If you are betting against a stock market crash, you’re wasting both your time and money, says Jani Ziedins of the Cracked Market blog.
“While the cynics obsess over the negatives, the market continues focusing on the positives,” says Ziedins, adding that “If this market was going to breakdown, it would have happened by now.”
“Infection rates remain elevated but scientists are making progress on a vaccine. Unemployment is off the chart but governments continue handing out free money. For every negative, there is an offsetting positive.” he said.
He says the key to making money is to follow the market’s lead and not react to negative headlines that anticipate or try to guess what will cause a correction.
“We make money following the market’s lead, not reacting to headlines. If this market doesn’t want to breakdown, there is no arguing with it. There is no room for “should” in the market. Either it does or it does not. Anyone trading “should” is losing a lot of money right now and we don’t want to join that group.”
New Highs on the Horizon
He says the market is still on track to hit new highs soon. Also, while it won’t be a smooth ride, there’s nothing to indicate a correction is coming.
“We are still on track to challenge all-time highs over the next few weeks… The road won’t be fast or straight, but as long as we keep experiencing more up than down, everything remains on track.”
Tom DeMark, a renowned technical analyst and market timer, agrees with Ziedins and says he expects the S&P 500 to climb as high as 3500 before experiencing any sort of correction.
Talking with Bloomberg News earlier this week, DeMark says the index is likely to continue climbing as it tries to keep pace with the Nasdaq Composite Index, which has set 28 record highs this year. Despite the incredible rally from the March lows, both the S&P 500 Index and the Dow Jones Industrial Average have yet to eclipse their mid-February highs.
S&P 500 To Climb?
Speaking of the S&P 500 trying to keep pace with the Nasdaw, DeMark told Bloomberg New, “The catch-up will be fast. And it’s going to catch people off guard.”
If DeMark is correct, that means the S&P 500 still has about 8% higher to climb.
Part of DeMark’s technical analysis involves a so-called momentum formula that compares closing levels of the S&P with those from four days earlier among other complex indicators to make his determinations.
While he’s not a household name, his opinion on the market is highly sought after. He advises such heavyweights as George Soros, Stevie Cohen and others in the hedge fund world. Josh Brown, the CEO of Ritholtz Wealth Management, says “In a world where everyone wants to be a market timer, you could do much worse than follow DeMark’s calls.”