I wish I knew...... my Crystal Ball is still not working. But the Proprietary Momentum Changes indicators say the direction has changed. And because this is a binary system, the next signal will be a Buy signal. I just don't know where it will be.
I have made some changes to the blog, hopefully making more useful information available in addition to the singular direction signal. These last few weeks have been very noisy... and full of potential whipsaws. Personally, I don't like whipsaws. They tend to damage my confidence. But other traders are not so tender. So I thought it would be helpful to offer the signals I get in in the individual indexes or the tracking ETF's. You will note that in several cases, I prefer to use the ETF's SPY and IWM and QQQ and XLF instead of the actual index, the reason is that there are more data points available than for the actual indexes.
There are many strategies used to gain an advantage in the markets, and I have used a number of them. I am familiar with and follow many more than I have actually used. I am convinced that there is no one single strategy that is 100%, but there are many that are generally more accurate than they are inaccurate. Many traders attempt to anticipate a buy point or a sell point, based on charts, and I have studied many strategies that claim success most of the time, and I in fact use them myself. The one strategy that I have studied and used and no longer use is a fundamental approach to investing. And let me assure you I am well schooled in fundamental analysis.
However, after many years of actual experience in the markets, I have come to understand that individual personality has as much, if not more, effect on actual results than the strategy used. I have known many participants in the markets who made a great deal of money in the markets. However, I have known very few who have been capable of keeping it. The very successful who have been able to keep most of what they have made are those who are not always the best buyers, rather they are consistently and persistently the most disciplined sellers, avoiding any serious loss, unwilling to let a trade move against them without taking action to limit losses.
There may well come again an investment climate where the Bull can run for a number of years with out serious corrections, but most of us don't have the time to wait for it. If we are committed to increasing wealth, and or income, or are content just to maintain our principle, we must be prepared to follow that direction the market taking, being prepared constantly to move to limit losses, and to be emotionally prepared to change direction.
And that is the hard part.
Best To Your Trading.
Bill
The biggest money in the market is not in superior trading or investing.
ReplyDeleteThe biggest money in the market is in managing OPM. You only need a so-so performance, plus an excellent marketing skills. Most of the money managers are below average. They underperform the index. But they make tens of millions years in years out, by fooling their clients. The number of suckers with money is astronomical.
The biggest money is not in trading or investing in the market. THe biggest money is in making money off them suckers with money.
SC
ReplyDeleteI have spent many years in the market, on the sell side with F I DuPont, Paine Webber and Smith Barney. It is true that good brokers make a good, even excellent income. But, I have never met a Broker who actually got rich trading the market. Brokers are generally poorer traders than the clients, because they are so influenced by the income structures and the research departments and by the annual performance review.
But I agree it is easy to attack their performance.. it sucks. I am not sure I could say the same thing about the hedge fund concepts... there have been great successes and probably as many great failures.
Bill
Regarding the market, unless it turns with superior momentum here, the top is in.
ReplyDeleteAll the divergences are in place.
I am thinking of the mutual fund crowd, Bill. That is like a gigantic troll market for suckers. Talk about hope springs eternal. Mutual fund investors are biggest bunch of suckers. Well, may be the 401k account holders are the biggest bunch of suckers these days.
ReplyDeleteThey happily pay money managers who underperform the index.
SC
ReplyDeleteI agree with all that you say.
I think the top is in also.. but you can never be certain. If the Fed decides to engage QE3, then the top may turn out to be higher. But I don't think they will be able to engage QE3....congress won't let them.
Take a look at the hourly SPY.. .now that is a head and shoulders.
Bill
I don't if I am prepared to say "THE TOP" is in, but the various sentiment indicators I follow (ratios of bullish v. bearish asset classes) did not confirm the last up move and continue to deteriorate. As for momentum, I got sell signals at the close on Friday, so I am out of my stock position (I can't short yet because the SPY is above its intermediate moving averages). I did go long bonds and short copper today. Let's see what happens - good luck!
ReplyDeleteRob
ReplyDeleteI don't follow asset classes as you suggest, but I do follow high/low, high/low ratios, up/down volume, etc. But I do not consider them to be momentum indicators.. rather I consider them as confidence indicators.... negative divergence/positive divergence...etc.
If you notice, I shorted the market after the rally this morning failed, and at the close, all trades are positive.
Good luck to you also.
Bill