GMI: 0??; GMI-R: 0??; GMI-L: 31%; Why fight the odds?

The GMI and GMI-R are back to zero.  The ?’s are there because two indicators are too close to call, but given the majority of negative indicators, I counted them as negative in the index totals.  Gmi1214 (Click on table to enlarge.) There are a number of additional ominous signs for the bulls.  The GMI-L, my longer term measure of  weekly trends is showing 31% positive, the lowest since it hit 20% in August, 2006, near the bottom of that four month decline.  The point is that in the two declines in 2007 (March and August), the GMI-L never fell below 50%.  Another negative sign is that the pendulum of the market, the Worden T2108 indicator, bottomed out at about 13% in November, climbed to near 55% on December 10, and now is back down to 28%.  Almost always this pendulum recovers to around 80% after a large market decline.  So the rebound that we have just had appears puny and half-hearted. I think the only thing keeping this market from a huge decline is end-of-year rally hopes.  I have seen a number of tops occur in January over my trading career……………

So, I say as I did a few posts ago, it takes a masochist and a gambler to stay long in this type of market.  THE KEY TO SUCCESS IN TRADING IS HOW LITTLE ONE LOSES DURING MARKET WEAKNESS.  Most people profit during market rises. The sine qua non is to conserve capital during declines so as to be able to trade long again during sustained market advances.  It is critical to know when to get out of the market.  Why should I bet when the odds are so against me?


1 thought on “GMI: 0??; GMI-R: 0??; GMI-L: 31%; Why fight the odds?”

  1. my indicators showing some weakness, but not broken down yet. I’m staying long for now as I don’t over-anticipate them — and when I have in the past, I usually regret it. With that being said, they are’t far from reversing and if/when they do, it will be time to exit them and go to $ or short some of the weaker areas more. This is a critical week in the markets.

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