The Spear Report which is a pragmatist newsletter that uses a Mechanical signal system that is i believe based on, or is, the Turtle System.
It has had them invested in the market at 50% to 150% since late July 2006.
They enter next week still at 100% but this paragraph they write i think most excellent. This is NOT a chest-pounding, we are godzilla timers. i will let the Gregory Spears words explain why i say that:) He first given reasons for the bulls and stated "the trend is not done until it done, don't fight the trend" BUT then wrote the following
<<So What's the Case for a Correction?
Wall Street can say that all of the above are the "reasons" for the durability of the advance of the markets thus far, as well as arguments for why it may continue, but if the markets did shift on a dime and reverse with a vengeance tomorrow, the Street would then be "explaining" the reasons with an equally authoritative tone, because that's what Street analysts do - explain what's already happened as if it was obvious to them all along. The truth is that markets advance and then analysts look for reasons why, and markets correct and then analysts look for reasons why. If the "reasons" for advances and corrections were as obvious as the analysts would have us believe, then there would be no surprises and there really couldn't be a market at all, since the entire concept depends on speculating about an uncertain future that really is unpredictable. That said, humans are wired to demand answers and explanations, so we make them up as we go along and pretend that we understand what's happening, until the next surprise takes us completely off guard, and then our arrogance extends to pretending that it wasn't really a surprise - we saw it coming all along, and "here's why."
So, ironically, the best case for a correction may be the high degree of consensus that there doesn't need to be one - a perfect setup for a surprise. One of the "tells" for this scenario is when analysts "reach" for explanations and precedents. As noted above, there has been less volatility in this market than we've seen in years, and the current rally since July is uncommon in both length and steadiness. So does that make analysts worried? Not a bit. Instead, they are reaching back to 1995, one of the least volatile and most bullish years in a century, to say "don't worry, this has happened before and that means it can easily continue for the rest of the year."
Now that makes us worry.
Thank heaven we have a mechanical timing model that doesn't try to predict or explain anything - it just follows the trend, up and down, without prejudice. We should do the same.>> |
