GMI: 0; GMI-R: 0; 19th day of QQQQ down-trend; Nicolas Darvas on staying out of bear markets

My two GMI indicators remain at zero.   Friday was the 19th day of the current QQQQ down-trend.   There were only 5 new highs and 189 new lows in my universe of 4,000 stocks on Friday.   The Worden T2108 indicator is at 22%.

I have been writing about how I remain largely in cash during market declines.   A lot of people think highly of Nicolas Darvas, who made a fortune in about two years of trading in the 1950’s (see favorite book list to lower right).   In his later book written in 1977, Darvas wrote:

“Of course there are exceptions to the rules.   There have been any number of stocks that have multiplied in price manyfold in a bear market, just as there are plenty of stocks that have hardly moved in a bull market.   But my temperament is such that I prefer to be safe than sorry.   So I keep out of a bear market and leave such exceptional stocks to those who don’t mind risking their money against the market trend.” (You Can Still Make It In The Market, 1977, p. 126).

I too have found my odds of profting are much better if I trade consistent with the market trend.   So, I remain mainly in cash and hold a few puts in my IRA.

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