Papaya, you seem to be a reasonable fellow. Let me tell you something as probably the most experienced trader on earth. What is happening on the COMEX is useless. It tells you nothing. It's worse than that. It misleads you. What those knee jerkers do is make a market. They haven't got a clue about what is coming. They react only to happenings, and if you are influenced by what they're doing, you'll be induced to shoot yourself in the foot. You already know this and I am confirming that it is even far more strongly true than you suspect. The traders don't have any "big picture".
The market is rising for no reason that is apparent. That's why the 'Bugs don't believe. They have to have some important person come out and tell them that it is ok to buy. That way they won't take too much risk. They are concerned about deflation, or IMF, or the season, or any of the well-known reasons why it can't advance. It is the nature of the market to rise while no one seems to know or express why. Then some news event occurs, the pundits explain, and the public jumps in usually creating a near term top. The public buys the explanation, but you have to be selling it if you're a trader. If you're a holder, you have to have superior knowledge.
The only technical information you need is that the market is sensitive to the upside and insensitive to the down side. Nothing better than this can be measured. It is the only state that has a slightly positive expected return. As long as it persists, you hold. When it changes, the trader sells. Holders move on knowledge and are not so concerned about persistence of instantaneous state. In 20 years I have yet to encounter one person who has the knowledge now to hold, but holding is critical.
You can't trade the value of money successfully because its expectation is zero. Money randomly walks. All continuing traders of money are losers since the game has an a priori negative expected return. That's true for trading industrial stocks too, but the game there will last longer on average because the negative expected return is less. The proof of this is seen in the number of busted traders in precious metals when the metal markets are favorable as they purportedly were in the '70s. For 30 years I have considered metals markets impossible to trade. |
