Assuming that the purpose of the market (the market always has a purpose) was to nauseate everyone and make them want to throw up, the purpose has been achieved. Bungee jumpers like ourselves who just want to see if the cord will snap back had a ball. Investors threw up all over the Street. But if you know what’s going on you can enjoy watching the herd rushing back and forth — and you can even make money off it. The hidden agenda of the last week was: “Shhh–buy now before the herd catches on… Bargains galore.” This is what the market always says as it is putting in a B wave. What the market says as it is putting in the C wave is: “Gotcha!”
So we continue to be astonished at the chatter from the cognosenti, punditry, talking headery, knife catchers who are talking about “what to buy” instead of what to sell. This is living proof that man is directly descended from geese. And that the geese can’t even remember three years of markets. These “experts are remembering March of 09, not November of 08.
In jig time a breath-taking array of targets have been taken out. BUT THIS DOES NOT MEAN THAT THE DOWNWAVE IS OVER.
So what wise traders do (as distinguished from “smart” traders) is wait for the Zeta wave. Readers should be aware that this rally has not yet formed a point on which to base a trendline for the Zeta wave to cross.
Productive strategies now are shorts of the market, shorts of selected stocks and complete hedges.
Time frames longer than a day, if trading, are dangerous (you probably noticed). We were long Thursday and Friday, as a hedge against our shorts, which we then closed and then closed the longs.
Here a historic picture:
Do not be deceived by the last two days. Also gold flashed a trader’s sell signal. Trend follower’s sell stops are illustrated below.
139???! Sorry, that’s where the long term Variant 1 stop is. The Variant 2 stop is illustrated 181.32. We certainly wouldn’t be buying any fool’s gold here. Wait for a Zeta wave.
Go to the Hamptons. All the real traders are there. Go to the ball game. Treat this as cheap entertainment. It better be cheap — otherwise you haven’t been listening since February.