and traders are bearish. The reasons vary and include worries about earnings or the economy but many feel that the market is headed for a fall.
Traders are fascinated by indicators. But just because something is interesting, logical or mystical does not mean it works in the market. Testing is needed to be sure the indicator adds value, and we will define value as improving profits. If an indicator beats a simple trend following strategy, it adds value.
Traders and analysts have been developing market indicators for decades. Many of these indicators are simply measuring the same idea in only a slightly different way since most indicators are based on the same limited amount of market information.
Many Wall Street pundits have been talking about the Santa Claus rally and the January Effect. In both cases, stocks are expected to go higher based upon a seasonal pattern.
The stock market, big winners unfold over years and could be a valuable core holding in a trading account.
In the long-term, investors in stocks and bonds have different goals but the performance of the two investments has been about the same over the past thirty years.
One of the first lessons that new traders are taught is that one of the keys to success is to cut losses and let winners run. This almost always leads traders to believe stop loss orders should be used to cut losses and are a valuable part of any trading strategy. Individual traders also seem to place stops under the market and forget about them, knowing their losses are limited.