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Hi Tony:
I like the phrase "Time will telll." It's one of my favorite phrases.
Another term for it is "hindsight".
There are actually quite a number of things we do know. However, we can
only talk in general terms, say, more 55% probability etc.
For examples:
1. In a bull market:
- most oscillator indicators that are in overbought territories ARE NOT
short signals
- to try to short futures/indices/stocks etc is not very wise, in general
2. In a bear market, the reverse is true:
- most oscillator indicators that are in oversold territories ARE NOT long
signals
- to try to go long is courting disaster, in general (ah ha! I may be
guilty of this,
because I'm a perennial bottomfisher - but then I have my averaging down buy
strategy, which over the years has benefited my trading a lot, so far)
3. In general, whether in a bull or bear market:
- when the oscillator indicators are in the extremes (overbought or
oversold areas),
the investors are alerted to a possible (though not necessary) reversal
in the
future - the wise move is to UNLOAD whatever you are in (for long, get out
of the long position and stay flat; for short, get out of the short
position and
stay flat). unless this temporary reversal is PRECEDED by a DEFINITE and
CLEAR-CUT
indication of a LONG-TERM reversal in trend.
- unless one has almost perfect timing, it will be quite risky, for
example, to
go short on NASDQ futures, for example (day-trading is a different story)
I don't have statistical proof of what I've said, but I get the idea from
reading a number of books on investment. And I do believe what I mention
here is slightly better than flipping a coin.
So, I agree that with an overheated stock market as we're in now, any time,
we're due for a correction, maybe pretty substantial.
What I can't understand is why any impending correction or crash HAS TO BE
similar to the 1929 crash.
Regards,
Wong
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At 08:22 PM 03/09/2000 -0500, Tony Pylypuk wrote:
>Of course you're right to question a sample size of one.
>On the other hand, I am reminded of Harry Truman's paraphrase of an Old
Testament text to the effect >that "The only thing new in the world is the
history you don't know".
>Time will tell.
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