Prediction? No. Reaction? Yes.

It would have been very hard to have been profitable in the last two weeks trading the S&P. Hard down move, then wham bam — hard up move. Whipsaw! That said, given all of the “technical predictions” over the last few months, predictions supposedly telling where the equity markets would be headed … it was technical strategies predicated on “reacting to price moves” that was/is the only life preserver worth a damn.

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3 thoughts on “Prediction? No. Reaction? Yes.

  1. I agree. The down move of last week was predicated by computers trying to snatch shares from the longs. I stated in my blog that this recent down move did not feel like a correction. Otherwise, I would have seen a lot of inverse etfs flashing signals to go long. That did not happen. I was long during this recent period unlike the correction that started during April when I was going short the market because during that week, 6 short etfs appeared in my screens that are based on technical indicators.

  2. Although my commentaries during the past have been dead wrong, my charts have been spot on. I published seven charts this morning all illustrating the advantages of trend following, even in this market. There is something eloquent about price, the ultimate truth of trend. I use an objective, mechanical ATR computation to identify trends and if only I learned to stop thinking and just observe, I’d stay out of trouble. As my charts point out time and time again, the less said the better, including now.

    http://allallan.blogspot.com/2010/07/everything-else-is-just-noise.html

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