Why is it that we all appear to be addicted to predicting the markets? If you will review the many pundits’ predictions from the beginning of this year (and every year) you will find that it is very rare that anyone successfully predicts the market’s performance over the coming year. Whether you look at Jim Cramer or Gary Smith or Tobin Smith or any of the media pundits you will find that no one predicted this year’s melt-down, although they all assert that they have been telling people to sell since the beginning of the decline. (Revisionist history anyone?) Given the many years of erroneous predictions by all market seers, why do we continue to look to anyone to accurately predict the market’s course? The simple truth is that the best we can do is to assess the current trend of the market and align our trading to be consistent with it. And we never know when a trend will end. Therefore we MUST ALWAYS put in place stop loss orders or other methods to protect each position from a sudden change in the trend…..
For me, the current long term trend of the market remains down, and my university pension has been in cash for months and remains unaffected by the market carnage.
However, the short term trend of the QQQQ remains in an up-trend, having completed its 13th day. The GMI remains at 2 (of 6) and the GMI-R at 3 (of 10). The Worden T2108 Indicator is at 51%, well in neutral territory. But my technical indicators are “bearly” positive and unimpressive. So, I remain mostly in cash in my trading IRA account.