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Buzz and Banter


You're right Tony.

There has been a great deal of discussion in trading and money management circles in recent weeks that technicians are as divided over the market's current state as they have been collectively in many years. One view that would put many of the technicians back in the same camp, so to speak, is that the current weakness in the market will turn out to be the "false" breakdown that Toddo mentioned yesterday, followed by a "false" breakout to the upside, which then concludes with a more substantive move lower. I know quite a few technicians who believe there is still upside potential left in the market, but who also believe we are simply in a cyclical rally phase within a larger structural bear market.

Those who are involved in the more subtle "nuances" of the market are consequently being lumped into the "bullish" camp by some, while those who are looking to discern the longer-term movements are being labeled the technical "bears".

For my part I try to stay emotionally detached and view my indicators with a "what is, is" attitude. This doesn't prevent me from constructing a thesis, mind you, but it does help prevent me from anticipating the anticipators and rolling dice instead of managing risk. But that's also, I think, just a question of style, not a difference of opinion.

I had a similar conversation with a client of ours last week. He was concerned that our work is becoming more bearish while his "in-house" technician was talking about the potential for further upside. It turned out that, ultimately, we were actually very much on the same page. His "in-house" technician believes we are still in a structural bear market, as do I. The question is what happens between where we are now and when (and I believe it's "when" and not "if") the larger structural trend reasserts itself.
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