As with every time the Dow has reached a record level throughout my career (it closed at 1,134 on my very first day [yeah, I’m that old]), folks are asking me if the market can go higher from here — some are outright telling me it can’t.
Famed trader Alexander Elder says to be very careful arguing with the trend:
Each price reflects the latest consensus of value of market participants. Putting on a trade challenges that consensus. A buyer disagrees with the collective wisdom by saying the market is under priced. A seller disagrees with the wisdom of the entire group, believing the market is overpriced. Both the buyer and the seller expect the consensus to change, but meanwhile they defy the market. That market includes some of the most brilliant minds and some of the deepest pockets on Earth. Arguing with this group is dangerous business, and it has to he done very cautiously.