Santa Clause Rally...

Wow!  What a difference one short year can make.  Regardless of your political preferences no one can argue that the past year hasn't been one of the largest all time bull rallies in history.

On December 26, 2018 the S&P ticked at 2316.75 and since then has ripped over 870 points to the upside... YES 870+ and who knows how much higher the markets will continue this surge.

In December of 1996, then Fed Chairman Alan Greenspan coined the infamous term "irrational exuberance" and used it in a speech to describe the dot com market hey days.  Eventually he was right but the market continued its irrational behavior by continuing to climb another three years before the dot com bubble ultimately burst.  Three additional years of irrational exuberance when many said "this market simply can not keep going higher" but it did.  Many of those same people also said things like what goes up must come down and boy did that turn out to be true.

Basically, all the market does is cycle.  It cycles on all time frames.  It always has and probably always will.  But how can we know when the cycle turns?  In a simple answer, we can't ever know for sure. 

We're not in the prediction business, rather we react to market cycles and trade setups that provide edges in our favor.  We don't ever try to call cycle tops or cycle bottoms but we do utilize technical analysis to identify the direction of the trend and statistically valid entry and exit levels.  

With 2019 and this decade quickly coming to an end there's bound to be headlines of those who are making bold predictions about the future of the markets.  And sure, there may be some catchy headlines and possibly even "big names" who jump in the news cycle but always always keep in mind that we should never place any expectations on the market except knowing that the market can do whatever the heck it wants... at anytime.

So now that we've made that point we'll finish by wishing everyone a happy and prosperous new year!