What are the top detectors saying?
Aw come on. Be kindI don't even know what they are. Did a search and nothing came up. Just need a little direction & help.
Alphastotle wrote: "Is that an example of the laziness that now pervades society? Maybe you should track them yourself."That's a bit harsh, don't you think? I took his question as a spark for discussion.Mike
Is that an example of the laziness that now pervades society?An article in todays WSJ, titled, "Forget the Old College Try, Ring the Concierge", an example of how the wealthier students are having an upstart concierge service do all sorts of things including the "beer run."Maybe I should have posted this under the discussion on wealth distribution.
Here are some links to indicators/individuals calling for a correction-http://www.portfolio-cafe.com/6368/look-out-below-dont-trip-...http://seekingalpha.com/article/1250031-dow-new-highs-vs-def...Tops however are much harder to identify than bottoms, so it remains to be seen...
Tops however are much harder to identify than bottoms, so it remains to be seen...Because tops are slower and more rounded, I find them easier to deal with than bottoms which are often sharp reversals.DB2
Because tops are slower and more rounded, I find them easier to deal with than bottoms which are often sharp reversals.Indeed.You usually have lots of time to edge towards the exit during a topping process.For whatever it's worth, there might be some signs of a top.Consider this graph, Nasdaq breadth trying to predict the averages S&P 500 company.http://stockcharts.com/h-sc/ui?s=$NAHL&p=D&yr=1&...Note that when the red and/or blue smoothed breadth lines start falling,the performance of the solid RSP line in the next while tends not to be good, and vice versa.It's not easily turned into a specific signal because of the many little squiggles,but if fresh equity highs happen while breadth is already weakening it's sometimes a top.That's the core logic of my fancy numerical top detector.In this time period, the weakening late last July was a false bearish note,but all the other direction turns were pretty prompt and pretty good.What about now?The smoothed breadth lines turned down fairly firmly around Feb 21-22.They have bounced up a pinch in the last couple of days, but notobviously enough to represent a fresh uptrend--yet.The recent equity highs have been met with (depending on your reading of it)a weakening breadth trend or at least certainly not fresh highs in good breadth.Far from definitive, just one straw in the wind.But if the red and blue lines resume the downtrend that started acouple of weeks ago, it looks more like a top than not.Tempered always with the knowledge that tops are hard to spot, andit's not usually all that important to spot them promptly.It's gratifyingly rare for the market to fall very much very soon after a fresh high.Jim
For whatever it's worth, there might be some signs of a top.To be a bit harsh, I think looking for a top is a fool's game, and is probably evidence that the person looking for a top is probably a foolish (small f) investor, akin to a newbie poker player trying to draw an inside straight.Alas, the world is full of such people.OTOH, hope springs eternal, as evidence by all the TV informercials on how to become rich without lifting a finger."The financial markets are very efficient machines for moving money from the many to the few.""True bear markets start slowly giving many months to get out as was the case in both 2000 and late 2007 into 2008. Fast declines, or panics typically retrace quickly and are better bought than sold."If you look at market charts carefully, you see that tops are pretty rounded. So there is no need to be in a hair-trigger to get out -- there's plenty of time once the market truly is going down.So you sell 15% below the top -- Big deal. You've still ducked out on the rest of the decline. But you don't get shaken out by the 10% dips that all the time happen in ongoing bull market.
"The financial markets are very efficient machines for moving money from the many to the few."Speaking of cynical investing quotes, this is a favourite of mine."When a man with money meets a man with experience, the man with experience leaves with money and the man with money leaves with experience."Apropos nothing at all, here's one attributed to Mr Lincoln that Mr Buffett would probably like:"If I had eight hours to chop down a tree, I'd spend six sharpening my axe."(for "sharpening my axe" one might read "sitting on cash studying how/when best to invest it")Jim
Whether you are looking to avoid the first -5%, -10%,-15% etc of the start of a bear market in a way you are still trying to call a top. It's not easy to see that you are really in a bear market at any given moment, though very easy in retrospect. So some sort of methodology is needed, after prices have gone down 12% over a period of two months is it a bear market or just a temporary dip in the bull market? I'd like something to temper my gut feeling, which is usually wrong. While the biggest risk to your wallet is in the last waterfall phase I would like to be out sometime before then. Considering that bull markets last longer than bear markets, and that so far eventually indices tend to go higher, I agree that bull markets should be given the benefit of the doubt. At least in countries that don't lose big wars.Perhaps the biggest opportunity exists toward the end of a major bear market, the "I can't stand it anymore I have to get out" phase. Fortunately I do have good indicators for that, something to help me overcome the fear I share with others. But such opportunities are rare.
Just an interesting link I ran across, talking about the current top.http://www.roguetraderette.com/2013/03/05/its-really-not-tha...She's a trader, but writes interesting stuff.Her next-last comment is right in line with my own philosophy: "I'll wait for my positions to stop out. If the rally finishes, so will my positions. But [until then] my positions will still be in play, making me money. I'm not interested in trying to exit on the top tick."
Alphastotle wrote: "Is that an example of the laziness that now pervades society? Maybe you should track them yourself."This guy appears to bounce from board to board just to stir up crap. He even posted on one board that he couldn't wait for the first accidental school shooting to occur in South Dakota. I've ploinked him.
He even posted on one board that he couldn't wait for the first accidental school shooting to occur in South Dakota. You really have a great deal of diificulty comprehending sarcasm, don't you?
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