Stocks on March 15, 2018: outlook


*These are my discretionary thoughts on the market. My Medium-Long Term model determines my trades.
Go to the homepage for my latest market outlook. I update this webpage throughout the day.

Thoughts

  1. Yield curve is flattening. Suggests that the bull market will end in late-2019 or early-2020.
  2. There aren’t many years left in this bull market.

3 am: Yield curve is flattening. Suggests that the bull market will end in late-2019 or early-2020.
The yield curve is flattening once again after steepening a little in early-2018. At this rate the yield curve will be inverted by the second half of 2018. The yield curve tends to invert before a bear market and recession begins (historically). This suggests that the equities bull market will top in late-2019 or early-2020.

3 am: There aren’t many years left in this bull market.
Some investors are too bullish on stocks. They think that this bull market still has 4 or more years left because “the U.S. economy can grow for years to come”. I disagree. I think there’s only 1-2 years left.
The current bull market is setting up to be a repeat of the bull market that ended in March 2000. 76% of U.S. IPO’s are for unprofitable companies. This compares to 1999, a year before the bull market ended in March 2000.

This is typical for the last 1-2 years of a bull market.
Read Stock market on March 14: outlook

Outlook

Here’s what I think will happen based on my discretionary outlook.

  1. The S&P has made a small 6%+ “small correction”. This will not turn into a “significant correction”.
  2. 2018 will trend higher but also be a choppy year. There will be another correction later this year.
  3. The S&P 500 has approximately 1-2 years left in this bull market.

I do not use my discretionary outlook to place entry/exit trades. I am 100% long SSO (2x S&P 500 ETF) because my Medium-Long Term model does not foresee a significant correction at this point in time. I ignore small corrections. I only sidestep significant corrections and bear markets.
I have been long the S&P 500 since September 7, 2017 when it was at 2465.
*I also have a small Day Trading portfolio. Click here to view my day trades.

Leave a Comment