I'm not sure I have a great feel for why the market is lifting today. Fortunately if you are somewhat invested you don't need to know why. I wonder if it has something to do with China raising rates by 27 beeps. I would think that would cause CNYJPY to go up (although that hasn't really been the case today) and may also cause the yen to go down against the dollar (which it is doing) but maybe I am missing something obvious.
It is unlikely that anyone can know every single day why the market is doing what it is doing.
Take this as a microcosm for the market related to the video over the weekend and the bomb shelter-lite portfolio post from this morning.
Humor me that there is not obvious reason for the market to lift today. The market goes up a lot for no reason at all quite often, again take the day as a microcosm.
Being bearish and lagging this sort of thing is not horrible but being bearish and missing it entirely could be. As the market rallied 15% in the second half of 2006 I repeated this idea over and over.
If you really are long term and you have a strategy to take defensive action, if needed, I'm not sure trading around a 5% dip is the best idea.
FWIW I have not traded around this last month. I noted things I lightened up on in the fall as I was taking some action, at a time where there was no emotion involved so that I would not have to try to react when the market was all worked up.
The attempt to be out in front of turns in the market will not always work but you have a decent shot of being less emotional during turns in the market, and keep in mind it is too soon to know if we are seeing the market turn or not.
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4 comments:
I have bee pollen on my cereal every morning.
re mkt, a lot of chatter over the weekend about technicals...sentiments way oversold....the stuff I follow is not showing much volume on buying, though.
It's a dangerous tell when the market is up, but volumes are not exactly up - QQQQ is only at 50% of its average volume (3/4 of the way through the day)... today really seems like it is in the noise.
If the 5 day MA of the Value Line Arithmetic Index crosses above the 75 day MA it will tick my timing model up to a +3.0. That will be a signal to go 100% long. My model hasn't been at 3 or above since early last October.
Why so bullish? 3 of my 4 trend indicators will be positive and 2 of the 4 sentiment models I track are at OS levels. It's unusual to see both trend and sentiment indicators simultaniously positive. We never even got close to touching the 250 dma of either the Russell 3000 or the Value Line Index.
I wouldn't be surprised to see some backfilling over the next week or so, but I can't imagine a retest of the bottom given the current level of pessimism. The risk/reward equation has definately shifted back to the bulls.
i put it a call to the markets and asked about the move today.
they said they are up because there are more eager buyers than eager sellers.
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