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Trends

January 14, 2013 – 6:13 pm

stock_charts_250x251We have been in a bull trend since the stock market crash of 2008 that lasted until March of 2009. There have been significant corrections, the strongest coming in the summer of 2011 with an almost 20% fall in stock price. In 2012 we only experienced about a 9% correction. There is an old saying, ‘the trend is your friend’ and we certainly are on an upward trend.

Trends last as long as they last. Predicting their end is impossible. We know from history that this current trend is a long one. We also know from history it too will end. Traditionally trends end when they turn up or down by 20% or more. So this current bull trend will end with at least a 20% fall.

The answer everyone wants is when? With expectations for corporate earnings so low while the FED is still easing money and an improving Asia the trend is likely to continue into 2013.

Stay with the trend until it is no longer your friend. Hopefully, we will see some evidence of its eventual demise before it actually takes place.

Good Trading
Steve Peasley

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