Tags: Detrick | bull | market | April

Schaefer’s Investment’s Detrick: Still Riding the Stock Market Bull

Friday, 05 Apr 2013 11:00 AM

By John Morgan

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Don’t look for Ryan Detrick, senior technical strategist of Schaefer’s Investment Research, in the growing chorus of Wall Street observers who are looking for a stock market correction.

To the contrary, Detrick told Yahoo he is still bullish on stocks, in part because of popular bearish sentiment.

An Investor’s Intelligence poll showed more than 30 percent of investors are expecting a correction — normally a bullish contrarian sign.

Editor's Note:
Economist Warns: 50% Unemployment, 100% Inflation Possible

“People just keep tripping themselves looking for a top, but that’s not how tops form,” he said. “Tops form on euphoria.”

Detrick is also long stocks because of traditional seasonal factors. He noted that April has been the strongest month for equities over the last five- and 10-year periods. Over the last 20- and 30-year periods, April is the second best month for stocks.

“We know ‘sell in May, go away,’” he stated.

But “April is strong, so don’t fight it,” he advised.

Finally, Detrick noted short interest in the Standard & Poor’s 500 has increased nearly 10 percent since the beginning of February. Again, such bearish activity means that if the stock market continues its upward momentum, the shorts will have to cover, he predicted.

“That’s very bullish, in our opinion. We like seeing that and could very well mean that April’s good, and maybe even going into the summer,” he noted.

“Everyone’s talking about a correction. We know two years ago it corrected 20 percent, last year 10 percent. Could we have a correction this summer? Of course,” Detrick stated.

“But hey, everyone’s talking about it, so maybe we don’t have a correction quite as big as we saw the last two years.”

A new poll from Investor’s Business Daily (IBD) showed that while most Americans still have faith in the equity markets, despite the 2008-09 financial crisis, many are more cautious than before.

Among investors who withdrew money from stocks in response to the market meltdown, 66 percent are waiting to put money back in. Apparently, many of those investors are not convinced the current rally is for real, IBD said.

Also, 67 percent said they have become less aggressive investors. Instead of abandoning stocks, however, they have shifted to more conservative, higher-yielding stocks.

Of those surveyed, 58 percent said that in recent years they have begun to invest less in individual stocks and more in mutual funds, which IBD attributed to a desire for professional management and diversification.

A new survey from Fidelity Investments showed that despite big stock market gains thus far in 2013, individual investors are still bullish.

A majority of the 1,100 investors surveyed by Fidelity said they expect the S&P 500 to end the year with gains, and only 12 percent expect the index to end lower, CNNMoney reported

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

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