Are you onboard with this BULL MARKET IN STOCKS?

19 thoughts on “Are you onboard with this BULL MARKET IN STOCKS?”

1. Why to lose money when it’s so easy to find your way2profit by trading in Indian stock market

2. Hi Adam, this blog was supposed to be "thoughts on “Are you onboard with this BULL MARKET IN STOCKS?”". Only Brad and I have put our names on the line expressing thoughts in this regard. Others seem to have got sidetracked to a vitriolic denigration my trading method. I guess that's ok if it lets off a bit of steam, and the S&P will have the last word.
   I say it may see 1285 before the end of next week and 872 in 2-3 months time

3. DG is RIGHT ON about EW. It is incredibly subjective and pretty much useless - as evidenced by the number of EW "experts" drawing conclusions in direct contradiction to each other. Prechter himself (of EWI) is just a headline grabbing blowhard who tries to sell newsletters by getting into the spotlight.

4. Hello Adam, Isn't it amazing how the market is up 6000 points from 2009 and everyone is still beared up.

   Bernie

5. thanks Adam i agree with you totaly, we need to see the market with tip..toe dancing...it can go up or down in a coin...............protect entry always with puts or short the calls

6. For an example of a brilliant mathematician who has studied the markets and found no discernible patterns, see Benoit Mandelbrot, the originator of the concept of fractional dimension. After his observations and calculations of market data, he concluded that price change distributions have infinite variance, where more data simply leads to greater implied variability of prices.

   In other words, predictability of the markets is an illusion made to make us feel good.

   Consequently, the best methods are those in which predictability is not a necessity: 1) Long-term fundamentals (Warren Buffet 2) Trend trading (trade triangles).

   If you look at successful traders (those who have verifiable managed funds with a substantial trading profit), you will see they fall into one of these two camps. From what I have observed, the rest sell newsletters and crystal balls.

   Again, I am always curious to learn new trading methods that work; if there is evidence of something I am missing, I am very happy to investigate it.

   Cheers

   1. So, I say again, back to the S&P 500, what to you think its going to do today?

      1. Sunday, January 29, 2012
         21:38:57

         sell off to about, (not saying it will stop there) 1302.25. and if it stays below 1310 maybe lower My belief is that the markets are experiencing a phenomena brought about by the lower class (who have believed in the educated class) rethinking their trust.

         1. Adam made the comment that you should not fight the market. My belief is "you are the market: your children, decendents,family, friends, and loved ones depend upon YOU to do the right thing. Grow up. You are responsible for the way things are..

            brought to by the group pronounce "voo Gee"

            1. Will you sell them out for Money? Since its' inception 1913 it has been dropping in value.

7. This is my first response to EW. Everything I write is based on empirical observation, not opinion, so I would not characterize it as "over-the-top."

   I know traders who have averaged over 24% annually for almost 40 years using methods very similar to the trade triangles. In fact, I diversify by investing with them. And before I give anyone any money, they must produce a minimum five-year record of success (the 5 years incorporates the 2008 crash, where some traders made fortunes while others lost their shirts).

   If you know of an Elliot Wave theorist who comes close to these numbers with verifiable, repeatable, real-time success (no curve-fitting of the past, please), I would be very interested in studying his methodology. All I am saying is that, to date, I haven't met one. From EWs that I have studied to date, I have seen lots of talk, lots of analysis, lots of opinion, lots of newsletter sales, but no verifiable repeatable results from a fund traded in real-time. To go back and say "If I had invested here, or there" is like saying, "If I had picked these numbers for the lottery, I'd have won." I have no interest in retroactive analysis.

   I await any fund managers you might know that use EW that I can contact for a record of their success.

   Cheers.

   1. So, back to the S&P 500, what to you think its going to do today?

8. Market prediction is impossible. Many incredibly bright mathematicians have addressed market predictability and found infinite variability. People tend to underestimate the extent to which their analysis is postdictive (facts available only AFTER you see what happened) and the extent to which they tend to rationalize results to make them think they have found a pattern.

   The classic "Hey, there's a pattern there!" responses include Elliot Wave Theory and Fibonacci. If you examine the variability of price and express it as a percent, you'll find that both Fibonacci and Elliot have variabilities that exceed those of price. In other words, the price pattern is such that it can always be shoe-horned into a Fibonacci or an Elliot, giving the analyst the illusion that he has a predictable pattern.

   It's essentially how casinos make their money: they don't win 90% of the time; they win only 52% - 63% of the time (in fact, in some games, they lose most of the time, but ties go to the casino, hence the expected value for the casino is positive). By winning just slightly more than their customers, casinos are able to give hopeful players the illusion that they can win by allowing them to come close on repeated occasions: "Oh!, if I'd only hit when I stayed I would've gotten blackjack!!"

   Same thing in the markets. An Elliot wave theorist either back tests or forward tests and is able to rationalize the result into his model. But there are hundreds of thousands of Elliot wavers on the planet, yet none of them consistently make money. Even the best of the best in the Elliot crowd eventually crash and burn, usually after embarrassingly picking a bull or a bear on live TV and in their newsletters, only to see the opposite take place. Kind of like the minister who predicted the end of the world a few months ago.

   The fact is, market direction is unpredictable and irrelevant to a good trader. Play the trends, no matter what your brain or anything else is telling you. As I've said before on this blog, the most successful trader I know is right 38.2% of the time, and he makes millions every year. Being right and making money are not the same thing in trading.

   Cheers

   1. What is predictable is the defenive, over-the-top reponse we always get from GDDye when ever E W Theory is mentioned..
      As for the market, let's wait and see.

9. I would tend to agree with Gary...it would seem vry risky to get on board right now.

10. typo RE:..REUTERS/JEFFRIES CRB COMMODITY INDEX (SPOT)

    Leveraged ETF’s: (Long is UCD ...not UCO)

11. Hi Adam, I disagree with your claim for a bull market. A 4 month bear market retracement probably ended in the Dow and S&P 500 on Friday. I expect sharp, deep, downward movement to begin this week. Regards, Gary

    1. Gary - Could you expound a little on your analysis. Thank You

       1. I use Elliott Wave Theory. Looking at the big picture the market went from bullish to bearish with the 2007 to 2009 decline we now call the Global Financial Crisis. That decline was then retraced about 80% by the rise from April 2009 to May 2010. The bears resumed then with a sharp drop in August 2011, the 90% retracement of which we are seeing the end of right now. Extreme bullish market sentiment and lack of breadth in the S&P advance also point to a PROBABLE decline. I think chances are v high that this decline which possibly started on Friday will be of quite stunning severity. As always, Adam, we are considering probablities....

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