A Pause In Trend: Where is the Money Being Made?
As shown in the last post, we have to drill down to intra-day time frames to find a price trend in the Stock Market. That hourly trend ended almost as soon as it was posted.
When one does locate a short-term trend, you can be almost certain that it will be a short-lived affair with a reversal that will backtrack over the same gains that were accumulated earlier.
Because most Human Beings are longer-term oriented, they’ll largely hold on too long to a position expecting (hoping) that a longer-trend will kick in and save their position.
It almost never does.
The Stock Market indexes are a good example of this process. The Market is at a critical turning point on the Long-term Monthly basis.
It’s literally resting upon a set of lows that have been defined over Time and Price Momentum, so, a significant pull-back at this point will endanger a trend that goes back years in time.
Will Stocks tip over the edge?
Sorry, but that’s not the way to bet when it comes to the majority of investors being right.
Nature pretty much guarantees that that won’t happen too often.
Those who foretold the the Great Stock Crash of 1929 are famous today because they were so few in number.
The masses of investors just never see it coming, so, there’s some comfort to draw today as literally everyone believes a crash is imminent.
There are some ignored fundamentals that can back up a higher market, so, this bears watching using our indicators, although, ‘News’ is hardly the deciding factor when it comes to making money from the markets; especially at times like this.
Note on the chart. ‘Bad News’ or ‘Worse News’ seem to be the only choices offered to investors and traders today. But, is that an accurate portrayal of the real opportunities out there?
It is most assuredly not.
Who are they and just what are they doing that so many others are not?
They are the ‘Counter-Trend Traders’ who, for lack of a better description, are working with the trend-less aspects of the Market by trading against the recurring Tops and Bottoms.
This approach requires a disciplined mindset and is one that W.D. Gann was expert in applying in his days as a floor trader on the Exchange. Most assume that Mr. Gann only traded long-term, however, during his brokerage days and as a member of the Exchange he achieved a remarkable 90% plus success rate with short-term trades conducted daily.
To do that successfully in non-trending markets required the skill of trading against the crowd and Selling Tops and Buying Bottoms. Most of the techniques for doing this consistently require one to always go against their natural instincts by Selling into a buying frenzy and Buying into a selling panic.
One must have the skill sets to locate where those critical price points are located of course (you can find out how in our ‘Excalibur II: Mastering Sideways Markets’ technique; part of The Harrison-Gann Master Course). Good Trading. – George