In this period of time a lot of things are happening rapidly so you just have to close your eyes and make sure you are not picking stocks only because they are going up, and take a good look around you.
We can start talking about the earning season, the valuations of the stocks, the government shutdown that ended quick or even the meltdown and the wild swings in the cryptocurrencies.
Valuations of stocks:
All of the major indexes are sitting now in their all times highs. It all began in March of 2009, when the markets hit bottom after the housing bubble bursted. Back then the Federal Reserve was the only chief in town to set the tone, and it decided to cut interest rates and start buying government bonds. Since 2008 till now interest rates remained considerably low, in 2008 they were effectively zero. Low interest rate environment induces the public to put their money in stocks. Nine years later the interest rates are still low and money is still plowing into the stock market. Hence we are seeing these high valuations, although some say that the factor of tax reform isn’t reflected in stock prices, but there are some highly priced stocks in the market and one should look beyond the increasing prices and pick them carefully accroding to their value and not the market trends.
The end of the shutdown
Stocks are leaping forward almost each trading session and it looks like that nothing could stop them from appreciating even more. Yesterday (22.01.18) after the Reps & Dems reached a deal on a new bill for refunding the Government, the indexes closed higher, with stocks like Amazon, Netflix and Goldman sachs advancing more than 2% during the market session, and Netflix rising ~8% in aftermarket after beating estimates.
So! What about the cryptocurrencies? Let us leave that to time. If you read my previous articles you already know what my stand point on that is.