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"An object in motion tends to remain in motion until acted on by an outside force." – Simplified version of Newton's First Law
My Grandma Seymour was a gracious woman.
A godly woman. A woman of exceptional beauty (often mistaken as my mom's sister – much to Mom's chagrin…).
She was the quintessential Southern matriarch.
She ruled our family, not so much from a position of authority (though she had that), but rather from a position of repeated wisdom and gentleness.
When I grow up, I want to be just like her.
When anyone stayed at Grandma's house, they were awakened to an essential Southern breakfast feast.
Scrambled eggs. Southern biscuits and sausage gravy (or red-eye gravy, if you preferred). At least three varieties of homemade jellies and jam. Homemade apple butter. Sausage patties. Tomatoes. Always tomatoes. And then – the star of the show – country ham.
If you don't know country ham, you're missing out on one of life's delicacies. It may be my son's single favorite food. It's a salt and sugar-cured ham – a close cousin of prosciutto, though cut more thickly.
Here's the reason I'm telling you about this extravaganza – this was the layout at every breakfast I had at Grandma's house – ever. Even if it was just the two of us.
As I grew older and would go to see her by myself, I could have expected something different – something less expansive. But it wouldn't matter what I expected. I got the whole feast.
If you stayed the night with Grandma – even when she was a spry 95 years young – you got the full breakfast. Period. Why expect anything else?
But what does this have to do with the current U.S. markets or our journey together here at The 10-Minute Millionaire?
A lot, actually.
The markets are grinding up mercilessly.
And markets in a slow grind up typically stay in a slow grind up for longer than people expect.
Like wondering what's for breakfast at my grandma's house – why expect anything different?
Yet tons of people keep expecting the markets to go down.
Some are even calling for a crash.
I've got another take.
Let's look at it together…
Markets Will Do What They Want, but I Expect Them to Act Like They Usually Act
Let's start with a premise that markets don't flop from the top.
Said in a less kitschy way: Markets tend to make rounded tops before their biggest drops.
Let's look at three examples that most everyone will remember.
First the dot-com bubble:
Next, we had the real estate and debt bubble in 2007-08:
And lastly, we had the summer of 2011, when Standard & Poor's downgraded U.S. credit in the midst of the European debt crisis:
Today's U.S. markets are just pounding out one incremental new all-time high after another.
This is the second-longest bull market in the history of U.S. equities markets. Turning that statistic into a strategy and trying to exit too quickly could be a costly mistake.
And one we won't make here at the 10-Minute Millionaire.
We have made many new highs this year.
But that doesn't mean we can't make more.
Let's look at an interesting set of charts from LPL Financial Research.
About the Author
Nationally recognized technical trader. Background in engineering, system designs, and risk reduction. 26 years in the markets.