I wanted to post some observations based on last year's and this year's activity.
When judging whether or not the market has hit bottom, whether it will continue to go down, whether it has based and whether the indicators will reverse does take a little more "art" than science.
I have said many times that I don't look at the Dow chart but that isn't entirely true. I do look at the chart combining it with the momentums and indicator charts to give me a sense of the market direction, especially at the top or at the bottom.
I wish I could give you an exact formula but there isn't any. It is more a "feel" than an equation and I think everyone is capable of achieving this "feel".
Last year and again this year I met with opposition when I tried to suggest the market was basing. This was on the phone, on the thread and in discussions. People were "assuming" the market could drop to 9700 or below based on support levels and I think what the media suggested. It is true the Dow had support at 9700 and one could correctly state that it was possible for the market to drop that low. I didn't really "believe" it would because of what I saw with the combination of the Dow and the indicators. But, I must admit something, in listening to several people doubt my impression I started to doubt myself. Tommy told me today when I mentioned this that the indicators are there so I don't doubt.
Since I make my judgements based on a feel which is part of the art form that leaves me open for doubt. But looking back was it a guess on my part? No. It was right there in the charts and the indicators. All I did was put the picture together and I saw that the Dow wasn't going to drop to 9700, that the indicators were firming up and that the change was coming fast.
This is why on some of my posts I kept mentioning pullbacks on volatility. There is a difference of a market in collapse and a market pulling back. The market pulled back this year. We also had the interest rates to consider and the DJBB combined with the TYX to guide us. I looked at those too in judging the market.
Volatility is high these days. I don't think we are used to it yet. We see the large swings and if they are to the downside we panic. We think the ship is sinking. Playing the volatility is an art as well and we have one among us who is excellent at playing the volatility (I think we all know who he is...).
Well, the indicators came along quickly. I posted as much as I could for the past three weeks or so suggesting a bottom had been made. I noticed the thread was very quiet which I think is a good sign. Y'all were waiting for the right time and not panicking over the volatility. You all have become excellent investors.
I'm sorry I let others talk me into doubt. I should know better. It drove me crazy because I really did know I was right but afraid to steer people wrong. Same thing last year, dammit. I post this because if any of you ever felt doubt I wanted to let you know it happens to us all.
I told Jorj one time that I felt doubt last year and just closed my eyes and said "Buy!" Well, this year I used a softer tone but I hope it came through in my posts. I was saying the market has based, don't panic, get your list ready and wait for the signal.
The indicators don't lie. They never have. They've been right all along. It does take an art to feel the change by combining many charts. Just one won't tell the whole picture.
A wise man told me something "When it get's to the point where it hurts so bad you can't stand it anymore, it's time to buy". When people post the end is near with the NYSE BP already down into the 30% range, stick to your ground and watch the charts. If they post that the end is near and the NYSE BP is at 70%, build a bunker.
It all makes sense, you just have to have confidence in your abilities to read the charts.
The DJBB has reversed up. The TYX gave a sell signal a while back. If this holds true it means interest rates will not continue to rise and Jan can buy a house without paying the bank tons 'o interest.
Best of luck to everyone :-) |
