to consider before taking that leap.