Last week I mentioned how concerned analysts and journalists were at the "advanced" age of this eight-year, six-month-old bull market – though, in fairness, these same folks were fretting about age when the bull turned four… five… six…
Now, age is certainly something to keep in mind (preferably at the back of your mind) when you're in the markets, but by no means should it be the thing driving your thinking or trading.
It bears repeating: The market's all-important narrative – the "case for investment," the broader economic picture driving prices and earnings, and informing the trading public's perceptions – should be uppermost on your mind.
That's because the narrative will tell you which stocks and sectors are likely to advance and decline – where money is flowing in the markets. More importantly, the narrative will point you to the profitable price "extremes" like the ones we exploit when we take down triple-digit gains in Stealth Profits Trader.
Right now, the narrative is still driven by growth prospects, though it's competing with a Fed policy-driven narrative. That competition's not going to last forever, and when the changeover happens… watch out.
Fortunately, I've got some charts that will show us how we can measure, empirically, the strength and state of the bull market, and how likely it is to drop at a given week.