The Important Question Traders Must Ask

In November, as the lofty sentiment data continued to roll in, as the stock market trekked higher I wrote a post titled, The Biggest Question Traders Face. In it, I describe how we are climbing a mountain of stock prices but we don’t know how tall the mountain is or when we’ll reach the peak. I dive into this topic once again in my piece for TraderPlanet this week, looking at a recent WSJ article that discusses how retail traders are coming back to the market.

Here’s a piece:

This same concept applies to trading. We see citations of near-record high margin debt and comparisons to 2000 and 2007. But who are we to say that the current climb we are on is the same “height” as those we made going into 2000 and ’07?  In 1997 margin debt more than doubled from 1994 levels and was even three times higher by 1999. We weren’t climbing Mt. Cho Oyu, we were climbing Everest and an Everest-like decline eventually followed!

Read the rest: The Important Question Traders Must Ask (TraderPlanet)

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+, Twitter, and StockTwits.

About Andrew Thrasher, CMT

Andrew Thrasher, CMT is a Portfolio Manager for an asset management firm in Central Indiana. He specializes and writes about technical analysis as well as macro economic developments.