It's a Bull Market

And it's not worth fighting against it.

Do I believe that what we see in financial markets is rational? Absolutely not. However it doesn't matter.

If you had followed my line of thought in the last few months you would know that my base case was a sharp assets appreciation cycle fueled by irresponsible monetary expansion by the FED. It is playing exactly as predicted before our eyes.

What is even more interesting is that the real MELT UP phase hasn't quite started yet.

The 52 week high yellow banner on CNBC SPX chart has been pretty much a daily occurrence for the past few weeks. The slingshot move that started with the Corona crash in March 2020 is not exhausted yet. In fact by my calculations we will hit the 4,800-5,000 level before year end. I know it sounds irresponsible to say so, however math is math and extensions are projecting those nose bleed levels.

The road to 5,000 SPX should be fairly smooth in my opinion, with only one somewhat scary retrace mid year, to the tune of 7-10%. Therefore I believe the best strategy for 2021 is to stay the course and sleep peacefully at night.

Always remember not to fight a Bull Market, regardless how silly the price action might look.

From the perspective of sound financial metrics we are on borrowed time, however enjoy making money while it lasts. At some point in mid to late 2022 things will change and we will need to be much more vigilant as severe corrections will be around the corner.

DISCLAIMER:

The above are my opinions only. Due your own diligence and trade at your own risk. Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.