Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

You Can Be Right or You Can Make Money


Perfection isn't necessary to obtain excellent performance.

Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community.

Many players are haunted by the specter that it's 2003 all over again. Well, I guess it's only the bears' lair that's spooked.

After that exhaustion low, when the market became overbought and the normal expectations according to all the overbought indicators and bullish % etc. etc. etc. pointed to a resumption of the bear trend.

All except Swing Chart Theory. When the monthly swing chart turned up and stayed up and defined a low on every turn down, it was a signal that something was happening and the bulls knew what it was -- Mr. Dow Jones.

Then there was also the small detail of balance. When the S&P and Dow Jones Industrial Average recaptured 50% of the decline, they were in a stronger position and the idea of a test of the highs was worthy of more than consideration.

My view is that that was then, this is now.

Someone sent me an email saying that they love Minyanville, but that there have been more than a few professors, including myself, who have been crying wolf and been wrong about the rally.

My recollection is many of us who are looking for a top -- and admittedly have been doing so for the last month -- were spot on about a low forming in March that would lead to a bigger rally that we had yet seen in the bear. In fact, my comments in February targeted March 10 and I offered that the first thrust should be at least a 1,000 DJIA points within weeks. I thought there was a good chance that the 3-month rally high in June may have been a more significant top, but did identify the first week of July as a major turning point. I was dead wrong about the idea that the rally off that low would only lead to a test of 950. I didn't see 950 being captured. When it was, a three-eighths retracement of the bear to 1,007 to 1,004 became a projection.

The reason for the recap is that as I learned from someone much smarter than I that it's one thing to have an intellectually bearish view and another to make a bearish bets.

My report has had many long side plays over the past months -- even today it was leaning long. As I said in my report the other day: "I have been in the game a long time and learned years ago that only the jumble survive. The market is a terrific arena to disabuse oneself of any illusions of perfection. The truth of the matter is that it is not necessary to be perfect to obtain excellent performance. And therein lies the rub: Do you want to be right or do you want to make money?"
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos