This is the last market update we’ll be writing this decade, and what a bullish decade it’s been.
We’d like to take this opportunity to reflect on three charts covering the past 10 years in the market.
The S&P 500 has risen 2,123.30 points — or 190% — from its 2010 starting value of 1,116.70 (see fig. 1 below).
The Decade’s Big Charts
Source: Monthly Chart of the S&P 500 from 2010 to 2019 — Chart Source: TradingView
The 10-Year Treasury Yield, as represented by the CBOE 10-Year Treasury Yield Index (TNX), has been cut in half — dropping from 3.86% to 1.87%.
Source: Monthly Chart of the CBOE 10-Year Treasury Yield Index (TNX) from 2010 to 2019 — Chart Source: TradingView
The value of the U.S. Dollar Index (DXY) has gained more than 23% as the value of the euro (EUR) and the British pound (GBP) have slid lower.
Source: Monthly Chart of the U.S. Dollar Index (DXY) from 2010 to 2019 — Chart Source: TradingView
These charts tell us the following three things:
- Wall Street is confident in the earnings growth potential of corporate America.
- The Federal Reserve isn’t worried about inflation, and traders aren’t either.
- Currency traders believe the U.S. economy is the engine that is driving economic growth.
So, what will the next decade look like?
What Happens After the Ball Drops?
Will it be another “Roaring Twenties” punctuated by another depression? Will it be a decade of stagnation? Or will it be a calm, steady 10 years?
Honestly, we don’t know yet. Nobody does.
What we do know is that the decade we are saying goodbye to has been a phenomenally bullish one, and there’s an old saying on Wall Street that says, “the trend is your friend.”
So, if the trend has been incredibly bullish for the past decade, why should we expect it to be any different at the start of this new decade?
Has anything changed? Does it really matter that the calendar year says it’s a new decade when we’re looking at trends that have driven asset values for the past decade?
We don’t think so.
There’s nothing magical about the start of a new decade. Sure, it gives us something to talk about — something to reflect on — but it doesn’t magically change what is happening on Wall Street.
The Bottom Line
We don’t need to know what the next decade is going to look like to make good trading decisions today. We just need to have an informed outlook on the next few weeks.
We’re ready to keep riding this bullish wave for as long as we can, so look for more bullish trades as we head into 2020.
John Jagerson & Wade Hansen are just two guys with a passion for helping investors gain confidence — and make bigger profits with options. In just 15 months, John & Wade achieved an amazing feat: 100 straight winners — making money on every single trade. If that sounds like a good strategy, go here to find out how they did it. John & Wade do not own the aforementioned securities.
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