The market this week
There is the possibility that equities could stage a minor rebound this week, one that endures for ~2 ½ days. This comment from Tim Villano seconds this notion, and includes only one of his several reasons...
"Friday represented a timing turn which must be assumed to be a market-low. The next timing date is Friday, August 12, which would seem to suggest that the tape can rebound or recover this week against last week's bearish or resistance candles."
So the requirement is to determine the strength of the rebound, if it materializes. Seek tension on the tape, sentiment, and the action of the leaders, etc. But whatever you do, don't do what this fellow does...
"XOM and GOOG are also at technically interesting spots, so I'll be watching them this week too"
An investor makes his or her money by doing, not watching -- especially if, as the person suggests, specific stocks are "at technically interesting spots". (For example, consider the chart setup for Meadow Valley/MVCO, and how it might behave today... and coming weeks.)
It is better to get long (or short) the positions in which you have interest when your action point is hit, then to sit on your wallet and await ratification of your analysis. There are only two options at this moment of stalemate:
1) Your analysis is rarely if ever correct more than 50% of the time -- in which case, you should instead purchase an index fund or otherwise remove yourself from the investing equation;
2) You rarely if ever do the right thing when the moment occurs for you to do precisely that -- which means you do not trust yourself to take appropriate action because previously you have not.
In both examples, you require the market to ratify your analysis before taking action. I contend this is backwards. It is better to be long (or short) a position and manage it, then not take action based upon your analysis, wait for it to be proved correct, and then chase market action.
Of course, the second method is human, and therefore easier to pursue.
"Friday represented a timing turn which must be assumed to be a market-low. The next timing date is Friday, August 12, which would seem to suggest that the tape can rebound or recover this week against last week's bearish or resistance candles."
So the requirement is to determine the strength of the rebound, if it materializes. Seek tension on the tape, sentiment, and the action of the leaders, etc. But whatever you do, don't do what this fellow does...
"XOM and GOOG are also at technically interesting spots, so I'll be watching them this week too"
An investor makes his or her money by doing, not watching -- especially if, as the person suggests, specific stocks are "at technically interesting spots". (For example, consider the chart setup for Meadow Valley/MVCO, and how it might behave today... and coming weeks.)
It is better to get long (or short) the positions in which you have interest when your action point is hit, then to sit on your wallet and await ratification of your analysis. There are only two options at this moment of stalemate:
1) Your analysis is rarely if ever correct more than 50% of the time -- in which case, you should instead purchase an index fund or otherwise remove yourself from the investing equation;
2) You rarely if ever do the right thing when the moment occurs for you to do precisely that -- which means you do not trust yourself to take appropriate action because previously you have not.
In both examples, you require the market to ratify your analysis before taking action. I contend this is backwards. It is better to be long (or short) a position and manage it, then not take action based upon your analysis, wait for it to be proved correct, and then chase market action.
Of course, the second method is human, and therefore easier to pursue.
posted by David M Gordon | 5:09 AM
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