This has been a year of frustration for investors with a market full of choppy action over the past nine months. In fact during the past 90 years of Wall Street, there have been only eleven times when cash has actually outperformed the markets. At current money market rates, that’s not saying much.
But here’s the interesting part of this year’s direction-less market. In those previous 10 times when cash outperformed the markets what followed were explosive double digit gains over the next three years, averaging 14%, 19% and 17% respectively. This could happen again, especially since we’re already six plus bullish years from the 2008 market lows.
It could happen because bull markets don’t come to an end just because people think the bull is too old or has climbed too high. The end of a bull market won’t come until US Treasury yields start to significantly draw funds out of the markets. That doesn’t happen until yields typically climb to and beyond 4-5%. Until then, just as we saw in 2011, markets can bullishly catch traction again even after a deeper drop and a longer period of frustrating consolidation, similar to what we’re experiencing now.
Therefore in our Index Trading systems we continue to keep a short term perspective through this consolidation period.
Signal Pages Snapshots
U.S. Index Trader:
Canadian Index Trader:
Please contact us for any explanation. We would gladly help you!