Jan, you can never pick the top, nor the bottom. Once in awhile, and with a little luck, you can get REAL close.
I am basing my bearish thoughts on the quantity of signals that I am getting, across a variety of sectors. Last time that the number of signals was equal to what I am getting now was the turn on Oct 8th, altho at that time they were bullish.
Yes, the macd is sometimes a lagging indicator, and sometimes it takes awhile for the price to turn. To aid in picking entry points, I look to a shorter term stochastic oscillator. Still, it is not perfect, but it works pretty darn good.
With the idea of a Santa Claus rally implanted in all, who knows what will happen this week and next? If this rally happens 77% of the time, who can argue that chances are that it won't happen again? This might be yet another time that the market stays overbought, and the macd is before its time. But that's where stoplosses become valuable - when you believe in your system, but outside factors skew the price action. It might be prudent in these instances to only take 1/2 your position.
There is one wierd thing, the dow is not showing my bearish pattern. But its pattern on Oct 8th wasn't perfect either.
My opinion only, as always.
Debra |
