Most people are too afraid to buy when something “breaks support”, as it is supposedly bearish. In an uptrend, breaks of support are opportunities to go long, not times to freak out. It’s very different, I understand, but it “works” pretty well. We just have to understand the nuances of it, and learn how to anticipate and work with it. And to add, it’s not easy, but nothing in markets is easy. Having a pretty good approach to markets, and having some confidence, helps greatly in ignoring all of the useless noise out there about markets.
Next up are a few reasons why I spend so much time on the content focused on short term trading. My focus during the trading day is mainly short term except when there are excellent long term situations setting up. My allegiance/bias in markets is only to doing well, not on any time frame, nor any other issues. And to add there are and will continue to be lots of content focusing on the longer term, as I do both time frames. But the more actual trades or investments we make, within each one are blatant and/or nuanced lessons. So the more we do, the better we get, especially when we can learn to focus on the “reasons” for our winners or our losers. And that’s a key, we have to understand what we learned, by having a pretty good insight into what we’re looking for. So even if you’re not doing short term trading, there are valuable lessons in just having an open mind to it, and observing and absorbing, by reading, and viewing videos. These technical setups can be transferred to all time frames, with the appropriate adjustments. This technical work meshes very well with a dynamic and flexible view of economics. It’s fine to have a long term view, but it’s the timing of the opportunities which is so important. And again, it’s the actual doing which is the best “teacher”.
And speaking of the dynamic nature of markets and economics, the Federal Reserve is once again very confident. They have a long history of getting very confident right into the highs in the economy, just as in the last two big tops in 2000 (Greenspan) and 2007 (Bernanke). Even in 2007, Chairman Bernanke was talking about his confidence. In this post, are quotes from Greenspan and Bernanke who were oblivious to what was happening. Janet Yellen has had an easy time so far, and seems to be on the same path which the Fed usually follows – raising rates until something breaks. It is slowly seeping in that Trump’s grandiose plans will not be fulfilled. There’s a great concept in markets that certain things don’t matter….until they do. It happens constantly in markets. And it is about timing, as everything in markets is. For instance, for a couple of years prior to the late 2006 peak in US real estate, a few wise folks were pounding the table about the toxic situation with mortgages and derivatives. But they were derided – why? Because the market was still going up. So there’s always a theory to justify every move in markets. We saw it in tech into the March 2000 peak, with the idiotic comments about how those companies would overtake the world. Many of those companies are long gone, and even the many of the ones still here, like Intel, are nowhere near the bubble highs.
So the theories about “why” the stock market is going up seem plausible, and are accepted, because..the market is going up. Right now, it’s because Trump is great, and the Fed is great, therefore the economy is great – therefore the stock market is great. And long term, I remain absolutely bullish on the stock market, and have been since 2009. I was derided back in ’09 for my super bullishness on stocks (and gold), and still completely disagree with the stock crash crowd. My super long term view is for massively higher stock prices. Many years ago, I came up with an outlook for different asset classes (like the Dow), with a dynamic view in mind.
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