I was out for several hours. Back to Jungle's article.
In a bull market, the ARMS Index will trigger a buy signal if it hits 1.30 or above. A reading of 1.5 is next to unheard of. You would find only a handful of instances over 40 years. Per the description of ARMS Index on StockCharts.com, "numbers much greater than 1.3 can be achieved in a bear market".
Since we are in fact in a bear market, you need to crank up the scale for the ARMS Index to provide accurate readings. The theme of the article "BEAR MARKET INDICATORS DON'T WORK THE WAY THEY DO IN BULL MARKETS" is absolutely true. In a Bear market situation, An ARMS index of 1.3 is not particularly meaningful. Heck, the ARMS 50-DMA is currently sitting at 1.3. So you have to crank the trigger up to 1.5. The ARMS Index of 1.5 has historically been used in a bear market situation to signal the end of the bear market.
The article seems to hint that, since we are in a bear market, all of your stupid indicators are worthless. Beneath the surface this seems to be another salvo by the financial media to goad small investors out of their positions. This time by attacking the more sophisticated individuals who use such indicators to plan their positions. Until now, the media has had an easy time preying on Joe Sixpack Internet investor. Now that the easy prey have been slaughtered, they're going after the weak-kneed individuals who are higher up the food chain. Such articles might shake a few apples out of the tree, but this time the targets are battle hardened mercenaries who can see through the ruse.
My response to "BEAR MARKET INDICATORS DON'T WORK THE WAY THEY DO IN BULL MARKETS" is "Duhhh!!".
Some of you guys nodded your head when you read this, saying "how true, how true, better show it to Warpfactor", but then many of you are waiting for your own indicator, the VIX, to hit 35 before moving in.
Warp |
