The US stock market surged by $17 trillion in the first half of the year! Investors are at a historical crossroads: take profits or bet everything?

Notice that as the US stock market enters a rare six-month consecutive uptrend, investors are faced with a dilemma: should they take profits or go all in. Data shows that the S&P 500 index has been above its 50-day moving average for 125 consecutive trading days, the longest period since 2011. In the past 30 years, the benchmark index has only had three longer consecutive uptrends. Although uptrends rarely end due to being too long, the S&P 500 index has seen a 38% increase since early April, adding $17 trillion to its market value, causing valuations to appear high and market positions to heat up. The bulls have historical data supporting them, as November marks the best six-month period for the US stock market. However, the question remains whether the year-end gains in the S&P 500, one of the strongest in decades, have already been priced into the market. Janney Montgomery Scott's technical strategist and deputy research director, Dan Wantrobski, said, "We are entering dangerous territory for another round of selling." He believes that the S&P 500 index could drop by as much as 10% by the end of December. "Any decline from the current position will not be too severe. But if a pullback does not occur soon, it could trigger a sharp correction in the first half of next year, as traders would prefer to deflate the bubble sooner rather than later." For Wantrobski and other technical analysts who monitor daily moving averages and other indicators to gauge market momentum, the S&P 500 index staying above its support line sends a signal of stable and strong momentum. In 2011, during a major debt ceiling battle, the S&P 500 index remained above its 50-day moving average for 130 consecutive trading days. If the current trend of 125 trading days continues to next Wednesday, it will be second only to the 149 trading days in February 2007, making it the second longest consecutive uptrend period of the century. Before this, the index set a record of 257 consecutive trading days from January 1995 to January 1996, when the internet bubble began to form - according to data dating back to 1928, this was the longest consecutive uptrend in history. Of course, the next few days are crucial for the stock market as large tech companies will report quarterly earnings, and the Fed will make rate decisions. With the Fed's post-meeting statement set to be released at 2 p.m. Washington time on Wednesday, investors will closely examine Fed Chairman Powell's speech half an hour later for clues on the Fed's future policy direction. Earnings season is underway, and investors are listening to CEOs' expectations for the final months of the year. This week is the busiest week of the earnings season, with over 40% of the market cap of the S&P 500 companies, including Microsoft, Alphabet, and Meta, reporting after the bell on Wednesday, and Apple and Amazon reporting on Thursday. Investors are becoming increasingly concerned about the valuation of large tech companies, and the stock market's another key technical indicator - the 200-day moving average - is also stretched, nearing historic extreme levels, trading 13% above its long-term support level of 6097 points. Data shows that such a large gap historically signals sell-offs, which occurred in 2011, 2018, and 2021. In July 2024, the benchmark index briefly rose above the moving average by 15%, then a short-term drop occurred in the summer due to yen interest rate differentials shaking the financial market. However, Evercore ISI's technical analysis head Rich Ross believes that the alarm has not sounded yet. He said that in recent years, the S&P 500 index often traded more than 10% above its 200-day moving average. This gap typically leads to a consolidation period, pushing the stock market to new highs. Ross also remains optimistic about seasonal trends. Data shows that over the past 30 years, the S&P 500 index has averaged a gain of about 2.5% in November, the strongest month for the stock market, while the average gain for the other 11 months is 0.6%. "For bullish market participants, the good news is that market sentiment and position layout are still slightly bearish - even as the S&P 500 index hits historical highs - mainly due to ongoing trade war concerns and concerns about a potential credit crisis," Ross said. He sets the year-end target for the S&P 500 index at 7,400 points, which means the index has 7.4% upside potential from Tuesday's close. "Sometimes you need to follow the market trend, sometimes you need to go against it. But right now, you can't fight this uptrend."