I read the other day that some experts predicted the markets were going to be in trouble and start falling if the 10 year bond rose above 2.6%. Listen, I believe there is a technical reason here, a price channel that would be penetrated from the start of about thirty years ago - hence, a long term trend breaking. In addition, I also heard the recent rally was phony, something like the term 'fake news' being tossed around daily. The rally is going to fail, it's only a matter of time; 'get out now while you can', they say.
In addition, I have been hearing some talk about the estimates to the GDP coming down sharply, the Atlanta Fed's model now looking at a slide for quarter 1 2017 of 1.3%, yet the New York Fed has that same period estimate of 3.2%! Who is right here? Maddening! Talk about a range! Further, a hedge fund manager was on CNBC recently saying he was short bonds, long equities and said 'how can anyone be short stocks right now?' As information, the Atlanta Fed's model missed the mark badly in the estimate of Q4 2016.
We often talk about noise and turning the volume down. Most of what we hear should be ignored. There is nothing we can do about bad information, call it 'fake news' if you wish. That may seem like a harsh label, but then again the headline seem to always get the most attention rather than details. We are always reaching for the best and most reliable information so we can make the best decisions and judgments for our money.
After such a big market surge, nobody wants to be left holding the bag when the market corrects or does even worse. But when do we pay attention to someone or something that may be a gamechanger? That's hard to determine of course, but reliability and confidence comes with previous success. We have often relied upon the charts and technicals to guide our path, and while it is not often smooth there is a high probability road map. Of course, past performance is not indicative of future performance, we can assign a reliability factor and go with what we hear if we trust, knowing full well that any notion can fail.