This was a reply to a post on Seeking Alpha. This reply came after reading about 20 comments in-a-row that showcased what I saw to be nothing but speculation on the future (or as we say “predicting”) of the economy and stock market. This is not the best way to go about doing this for a living. Those of us that do this for a living (ask MarketSpeculator) do not care about the news, the dope sheets, or any other information coming out of DC or NYC. Seriously, all this talk about the stock market is nothing but noise. Learn to focus on the charts more and then you can spend more time with loved ones. Trust me, engulfing yourself in the nonsense that is out there in regards to the Fed, the Pres, or Congress is going to eventually drive you crazy or drive you away from friends and family. I no longer (learned this sadly too little too late) find talk about the economy or the state of the world interesting or fascinating. You know what fascinates me? Life. Not the problems of the world. You know what makes me money? My charts. I have never made money any other way. The day trading crap, the options B.S., buy-and-hold, and the “value” play has never made me money personally. The news has never made me money. Nope, when I think about all the money I have been able to take out of this market, I can honestly say that none of it came from me or my thinking. It all came from my ability to read the charts. This is not easy but it sure is a lot more interesting than a lot of other endeavors for us analytical personalities. If you are new, never forget, when I started out I didn’t know anything and fourteen years later I still know nothing. The market is my boss, the charts are my guide, and my brokers are my weapons in the war against myself…err I mean the stock market (which is really yourself). I hope that everyone who believes that a top “is just around the corner” finds this informative. I hope you all had a wonderful weekend and I wish you a profitable week. Aloha from Honolua Bay.
POSTED COMMENT ON SEEKING ALPHA:
Knowing your history of past stock market cycles and past big winning stocks would go a VERY LONG way, with most posters.
Do not try to call tops. Let the market tell you when it is time to top. You will have climax runs (just like in Jan-March 2000 and July-November 2007) in leading stocks. When these stocks show topping signals that William O’ Neil has painstakingly proven via research going back over 120 years, then and only then should anyone try calling a top.
Do you know how many stocks are flying higher, with price over the 50 dma, with the 50 dma over the 200 dma, and volume consistently over the 50 dva? There are too many to name! So many stocks are running but are not quite yet showing climax tops. So until you see these climax tops (which are obvious to those of us with extensive training in technical analysis–14 years) there should be absolutely no reason to call tops or predict the end of the rally. Just go with the trend until it ends. When it ends, move to cash, and then get short, if a new bear market is starting.
If you know your history and actually give yourself more than one year to “make-it-rich in the stock market,” you might find that this game isn’t as complicated as 99% of the comments on every post on Seeking Alpha makes it sound like it is.
My system: a form (my own) of CANSLIM. Can you learn this system in one year? Absolutely not! This stuff takes years. This is my 14th year in this business and the only thing I know is that I know nothing. However, my charts know EVERYTHING there is to know at that exact moment. Do surprises happen? Uh, yeah. Of course. This is called life. Is TA a crystal ball? Heck no. Think of TA as a windsock. If the wind is blowing to the west then it is blowing to the west. If the market is moving higher, then it is moving higher. Fighting the trend, calling tops/bottoms, and making your ego bigger than the market is a sure-fire way to poor performance and/or a complete burnout.
This game isn’t easy. Those that get rich quick usually end up giving me all the money they made that “easy first month/year.”
Listen, I am a Conservative and I am a hardcore proponent for lower taxes and less government. However, how do you all “know” that everything will end bad? You don’t. You are only speculating on the future. The only thing you should be speculating on our stocks and you should only be doing that if you really know what you are doing. You might be able to tell someone you know what you are doing but inside your own head you know if you are lying to yourself or not.
Bottom line: When the market is moving up and stocks out there like RINO, CTFO, OMN, PAET, RTLX, TXIC, AXU, and BZ, since the rally started in March, are making such big gains, there is absolutely no reason to top call this market until you actually see some real topping action. I have been hearing top callers the WHOLE way and look at the gains they missed. Such a shame.
