| | | I'm a firm believer in "the trend is your friend" when it comes to investing. However, knowing that few things go in a straight line for very long is also just as important. As you know, I watch a small group of stocks in a down trend to look for reversal setups. In the same fashion, I watch up trends to look for shorts as they "roll over" or appear to be long in the tooth and have expectations that they will (eventually) break down. It's more important to see a reversal in place instead of anticipating....
We are fast approaching, or in some areas we have now surpassed, what I would call the "disconnect levels" in investment theories and strategies. Trend following is leading to some seriously poor allocations of capital at this time.
Between currency wars, flight to safety, search/reach for yield and expecting future results to closely follow those of the past, we're seeing (what I believe is) money chasing very short term trends versus wise, calculated long term investment. The general "fear factor" is extremely high at this time, IMO.
I believe this will happen OX. IMO We possible could see a reverse in the US markets today as it sinks in. When these types of events happen. It's long term thinking that wins. Some reporter will most likely be asking Warren Buffett should they be taking their money out now. Which he will most likely respond. Were in long term. IMO a sensationalized event that will just be a small blip.
What's Janet Yellen thinking this morning. :+ )
For the most part, I'm guessing Yellen and the FED crowd are very pleased that the market is doing their "short term work" for them. They can continue to "error" on the side of accommodation.
I am nearly always slightly cautious (or maybe more appropriately "less bullish") when US equity markets have trouble making new highs, like we've seen for a lengthy period of time. Yet I can't help thinking we could be close to a very explosive upside event, given that the market is almost exclusively focusing on outside issues and not what's happening within the USA.
While there are always bullish or bearish thesis floating around, it seems to me that there's just more shouting of positions and vitriol, as opposed to rational discussion and fact based conclusions to support a position. The signal to noise ratio may be near all time highs!!
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