Sell the Inauguration ? The Rare America First Stock Market Pattern

I generally have one foot out the door. That is my personal risk profile in the stock market.

As we head towards the New Year and inauguration of King Trump we have seen a lot of bullish price and market action.

The small cap index of US Stocks has now been up 15 days in a row for a agin of 16.5 percent. This is the second best streak of all time.

I have only sold some Schwab this week myself. I have net added stocks since Trump was elected. I see way more long setups than short setups.

That said I would not be surprised to see the market lower by February/March based on some investor ‘froth’ signals.

My favorite chart of the year was created and shared last week on Stocktwits by TradingLicks:

$SPY has now formed what is known as the rare "America First" pattern. Sky's the limit! $SPX #TrumpTrade

— Mike DiBari (@TradingLicks) Nov. 22 at 11:16 AM

The comments were clever. The chart was just for fun but it had that snarky bullish tone that gets me nervous.

As for more serious data, the Rydex bull bear fund flow is a fave of mine. I do believe the signal is stronger when bear flows are too high, but right now the amount of bullish flow is at very high levels:

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I will continue to enjoy the bull market but would not be surprised if we get pummeled on a ‘sell the inauguration’.


Also published on Medium.