2018 market is here......

2017 US stock market ended on a record breaking mode.

Not only it was a record breaking year, but it was probably the-best market in 60 years.

S&P 500 was UP 19.5%......many new all time highs

DOW was UP 25% .......71 record close of new all time highs

Nasdaq was UP 28.2%....many new all time highs.....

NOW....2018 is here......

What to expect in the new year.....

2018 may revert to more normal return by end of this year......

Normal returns since inception of stock market is 8%......

As we are starting 2018, CMF in above 3 major index is negative, which is not a good omen, means, money has been flowing out.....institutions has been cashing out in this rally.

Negative CMF means that institutions are expecting a pullback, and is raising cash for a much better entry point.

BUT.....institutions have been wrong before in their buying / selling strategy.

RSI in S&P 500 is 60.95, based on recent levels, this is below being overbought, thus contradicting CMF.....

2017 TAPE surprised just about everyone with its record breaking run, many expected pullbacks along the way, based on my recollection we got only one pullback in whole year, in May 2017.

As i am looking @ one popular technicians newsletter, it is suggesting all short position for coming week...very surprising, they have to be right sometimes, we will know in next 4 trading days.

Surprisingly, it was probably the worst year for me since 1970, down 29%, no real explanation, except 4 bad trades earlier in the year and never recovered from, missed many opportunities to lock quick major profit in major holdings and gave it all up and then some, AMD, OCLR to name a few.

Anyway, you try to learn from your big mistakes, but we get trapped in other big mistakes......

Wall Street is very difficult to trade, 2017 TAPE was perfect for buy & hold strategy in ETF.......

Experience in trading generally works against you, either you are booking profit too soon, or with bad timing, you are trapped in losing trade......

Hopefully, we all will benefit from one more year of trading experience in 2018.

For 2018, Cryptocurrencies are another " new factor "....i have a feeling, that it may become very big, like dotcom era.....some huge winners and many many failures..... again ETF may be a safer way to get exposure in this 1000% gain arena......

Congratulations to those investors and traders who did well, their strategy was perfect, expect lower returns with the same strategy in 2018, unless luck has found same home again......then sky is the limit!

Good luck in 2018!

BLOG does NOT give buy or sell.

Saleem