#863 November 8, 2017
  • Feature: One of the Best Bull Markets Ever by Van K. Tharp, Ph.D.
  • Workshops: Save BIG On Our Workshops For 2018!
  • Tips: U.S. Markets — A Key Indicator Stumbles by D. R. Barton, Jr.
  • FREE BOOK!: Trading Beyond the Matrix
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Feature Article

One of the Best Bull Markets Ever
Van K. Tharp, Ph.D.
Since March of 2009, the S&P 500 Index has gone up nearly four times in price. Now it has not always been going up since 2009, sometimes it has moved sideways. And this year, it’s only up about 15% but it doesn’t seem to go down. Furthermore, as of the October close, the S&P 500 has had 12 straight months of positive returns. My understanding is this hasn’t happened since 1935. For some time now in my monthly Market Update articles, I have noted that we often have 15 – 30 days out of 100 when the S&P 500 makes a new all-time high.
Van's Feature - Chart 1
Monthly Bar Chart for 25 Years of the S&P 500 Index

And I Think We Have Only Just Started

Why? First, investors are not happy about and are not involved in the market. I don’t hear waiters talking about how much money they made in the market like I heard in 1999. I don’t see 40 bookcases full of trading and investing books at Barnes & Noble bookstores… in fact, to the contrary, there are hardly any trading books out there now. What I have seen and continue to see instead is everyone being concerned about when and how this bull market will come to an end (see the figures below). To me that’s hilarious.
Van's Feature - Chart 2
From the article “A Death Candle for the S&P”… in 2015.

You should trade/invest based upon what the market is doing right now…You should not trade/invest based upon what you think the market might do one day in the future. So many people miss out on the best opportunities because they base their trading/investing upon what they think the market will do rather than what the market is doing. As I’ve been saying for years, you only trade your beliefs about the market. Beliefs grounded in what the market is doing are much more useful than beliefs grounded in “fear” or “greed” and beliefs about what might happen in the future.

We have had a bull quiet market for a long time now and that’s absolutely the easiest market type of all to invest in — bar none. It’s the one market where you can actually buy and hold (or my preference, hold using a 25% trailing stop).

When a market is up 400% we usually see euphoria. But as I said, these days I don’t hear waiters telling me they are traders and are just waiting tables on the side to earn a little extra money. Instead, I hear comments like the VIX is too low. That’s absolutely where you want it to be. The market type remains pretty safely in bull mode while the volatility remains low.

I read other comments like valuations are too high, the Federal Reserve is tightening, the market has been going up for too long, and we are due for a correction. Of course, I also hear that the world is falling apart — we have an idiot for a president, Trump will be impeached, and we could have a nuclear war soon. Most people are still focused on what will bring the market crashing down and they expect that to happen soon. While everyone feels that way, it will just keep going up.
Van's Feature - Chart 3
From the article "Brexit Could Bring S&P Down 40% in 2016"

High tech stocks are soaring. Apple now has a massive market capitalization of $872 billion. Look at the stock prices for companies investing heavily in artificial intelligence (Amazon, Apple, Google, IBM, Nvidia) which is one of the areas of the future. They are all going up nicely. Contrast that with the “very hot” though highly volatile cryptocurrency market which has a total market capitalization of about $200 billion.

According the New York Times, cash holdings by institutional investors and high net worth people are at record low levels. That’s not a sign, however, that the market will fall now. Meanwhile, many pension funds continue to avoid the stock market and instead, they are putting their funds into private equity investments. Private equity investments lock up money for a long period of time (often 10 years or more) and incur large fees.

The new fiduciary rules are scaring small-time operators out of managing pension funds — which puts pension fund money mostly in the lap of the big financial services companies. Brokerages have become concerned about their potential liability for pension fund management. For example, several years ago I was informed that my 401k plan retirement account no longer had any margin. As a result of trading restrictions like that, I turned all of my employee’s pension money over to a large company to manage (I still trade my own account). These are not the kinds of things that happen when everyone is euphoric and the market is in danger of falling. These are more the sort of things that happen in bear markets and tend to signal the end of the bear.

My old friend, Steve Sjuggerud, has been strongly bullish about the market since 2009. In the last year or two, he has been saying that he expects the stock market to “melt-up” which means he expects the gains will start to accelerate. I’m not sure about that but it could happen and I’ll continue to monitor the market type. Regardless, it’s certainly a good time to be fully invested. Quiet bull markets make everyone look like a market genius — if they participate.

Warning Signals

I’m not going to be concerned about this bull market coming close to an end until I start hearing waiters tell me they are actually traders and our technical workshops have waiting lists to attend. (We had a record 71 attendees at a stock trading workshop in March, 1999.) These type of events signal the beginning of the end for a bull market so I will begin to take notice but I still won’t worry that a major drop will be about to happen in the market. I will warn people to start monitoring the market and to start preparations for going short — but we aren’t even close to anything like that now.
PACKAGE 1 — Up to 10 Workshops in 12 months
(January 2018 - December 2018)
How does $1,250 per workshop grab you? Yes, that discount applies to workshops that are normally priced at $3,995! This includes all workshops we offer, even the ones overseas!
For example, you could use your package like this:
Example Workshop Full Price Early Enrollment Discounted Price You Pay The Package Discounted Price
Sideways Market Systems $ 3,495 $ 2,795 $ 1,250
Forex Trading Systems $ 3,995 $ 3,295 $ 1,250
Peak Performance 101 $ 2,995 $ 2,295 $ 1,250
Peak Performance 202 $ 3,995 $ 3,295 $ 1,250
Day Trading Systems $ 3,995 $ 3,295 $ 1,250
Infinite Wealth $ 2,995 $ 2,295 $ 1,250
Blueprint for Trading Success $ 2,995 $ 2,295 $ 1,250
Adaptive Swing Systems $ 3,995 $ 3,295 $ 1,250
Peak Performance 203 $ 3,995 $ 3,295 $ 1,250
Develop a Winning Trading System $ 2,995 $ 2,295 $ 1,250
$35,450 $28,450 $12,500
Think about this for a moment: Have you been considering attending one or two workshops in the coming year? Now, you could attend 10 paradigm-shifting workshops and really put your trading education on fast-forward for virtually half the tuition!

