One of my favorite sayings is, Prediction is very difficult, especially about the future. That was said by the great physicist, Niels Bohr. Bohr won a Nobel Prize in 1922 for, among other things, his work in the field of Quantum Mechanics.
Another of my favorite quotes that relates specifically to the stock market is from Mark Twain. It goes like this, October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April,, November, May, March, June, December, August and February.
So now, after a really satisfying first quarter in stock market returns, the question arises, "Can it continue?" The answer, of course, is encapsulated in the above quotes. Nobody knows! What we do know is what is happening now. And that is that the trend at this time is up. For the S&P 500, the 50 day moving average is in a strong uptrend and the 200 day moving average is just beginning to turn in an upward direction. The numbers for the NASDAQ are even stronger. But can current trends tells us what will happen? Those of you who follow this blog and read my books know that I'm a believer that the sine wave is the most common mathematical symbol in nature and that certainly, the fluctuations in the stock market are a prime example of a sine wave in action.
My advice, if you have had the opportunity to be in stocks over the past few months, take a cautious attitude now. Maybe even take some profits. If you are now only considering stocks. That is, you are thinking about buying now, buy only sparingly, just a little bit. It would not be typical for the market to continue to advance the way it has in this first quarter, without a little breather. The economy is improving, but it is not strong. And, there are plenty of things that could go wrong in the next quarter or two.
Don't get carried away. Keep Calm and Carry On
Go Forth and Do Good
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