At Emerald Asset Management we believe that most investors would avoid many investing pitfalls if they would follow three primary rules. To paraphrase Ned Davis Research:
Don’t fight the trend,
Don’t fight the Fed, and
Beware the Crowd at Extremes
While the Trend and the Fed appear to be questionable, our favorite sentiment indicator shows that the crowd might be getting overly pessimistic which could set the markets up for the next leg up of the secular bull market that started in 2009. Our opinion would change if the S&P takes out the October 2014 lows at 1820.66 – highly unlikely in the near term, in our opinion.