{"id":12711,"date":"2019-01-21T07:30:16","date_gmt":"2019-01-21T12:30:16","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=12711"},"modified":"2019-01-21T07:30:16","modified_gmt":"2019-01-21T12:30:16","slug":"its-time-for-investors-to-take-a-nap","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/its-time-for-investors-to-take-a-nap\/","title":{"rendered":"It\u2019s Time for Investors to Take a Nap"},"content":{"rendered":"

We’ve seen this movie before.<\/p>\n

In the first three weeks of 2018, the S&P 500 gained 150 points. That was nearly a 6% gain in just 15 trading days.<\/p>\n

I told folks at the time, “Most investors would probably do well to cash out right here, take their 6% profits and take a nap for the rest of the year.” <\/p>\n

That same advice might work out just as well today.<\/p>\n

We’re just three weeks into 2019 and the S&P 500 is already up 170 points. That’s a 7% gain from where we started the year. Given the pain and suffering so many investors endured in 2018, I suspect a 7% return for all of 2019 would be a welcome result. Getting that result in just three weeks is outstanding.<\/p>\n

Investors can cash out, take that gain right here, and then take a nap for the rest of the year. <\/p>\n

But, that’s not what most of them are doing. Rather than trimming their long positions as the market ramps higher, investors have been increasing their bullish bets. That’s probably a mistake.<\/p>\n

Take a look at this chart of the CBOE Put\/Call Ratio<\/a> (CPC)…<\/p>\n

\"\"<\/p>\n

The CPC is a short-term, contrary indicator. It compares the action in call options<\/a> to the action in put options<\/a>. A reading above 1.20 shows extreme bearishness among speculators and can indicate a good time to buy stocks for the short term. A reading below 0.80 shows extreme bullishness and could indicate a good time to sell.<\/p>\n

The CPC dipped below 0.80 in early December – right before the S&P 500 dropped 450 points in three weeks. The ratio dipped below 0.80 again in late December – after a blistering week-long rally that flipped investor sentiment from extremely bearish to extremely bullish.<\/p>\n

The S&P 500 dropped a quick 50 points in just two days after that.<\/p>\n

Now, the CPC is back down at 0.80 again. At a minimum, the market is due for a pause right here. And the “worst case” could be a whole lot more damaging.<\/p>\n

Investors who are considering piling on even more bullish exposure with the market in this condition might do well to hold off for a bit, take a nap, and see how things look in another week or two.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

P.S. <\/strong> Right now, I foresee a significant turning point in the markets. One that could either devastate your portfolio… or, if you make the right moves, double your money over and over again.<\/p>\n

The difference is, of course, whether you’re an investor… or a trader<\/em>.<\/p>\n

We’re quickly entering the best time to be a trader since 2008 – which was one of the most profitable years for my subscribers ever.<\/p>\n

I’m hosting a special presentation this Saturday, January 26, that’ll cover everything you need to know about this turning point… And how you can earn a fortune while most investors lose their shirts. Sign up right here<\/a>.<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

Are you an investor or trader? Which do you believe is a better option for 2019?<\/p>\n

And as always, send any other trading questions, suggestions, or stories to feedback@jeffclarktrader.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

We’ve seen this movie before… <\/p>\n","protected":false},"author":37,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-12711","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/12711","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/37"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=12711"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/12711\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=12711"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=12711"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=12711"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=12711"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=12711"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=12711"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=12711"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}