News & Views

US presses forward – is it sustainable?

Written on: January 19, 2018 | By Andrew Chorley |

This week US stocks advanced to record highs as corporations signalled that the largest tax overhaul in thirty years should lead to increased earnings in 2018 –

However, we remain cautious over the sustainability of market prospects, especially when further consideration is given to the levels of Investor Credit and Relative Strength Index (RSI) –

Investor Credit, that is investors using leverage to invest on the stock market, is at an all time high.

The monthly RSI reading, which is a momentum indicator primarily used to identify overbought or oversold conditions, of the Dow Jones indicates that the stock market is now more overbought than at any time in the history of the index, which was created in 1896.

It is important that we use such indicators when identifying suitable entry points for investment and remember that

“…the individual investor should act consistently as an investor and not as a speculator”

 Benjamin Graham

On this day

19th January 2018 – The last Volkswagen Beetle made in Germany leaves VW’s plant in Emden. Beetle production in Latin America would continue until 2003.

 

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