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Strategies & Market Trends : Raptor's Den II

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To: mish5000 who wrote (1603)	1/9/2004 9:40:34 AM
From: Dan Duchardt	Read Replies (1) of 3432

Witness 80% of the move happened in 20% of the trading time...by the time most people pull the trigger - the smart money is unloading to Joe Blow for huge profits. It's simple market dynamics. I'm not questioning the market dynamics. I've not studied the past data to see how well the 80/20 rule fits he data, but I have no doubt that it is a generally valid description of market behavior to observe that the bulk of the move often happens in relatively short time. I just don't see any link between the 80/20 rule and a prediction of where the market is going from here. In the scenario I layed out in my note, the 80% could be finished and the last two weeks or so just might be "Joe Blow" piling in too late while the "smart money" is unloading on him in front of the next great example of TYPICALLY, it continues to move a touch higher - and then stalls and to your horror reverses - and rapidly too.... What makes you so sure the 80% of the move is not already behind us? How do you know this recent acceleration to the upside isn't the blow off top that will put an end to this move? When I pull up a one-year chart I see us moving close and closer the anniversary of a top in front of a rather nasty retreat into the March lows. I also see the Dow testing a downtrend line originating at the all time high. What makes us immune from retracing last years pattern?

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