While we want each and every one of you to be able to enroll in this option, it may not be for everyone. This unprecendented offer does not allow for time extensions - this package is valid through 2018 ONLY! This offer is a no-refunds proposition...students should be ready to go "all in" mentally to take their trading to the next level!

PACKAGE 2 — 5 Workshops in 18 months
(January 2018 - June 2019)

Don't think you can swing 10 workshops in a year? How about an offer that's a little less intense? If 5 workshops in 18 months seems more your speed, we've got you covered!

At just $1,499 per workshop, traders get a great deal on trading education, and have plenty of time to attend a variety of workshops through June 2018! Yes, this discount even applies to workshops that are normally priced at $3,995! Again, this includes all workshops we offer, even the ones held overseas! Plus, if you purchase this package and then change your mind there are some refund options, detailed below.

Here's an example of how you can use your package:
Example Workshop Full Price Early Enrollment Discounted Price You Pay The Package Discounted Price
Sideways Market Systems $ 3,495 $ 2,795 $ 1,499
Forex Trading Systems $ 3,995 $ 3,295 $ 1,499
Peak Performance 101 $ 2,995 $ 2,295 $ 1,499
Peak Performance 202 $ 3,995 $ 3,295 $ 1,499
Day Trading Systems $ 3,995 $ 3,295 $ 1,499
$18,475 $14,975 $7,495
To learn more about these package deals and how to purchase CLICK HERE!

Trading Tip

U.S. Markets — A Key Indicator Stumbles
by D. R. Barton, Jr.
Van Tharp
Two months ago, I wrote the following closing line in this space:

“We’re still favoring the bullish bias while keeping our eyes open for signs that would tell us to change posture.”

In fact, during that September 13, 2017 article here in the Tharp’s Thoughts newsletter, I gave you two items that I keep a close eye on as my “canaries in a coal mine” — my early warning system that market momentum could be changing. Those two early warning signs are the market breadth and the global market strength.

Good earnings, the anticipation of tax reform and strong global markets are keeping U.S. stock prices elevated. And good earnings haven’t just been coming from middle-of-the-pack companies. By-and-large, big tech has been giving sterling earnings reports this quarter. A highlight was came two weeks ago when in the same day, Amazon, Alphabet (Google), Microsoft, and Intel all brought home stellar earnings reports and forward guidance.

Meanwhile, the broader market indexes continue to grind ever higher but one of those key underlying measurements I mentioned is showing the first signs of weakness. I’m not jumping off the bull market bandwagon at all, but the NYSE cumulative advance-decline line has not kept up with the market recently.

To calculate the “advance-decline” number each day, the stock exchange reports the number of stocks that closed higher today than yesterday minus the number of stocks that closed lower. Some people also refer to this number as the market “breadth”. If you add all of those individual breadth or advance-decline numbers together, you get a cumulative number.

When the market is making new highs, the risk of a massive selloff remains low if the cumulative advance-decline line is also making new highs. As you can in the chart below, that’s no longer the case:
DR Tip - Chart 1
From here, it’s way too soon to say the rally is in trouble. The cumulative A-D line could catch up in just a week but this is the first time this divergence has happened in quite a while. While not reading too much into the situation just yet, I will be keeping a close eye on how this chart develops…

Also, it has been more than a year since we have had even a 3% pullback in the market. That is a huge amount of time to go without a pullback of even that modest level. We should note that a 3-5% pullback anytime soon would change nothing about the mid-term to long-term outlook.

Here’s the key question: What does the market do after the next pullback? Can it recover and test its all-time highs again? If not and we get lower highs in the S&P 500, then we need to be more cautious. If the market does recover from the next pullback and set new highs, then the grinding bull will continue to get its way.

Your thoughts and comments are always welcome — please send them to drbarton “at” vantharp.com

Great Trading,
D. R.

Workshop Schedule

January 2018 - US
Van shares years of knowledge about wealth concepts, wealth creation modeling, being wealthy inside, and the infinite wealth processes. Attend this workshop and completely reshape your attitudes toward money, work, paychecks, income, wealth, scarcity, and abundance. Your paradigm shifts in just three days will amaze you and release you from your current beliefs about wealth that have been running in your unconscious and holding you back.
Immense success is possible for most traders and investors. But the secret to that success has little to do with some magical trading system. Instead, it has everything to do with you. You are the secret ingredient to your success. And when you transform yourself, you transform everything. Peak Performance 202 is a major leap forward for those of you who are willing to step out of your comfort zone.
February 2018 - US
Peak Performance 101 is Dr. Tharp's core psychological workshop, and his most transformative course for over 25 years. If you want to know how great traders think, behave and act so you can achieve consistent and profitable results, without stress, then this workshop is for you.
In just three days you’ll see how all of Van Tharp ’s strategic trading concepts fit into one seamless design for more predictable trading results. Your trading will never be the same.
This course illustrates the relationships among the steps so that the process is logical and reasonable. Moreover, you will learn how to take each step experientially, so you really get it. Dr. Tharp is an expert in delivering elicitation questions to bring forth each person’s most important issues.
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