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Strategies & Market Trends : Longer-Term Market Trends -- Ignore unavailable to you. Want to Upgrade?

To: chris714 who wrote (193)	4/8/2008 7:09:57 AM
From: AllansAlias	Read Replies (1) \| Respond to of 3209

Yeah, these darn corrections often frustrate traders and they have frustrated me before. I lost a fair chunk of my trading account after the initial decline of 2000, as I was too eager to see the correction as being complete -- too eager to buy puts. The market did not roll over again until the late summer of 2000. I was right that we had begun an important correction, but my timing was bad. It was a very important, and costly, lesson for me. As regards gold, I trade in and out against HUI. I think it is probably correcting against the entire rise out of the 2000 low. If that is the case, the current decline could last a few years and see gold get cut in half. There is a decent possibility that the current down move in gold is only a 4th wave -- that is not correcting the entire rise, or, in other words, that the entire rise out of 2000 is not a complete impulse (i.e., 5 waves). In that case, this current correction could be more flat, but would still last many months, quite easily a year. I remain the same as the week before I went on my Phoenix trip -- 20% equities and 80% fixed income. I have traded nothing then since March 11. I see no compelling reason to pile into equities, although there are a number of charts that look like they need a short-term jump, and I certainly see no reason to get back into gold. At this point, I am guessing I will dump that equities portion here shortly. Many people think that trading is about foretelling the future. They can look back and see a bad call. That's easy. Everyone makes calls that turn out to be wrong. Being wrong happens a lot, but it's being stubborn that's expensive. If the market defies what I see -- my map, then I will change my mind. Price action is smarter than me. Stops are smarter than me. What would be nice, is if everyone just agreed that we are all fallible, but we are not stubborn; if we could all agree that there is no shame in making a call given current indications, without fear that it is frozen in time. If we had such a supportive environment, I believe people would be more willing to share what they see. In that spirit, my feeling today is that the market is going to continue to jello around for many weeks yet, then go down again to test the lows. In the shorter-term (next two weeks), I expect another really good pop to the upside -- to the SPX 1410 level. I am watching a bunch of charts that influence this belief. That $TRAN chart we've posted is key. The oil charts still look quite good s-t. That SMH breakout in progress must be followed really closely. Then I see another series of charts that are pushed up against shelves, like MMM and MSFT -- up against shelves that have been tested 3 or more times. I expect them to bust up through those shelves before they turn down. Cheers