When the markets slow down, most average investors head to the sidelines.
But for seasoned investors, knowing the difference between a pause and a top could be the decisive factor when it comes to profitability.
Even Fox Business got into the nuance game this week, “Global Markets Stall at Multi-Year Highs”.
“Markets don’t go up in a straight line,” said Garry Evans, global head of equity strategy at HSBC. “I think that people are realizing there could still be problems out there.”
A market top is typical when the indexes are at their highs, even when those highs have come from lower volume. It is felt when sell pressure has begun to weigh on the market.
The stall at a market top reflects a level of indecision and can lead to corrective action. The big concern with a top is that no one knows how deep or long the corrective process will be. This ‘process’ can force you out of a position too early or sometimes even worse, too late.
— The Stock Enthusiast