Greg Guenthner

One year can make a big difference.

In 2012, the market quietly jumped higher to start the year. No one cared.

Yet in 2013, it’s almost impossible to escape the coverage — and the worries that have come along with the news that stocks are close to new highs.

Thanks to some impending market milestones, investors can’t shake the feeling that disaster is nearby. The generally accepted market narrative for 2013 is that stocks are overinflated and due for a huge correction.

Most investors — along with the financial media — are so wrapped up in new highs that they have lost the ability to think straight. For some reason, everyone believes that the 2013 rally is some unprecedented event that has to immediately end in a meltdown.

But it’s not. In fact, the action we’re seeing in stocks this year isn’t even beating out the market’s start to 2012.

S&P 500 YTD Return 2012-2013

That’s what happens when you get stuck in the vortex of the big bear market — you tend to lose perspective.

In 2012, the market ended the year higher with little fanfare (with a couple of twists and turns, of course). Today, investors are losing their lunch over a 6% move…

But if you commit to following price action — instead of emotional news stories — you can get a leg up on this market. No, stocks won’t go straight up forever. But during the quick January push higher and the consolidation we’ve seen so far this month, price action has been orderly, healthy, and downright bullish.

You don’t need to sell here and lock yourself in the basement. There’s plenty of upside potential left. Let price guide you — not hysteria.

Greg Guenthner
for The Daily Reckoning

Greg Guenthner

Greg Guenthner, CMT, is the managing editor of The Rude Awakening. Greg is a member of the Market Technicians Association and holds the Chartered Market Technician designation.

  • waffenss

    stocks are way over priced, all the gains are with zombie dollars(QE12&3), in a completely dead economy. look at what is going on with the U.S. currency in overseas trading, especially with “third world” currencies.

Recent Articles

How to Make the Casinos Pay You for a Change

Greg Guenthner

It's a theme we've shared with you since April. And it's only gotten worse. The gaming industry has come under all sorts of pressure--a situation I first noticed in the charts. The powerful, multi-year uptrends started showing cracks. And it wasn't long before those cracks turned into gaping holes you could drive a friggin' truck through. That's where things stand today.


How Low Will Oil Go – And What Can You Do?

Matt Insley

The oil market has been under siege for six months. From service providers to producers this downturn has been painful. Of course, we’ve known all along that oil prices were a little toppy over the summer. In fact, when asked just how low oil prices could go I usually answered with a simple “lower than you’d expect…”


Cuba’s Berlin Wall Moment

Peter Coyne

Our forecast that Cuba would be open and integrated within 5-10 years is on track after yesterday's big announcement. Ahead of schedule, even. Click here to see how some investors have profited and what the island's likely future is...


The $4 LED Trend You Don’t Want to Miss

Chris Mayer

The opportunity to sell and install LEDs is enormous. We’re talking about over a billion lighting fixtures. And the areas with the largest potential -- like parking lots -- have barely begun to change. Banker to the presidents Chris Mayer says you could triple your money in this new tech trend. Here's what you need to know.


Three Time Bombs in Your 401(k) and How to Disarm Them Now

Dave Gonigam

By the time you do… Kaboom! It’s too late. They’ve already blown up your retirement. There are three time bombs the mutual fund industry has planted within your 401(k). By the time you’re done with this article, you’ll know how to identify them. And, more importantly, how to disarm them. Dave Gonigam has the scoop...


Got Tech Stocks? Sell These Flops Now…

Greg Guenthner

The latest victim of the crude rout is none other than the stalwart tech stocks. These are the go-to trades that have held up all year long. I'm talking about stocks like Google, Yahoo! and Microsoft. Like I said before, these aren't no-name stocks you're seeing drop more than 10% from their highs last month.