As the stock market rally continues, investors are starting to wonder just how long it can last. Mike Swanson, a financial analyst and trader, suggests that the time to buy was in the first quarter of this year, when the current stock market rally was still in its early stages. Swanson did several videos back in January saying that he believed the bear market of 2020 was over, citing the Breadth thrust indicator. However, Swanson also said that he believed that this would not be a massive bull market that would last for years on end. Swanson now believes we are in a secular bear market with a short-term cyclical bull market within that long-term secular cycle.
While some analysts are claiming that we are in a new AI revolution that will eliminate inflation and create a new economic boom for everyone, Swanson warns that inflation is a secular problem that appeared two years ago and has not gone away. He also cautions that stock market valuations are currently at a nosebleed level. While the market still has upside potential, it is limited, and Swanson recommends investing prudently and managing risk.
Swanson has been doing very little trading in the past few weeks and expects to continue doing very little for the rest of this year. While he believes the market had potential at the beginning of the year, he now believes that upside potential is limited. People want to hear about bullish talk and the potential for unlimited gains, but Swanson advocates a more cautious approach.
If one wants to invest in AI, Swanson suggests the only bet people are making is NVDA. Swanson tried playing with the CHATGPT but found that some of the answers were nonsensical and the whole thing was a waste of time. He prefers to talk to real people with knowledge and wisdom.
Swanson believes that AI is not the big deal that people are making it out to be. It is a meme to get people to believe in tech innovation and a sleight of hand. AI is not going to destroy the world, and Swanson cautions against warnings from tech gurus like Elon Musk and his Silicon Valley buddies. According to Swanson, these warnings are a game to distract people from the bad things the tech industry is already doing.
Swanson has been posting less frequently on social media, preferring to focus on his other projects. He encourages readers to subscribe to his free email newsletter for stock trading updates.
