I understand now what you meant. I was surprised, but apparently my take on what you said was wrong. This is good. I would like to see you have continued success in the markets. You have done well so far.
I agree that many people, even experienced ones, do get this market wrong. As a LT investor, I can see a person wearing the bear hat for a while now. As a ST trader, I do not see a bear market at the present time for least for the time frame I am interested in as a short term trader where my trades are one to two weeks in duration and sometimes as little as a few days. But many have this need for an opinion that they cling to, a strong opinion about the market.
A good trader who has traded on the floor of the exchange for over 10 years has said that he can tell in the first half hour of conversation whether the person who he is talking to will turn out to be a good trader. If the person has strong opinions about the market, they are likely to in the longer term fail as a trader. I differentiate predictions from expectations. Predictions are a form of market bias that enters how the trades are managed by the trader. Expectations are assessments of the probabilities in the market place for prospective trades, and then quickly adjusting to what the market actually does. After all, I am using my expectation more as a gauge of the market rather than a prediction I form my market bias on.
First, I think it is easy to let ones biases get in the way from seeing what the market is actually doing. This is true particularly when the trader has others touting their own opinion that may agree with the trader's bias. Add to this equation market volatility and there are problems. At market junctures, it is particularly difficult to evaluate the market using more customary techniques. As John Murphy has proven by his track record, technicals work very well in a trading market. But at market junctures, it is woefully inadequate to use as a means of prediction. The only person who I have sen perform well during these times is Martin Pring. This is because his system for evaluating the market utilizes more than just technicals. You still can use the technicals as your system, but then you can end up getting whipsawed. And I find that it still does nothing for me in helping me to get a good idea on what will happen next. Weekly charts help here, but I am a short term trader. What happens day to day and week to week matter. So I usually stay out of the market during these times. Tape reading can help a great deal, but I also do not find the time to follow the market that closely when I am working on my "real. But most do not know how to examine the market closely. They think the technicals tell all, all of the time.
I want to note here that the technical analysis of the market is greatly improved by understanding the charting aspect of the analysis well. Most do not want to spend the time in this direction. They would rather have their computer throw up a bunch of indicators without understanding what those indicators are doing for them. Then they proceed to make their market "predictions" by giving each of their indicators a vote and counting the votes. At the times I find them wrong, I look at the same chart and the price action frequently tells me a different story that they apparently did not see. Sometimes it is so obvious the message comes across almost like a neon sign.
Judy's intermediate and long term calls are very good, probably one of the best in her area of expertise. And she does get a sense about the shorter term of the market that at times is better than most. This is because she uses money flow and I think even sentiment as part of her formula. She also looks at the fundamentals on a sector basis and even a company basis when it comes to key companies in a sector. She examines the influence fundamental reports have on the market. The fundamentals do help establish the broader trend aside from the "rubber band" effect between fundamentals and prices of stocks which IMO can become very lengthy at times. What she does in examining the market she has learned very well which is more than I can say for many traders whoa re not willing to put in the effort.
One aspect to her unique approach is to follow people with their individual strategy and monitor their performance over time. This tells her who may be on to something and what method shows promise. Lately she has been doing this with P&F charting. Judy is always thinking and considering possibilities which is one of the qualities that I think separates the longer term winners from the losers in the market. It would do good for people to emulate her example.
Bob Graham |
