Golden Rules

1) Every bear market is followed by a bull.

2) Bear market is rarer than bulls.

3) To get a true bear market, there must be a negative fundamental event that will take the market by surprise.That is , not price in.

4) One must develop self-control, both to refrain from attempting to profit by the monthly fluctuations, which 95% of the people endeavor to follow, and to act quickly and take advantage of the major movements, which 95% of the people fail to profit by, either because they are infatuated with prosperity or scared by panic or depression.

5) One must develop patience, and remember that it takes years to build up a fortune in this way, and that is an especially slow process as first...

6) Market is about relative expectation, not absolute result.Look for reality that different with what market has priced in.


Saturday, January 15, 2011

Will it repeat again ?


Current chart of the Dow you can certainly see a similar "ABC" type rally from the March 2009 low much like occurred in the mid 1970's and way back in the 1915-1917 time period. "A" was a 74% rise while "B" was a 15% pullback which has been followed by a 23% rise so far for "C". Meanwhile a 61.8% Retrace (red line) from the Dow's current high would be around 8500 which would be a 28% correction while a 78.6% Retrace (blue line) would be around 7600 and a 35% correction.
Posted by J at 6:06 PM

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