And so it goes on . . !
The bull market, I mean. It’s not making new highs but its only 0.35% away from its all-time high on Monday. Interestingly, there is still a lack of euphoric headlines. Any headlines that mention a new high (and in recent weeks sometimes we have had a new high every day) are usually followed by some dire prediction from a market guru or some reason that its a mistake. Yes, there are lots of reasons that the market should not be going up – it seems, however, that someone forgot to tell the market!
TINA
One reason could be TINA, an acronym that I thought was coined fairly recently, but on checking I found it started in the 1800s. It stands for ‘There Is No Alternative’ and is used to explain decisions that seem less than ideal. It is used in the stock market to explain that stocks are rising only because there is no viable alternative.
Are we seeing a TINA effect? Possibly. With interest rates so low holding cash does not make sense. Property has a steep barrier to entry, and after the covid emergency rental provisions from 30 March 2020 to 28 March 2021 many people may think twice about investing in rental property. Gold and other commodities are not easy to invest in other than through the stock market. So, yes, I think that the TINA effect is, at least, a factor.
Is the bull market going to end? Yes, of course it is – sometime. The problem is that we don’t know when. Many of us have been expecting it for years now and so far, we have been proved wrong. One day we will be right – but whether it is days, weeks or years away we just don’t know.
Playing with Risky Investments?
This part is only if you are having a small flutter on OTM options. I know that most of you are following the ITM strategy – but that doesn’t mean that you can’t have a ‘play’ account where you put a small part of your capital (only funds that you are prepared to lose) and try out some riskier trades like OTM options. If you are then you may wish to consider the following.
The strong up trend since early October has pushed the market up by 9%, and if you are using the MACD you may want to watch the next few days because the histogram is getting close to the zero, and if it crosses it may be an early signal of a reversal.
If you don’t know about the MACD, don’t worry, it is not part of the ITM strategy. It is part of the new ITM Bear Strategy, and it is all explained in the next ITM book, speaking of which:
In The Money: Bear Market Strategy
The new book in the ITM series will be published on 25 November 2021. There will be eBook, paperback and hardcover versions. The eBook will be available to ITM readers for half price for a few days so put a reminder in your calendar.
Then we will have a bull strategy and a bear strategy. Whatever the market does we are covered!
