Technical Analysis Shines Once More, Herd Late As Usual

March 14th, 2009

Let me try to sum up this week in one word: UP! It almost seems like weeks have gone by since we were down in the 600′s on the S&P. In nearly 4 days, we have literally witnessed a complete reversal in market psychology. The news broadcasters are claiming it’s the beginning of the “New Bull Market” on every channel. They have analyst after analyst screaming “BUY!” And rightfully so considering how far we moved up this week in percentage terms. Can you blame them for wanting to attract clients?

 

But to be honest, this is exactly the kind of mentality that dumb money – the crowd, the herd, whatever you want to call them – always follows. They are late – as usual – to the dinner table and the profitable moves. Once they see big moves they jump in hand over foot to get a piece of the action. They chase moves instead of being ahead of them. Nevertheless, they always end up missing out on big money – like the 30%+ moves that members and I profited on this week.

 

It’s times like these that I cannot stress enough how important it is to use technical analysis. Charting will always show the early signs of reversals and big moves in the market. Because if a some securities big move made it all the way to the news, then you have completely missed out on it! Having said this I think that we are definitely headed for a pull back next week. Yes we have made a very strong bullish move – there’s no doubting that – but this market will not go straight up. There will be another Member’s Only video tomorrow night with my strategy for next week – imagine if you saw it last week how much money you would have made? In the Trading Video below I went into detail on GOLD, OIL, and the S&P.

 

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