Here is a helpful hint and it is real simple. Go take a look at the history of this, if you don’t believe the truth. If you would ONLY go long stocks when the general market is above the 50 DMA with the 50 DMA over the 200 DMA and go short stocks when the general market is below the 50 DMA with the 50 DMA below the 200 DMA, 90% of you would CRUSH your returns (obviously, I am not talking to everyone so please don’t attack me too hard ;)). I am simply stating facts and nothing but facts. I have all the proof you need and I did not even come up with all the info. These guys did:
William J. O’Neil
Jesse Livermore
Nic Darvas
Bernard Baruch
Gerald Loeb
Richard Wyckoff
Jack Dreyfus
If any of you do not know the stories and history of these individuals, you might want to take some time the next downtrend (you guys call it a “bear market”) and read-up on some of these guys. 🙂
me:
bear market = no such thing
bull market = no such thing
there is only a market “in an uptrend” or a market “in a downtrend.” When you call it a bull or bear, you might not realize this but you will subconsciously adopt that position and hold onto it more than you would had you simply called it “a market moving up” or “a market moving down.”
Hey, when the market tops, I’ll write something for Seeking Alpha proving why we will have a real top. Just like I did on RealMoney.com in early 2008 when I was initially called a “fool.” I welcome the friendly and non responses to this post, if there will be any at all. Aloha.
This is my good act of the month and I hope you all enjoyed this being typed from a very prime surf location on the upper west shores of Maui. Mahalo for reading and aloha nui everyone, surfs up!…just like the market.
Market Wrap Videos:
There is a new video for subscribers on the Gold Forums. There is no video two due to the fact that we had zero buys, shorts, or full sells.
Hi Josh,
Glad to see you back in the saddle!!! I missed your insite and analysis the last few weeks. I know that sometimes one must let time heal..
I agree that price and volume rule, and oppinions don’t mean shit. If you listen to them you will loose money, and I have. Yet it is still hard to ignore them. I’m not sure that you can completely…….even though I try.
I’m a newbie only 9 months with you. 12 years in mutual funds before.. I joined you to learn about direct stock investing, and you have been worth every penny of it, and I have learned so much.
My main problem has been getting stopped out. Between your rule of getting out of half of a position if it goes south emediately, and O’neils no more than 7 or 8%. I kept getting stopped out of perfectly good positions That later moved up…and loosing money!!!
I have moved from these rules to looking for the previous lows to set my stop limits. The results have been much better, and I started consistently making money. I understand that if the market rolls I put more in jeopardy.. My rational is two or three 7% losses equal 14-21%
Why not set limits at 12-18% to begin with and be able to wait for results and be more carefully with the selections choose. I have low six figures to invest and do not feel comfortable investing in all you recommendations. Am I nuts?
In a bear market, using those rules will get you killed. My sell half of it if it does not move up immediately is to protect new investors from any kind of loss whatsoever. These rules are not mine. They are rules used by past geniuses that my ignorant self took and ran with. For Gold members I list all partial sells and full sells. By watching my sells there it should be obvious when and why I sell. If a stock pulls back on low volume, in an uptrending market, there is no way I will sell just to cut some losses. O’Neil has proven the best do NOT pullback more than 8%. I am sticking with that for you new guys. The platinum and gold subscribers know that my game is so refined I know when to sell 10%, 20%, 33%, 50%, 66%, 75%, or 100%. It is like breathing to me–strike that: it is easier than breathing for me. This is something you can not learn in nine-months. Therefore, you must stick to the rules laid out by men better than myself.
Thank you for your kind words and I wish you great success. Remember, this is a marathon, not a sprint. As soon as the bull side will look “easy” and a “for-sure” place to make profits, a new bear will start and convince everyone to buy the pullbacks. History always repeats itself, in the market and sadly sometimes in life.