The Dow upwave… little train stilll chugging along…

2010-03-27-induLike everyone else in the world we are expecting a downwave — or a correction, or a retracement or a wipeout– call it what you will.  Unlike everyone else in the world we don’t let our expectations or predictions or forecasts interfere with our trading.  We do what the chart says to do, and do it when the chart tells us to do it.  At some point in our checkered (plaid?) career, after having nose bloodied many times we learned to respond to the market 99% of the time, not to try to outguess it.  Readers will note that we are still learning this lesson (see euro trades).  Oh, well, nobody’s perfect.

Note, respond to the market, not react to it.  In this case “respond” means that we have a stop set so far down there we can’t see it.

In fact, we watch with some amazement as people who ought to know better short the market or agonize about the lack of volume, or agonize about the employment statistics.  What difference does it make?  We have remarked that this is like trying to divine the temperature of the market when the patient is lying on the floor of the exchange saying 98.25, 98.30, 98.20, 98.22.  Why not just look at the chart?  Those people who have to have their indicator stars aligned are still shifting from foot to foot and are eating their hearts out because they are watching the train disappear down the track.  With us on board, waving from the caboose.   Adios, mongoose.

Here are some facts, as opposed to some indicators.  This wave is now 35 days up, 11.39%.  Here is an interesting fact:  This high (not yet a confirmed wave high)  is 2.1% higher than the previous wave high.  Magee often said that for a trendline break to demonstrate its validity required a 3% penetration.  Often times we buy the new high, especially if the break is strong.  We didn’t this time.  Why not, O Master, O Mysterious Contemplator and Student of Strange Facts of the Market?  Surely there must be a reason.

Please don’t call us Shirley.  Sometimes there is no explicit reason — call it a constellation of factors — the weather, the state of the moon, the feeling, the length of the wave leading to the new high.  Whatever.  Sometimes we’re just waiting to see what will happen.

In this case we’re waiting for the full moon and the Easter Bunny.

Happy Easter Bunny to esteemed readers, and remember don’t put all your Easter eggs in one basket.

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