Sunday, January 16, 2011

Here we go again

I see that some traders and market commentators are predicting the top of the market again, and even in one or two cases I've seen pieces stating that a market crash is coming. As you know, trend followers do not predict, they follow, so any attempt to 'pick' the top or bottom of a move goes against the basic methodology.

Market tops and subsequent crashes also frequently follow a period of euphoria (remember the magazine cover theory). I cannot recall seeing any sign of euphoria occurring since early 2009, so it is quite possible that we will continue to climb this 'wall of worry' until we reach that state. As always, we will let the markets tell us when the time is right to look to the short side.

For those of you who fall into this predicting mode, I will let you consider this quote from Market Wizard Ed Seykota, who said "It can be very expensive to try and convince the markets you are right". Think about it.

1 comment:

  1. True and as money is being printed assets such as stocks will inflate so the stealth bull market will roll with the usual corrections. GLA