In January of 2008 we were stopped out of our long positions and went short the Dow. (See chart.) Except for a brief toe in the water in the May bull trap we have been short ever since. Is this because we are geniuses? Well, yes but — No, it is because a simple technical analysis exercise dictated our position and we had the discipline to do it. The beauty of technical analysis is that you don’t have to know the future. You just have to know what to do right now, this minute, and the future takes care of itself. In this case being short when the market is falling off the cliff.
Here is the Dow today, the 18th, after the blood letting of Lehman, and AIG. This is the natural consequence for investors who do not heed sell signals.