I would counsel people not to be a buyer of equities up here. If you’re an owner of equities, I would counsel strongly to bring stops up behind your positions, buy puts to protect those positions, sell futures to protect those positions, or write covered calls to protect those positions. I would tell you not to be a buyer of new equities. And anything that you had in the past, do something to protect those profits.
Trump EffectWill there be tax cuts as consequential as Mr. Trump has indicated? There'll be tax cuts, but will they be as consequential? Probably not. Will there be infrastructure spending? Not a question. But will there be as much infrastructure spending as the markets seem to anticipate? Probably not.
Those things make it difficult to remain bullish of stocks at these levels. The market can go higher, but it is at levels I find to be nosebleed territory. People should be very careful up here. New purchases are to be avoided; old purchases should be hedged up in some fashion using derivatives or options; and bring stop orders up close behind the market.