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Avoiding a fight in the markets is a little like trying to win a tug of war
hands off. Although the markets are getting more and more volatile, there is
little long term evidence that the market is in any sort of down trend.
On the attached Monthly chart of the S&P futures the white line is the mid
point of the range and we don't even have evidence of weakness. Until the
white line goes below the green line no weakness, and until the white line
goes below the 1X1 angle the up trend is in force. I still see this market
making the target I mentioned previously. To get it simply multiply the 1929
high by 40.
Prosper
> There is this old rule: when witnessing a domestic fight, don't meddle
> or you will end up hit by both...
>
> At the moment we are witnessing such a fight:
> - longs vs shorts,
> - believers in old against believers in new economy,
> - new business models vs valuation criteria
> - believers in sweeping changes through internet, vs belief there ain't
> anything new
> - herds fleeing from group of stocks to other
> - etc
>
> A few weeks ago, saying I am moving out of stocks, I got laughed at.
> Well I exited too early admittedly, but now I don't hear anything
> anymore about why I should remain long. instead, many are pondering how
> far down we could go, targets, short selling opportunities etc. I know I
> am certainly too early again, but I know it never comes as everyone
> expects. My view is we'll have neither the clean crash nor the clean run
> back up, we'll have a nice saloon door. Too many have made (big) money
> in too short a time. The market being the best device ever invented to
> separate portfolios from their cash, I presume we are entering a period
> where it will remain wildly unpredictable without regular and long
> enough trends, so that everyone will get hit no matter what they do.
>
> In my view, this is the time where you typically a/ pull out completely
> or b/ follow your system religiously, hoping the drawdown won't be too
> bad. In other words, this years profitability will be played out now,
> measured by the amount of discipline one can retain in the face of
> extreme and shifting emotions.
>
> Gwenn
>
>
>
>
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