Monday, August 11, 2014

Did you buy the dip back in February? No? Who told you not to?

I was poking through someone's blog of bad calls, when I saw there was some similar "market collapse" commotion going on back in the beginning of February.

Maybe this JNK cycle is going every 6 months and not every year?

Here's the chart:

You see that? Back in the end of Jan and beginning of Feb, JNK turned down a bit.

So the market responded back then by diving for a bit too, as you can see from someone else's chart from early February:

stolen from someone else's website

And dammit all if that wouldn't have been a really fantastic time to buy DIA calls. Cuz shit, Feb 3rd was the bottom.

I mean seriously, absolute bottom.

But the guy who made the above chart dumped his DIA calls the same day for a loss. WTF? Is that because he's reading loonies like Tom McLellan, who just a few days later asserted that the market was about to crash cos some bullshit Coppock curve turned down?

Anyway, just one week later, I guess he still didn't believe that the market had bottomed on Feb 3rd, because he then posted this:

Which is eerily similar to a post from today, meant to warn y'all that the market could turn back down when it hits a magical red line.

That gives me faith that today's red line will be broken through successfully as well.

I guess if all you read are doomers like McLennan, you're going to doubt the market so much that you not only will bottom-tick sell your DIA calls, you'll also refuse to participate in the advance from the bottom til after you've proven it's broken out to a new high.

Because you're going to be scared of the market. Scared for no damn reason, as it turns out time and time again.

But if that's the case, why trade in and out of the market in the first place? The idea behind trading in and out is to exceed the performance of buy-and-hold.

If your strategy (or your fundamental disbelief in the American economy) is instead forcing you to stay out of the market, and trade too often, and not buy low, then maybe you should quit trading altogether, buy the frickin' SPY (or a few hundred pounds of gold, whatever tickles your fancy), and play Skyrim for the next ten years.

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