Sunday, February 19, 2012

Left Behind, Chasing Armageddon

Rapture Sky

The current market environment is rather strange right now.

Based on mainstream news and online media, widespread fear and uncertainty seem to be at all-time highs, yet the stock market is exhibiting extreme complacency, and appears well on its way toward retesting its all-time historic highs.

How can that be?

What is driving these markets higher? All I can think of is that the US equity market is currently dancing to the tune of bullish contrarian strategies in the face of a fundamentally dire backdrop to which EVERYONE (including the general public) is most keenly aware.

For the time being, this contrarian effect in concert with a whole lot of interventionist help from the most powerful central banks on the planet is sealing the bullish deal.

Argh you say, you don’t want to go near any of these markets with a ten-foot pole. It’s all rigged, and everything will crash again sooner or later.

We can’t really blame you for feeling that way. Such an outcome is certainly possible if not likely – but from where say might the Dow crash from – 14K, 18K, 20K, or even higher?

Miserable Bear

In addition, if the markets do turn down, wouldn’t you like to know when it is most prudent to short the new downtrends? Regardless of whether we get another bullish crack-up boom or a devastating market decline, do you really want to be left that far behind, again?

Seriously, setting aside the absurdity, hubris, and folly in taking stabs on calling entries and exits at absolute tops and bottoms, our empirically proven trading strategies are fully capable of recognizing when a major bottom or top has clearly reversed course and has begun trending in a new direction.

Granted, sometimes we have to pay the premium in getting head-faked and whipsawed regardless of which side of the market we are on, but overall, that is a small price to pay when one compares it to feeling completely left behind.

The inevitable head-fake/whipsaw premium is also a very reasonable price to pay for long-term success and staying power, and it assures that we will never take too big a hit or get train wrecked beyond repair.

Ch-Ch-Changes – Turn, and Face the Strain

Sure, times are changing, but change is constant. At times, change is imperceptible, and at times, it appears much more pronounced.

As we move into the balance of 2012, and reflect on what has taken place over the past three years, change and paradigm shifts of significance certainly feel much more intense than typical.

1988 Rapture Book

How many times throughout history has humankind been compelled to believe that a catastrophe or that the end of the world was imminent? If you answered, countless times, you would be correct.

However, this time, you may find yourself believing that this time it really is different, and what we are about to experience is the real McCoy – Armageddon by any other name.

Hell, with the Mayan calendar locked and loaded amid its well-publicized countdown to doomsday slated for December 21, 2012, given the current state of rising global unrest, wars, debt, imbalances, corruption and the like, everything is most assuredly going to collapse into a global state of anarchy.

Hmm, I guess just about anything is possible, however it really does matter what the mathematical odds are when such reasonable logic and fundamentals are pitted against a financial system that is much like the Universe, sharing in common with it a highly ordered but randomly violent complex system that was created from nothing.

Think back to 1995, which marked eight years following the largest single-day catastrophic wipeout amid the infamous world-ending Crash of ’87, when the Dow was trading near 5700.

At the START of the BULL in 1995

What happened to all of the obedient disciples buying into the cult of Robert Prechter’s pronouncement of an impending bearish RAPTURE way back in 1995?

His compellingly brilliant and dogmatic proclamations that the world was at the “Crest of a Mega-Bearish Tidal Wave” in 1995 was supposed to have saved each of those souls who believed. What happened?

That is exactly right; they were all “Left Behind.” They watched in horror as the Dow threw over that famous rising wedge, pulled back a smidgeon, and then took off like a rocket and never looked back.

Stranded Bear

Trust me; I was one of those initially left behind, and it stung like a bitch.

Timing is Everything

Sorry, but the bear markets of 2002 and 2008 provide absolutely no redemption for such a profound dogmatic error.

Why not, simply because at the absolute print lows associated with both of these bear markets, prices remained more than 20% higher than they were at the time Mr. Prechter staunchly held to his Crest of the Tidal Wave end-of-the-world thesis. Timing matters.

Hey, don’t get me wrong – I respect Mr. Prechter and consider him a brilliant analyst and marketer.

It’s just that you cannot effectively trade, forecast, or invest effectively if you dogmatize or become married to a thesis even though it may be based upon a highly logical, compelling set of fundamental arguments in concert with a host of meaningful technical reasons as to why you must remain a staunch, committed and unwavering believer.

Lessons of the Past

Ancient Bear

I first began to pay attention to financial markets following the crash of ’87.

By 1991, I had a laser focus on the financial sphere studying and absorbing reams of Elliott Wave & Dow Theory, Gann, Pring, Murphy, CANSLIM, Buffett, etc. You name it, I devoured it cover-to-cover, inside out, frontwards and backwards.

After putting all of that knowledge to work, I still lost my initial trading stake of 10K in about 12-months time.

Though completely devastated, I never gave up, and by the time the Dow hit 7500, I retained what proved useful, abandoned all of my false gods and market religions, cast all dogma and bias aside, and began developing my own strategies, techniques, and unique way of charting and navigating the markets.

Since then, I have naturally recovered all of those initial losses and have decisively outperformed the S&P benchmark without any trouble at all.

I have since made it my mission to help as many individuals and entities avoid the common mistakes that I once made.

For long-term investors not keen on “trading” or becoming emotionally paralyzed by the noise and fervor of day-to-day news and the dire /grandiose proclamations of things to come, I have created the Guardian Revere Long-Term Trend Monitor, which is about as simple and EFFECTIVE as it gets in terms of timing the markets over the long haul.

My goal is to share with integrity what I firmly believe to be extremely valuable insights and quantified strategies and methods that I have acquired throughout my 21-years of devotion toward mastering the extremely elusive craft of trading, market timing, charting, and forecasting.

 

Wisdom for the Future 

Polar Bears Hanging OutElliott Wave Technology has made many improvements and upgrades over the past eight years, and if you have yet to see our most recent product upgrades in action, you will soon be in for a treat.

For starters, we have a brand new website and delivery platform.

In addition to our first-in-class charting and forecasting services, we have added a full spectrum solution, the Chart-Cast Pilot, which based upon our proprietary and EMPIRICALLY PROVEN trading strategies, relays and tracks actual trades and performance metrics in three different timeframes.

In order to get a broad, in-depth sampling for precisely what each of our solutions offers, you can click on the “get samples” links within any of our solutions pages. 

You can also check us out at the Elliott Wave Technology YouTube channel . I trust you will find that our record of forecasting and navigating these markets remains second-to-none.

For a more current update, if not already attached, readers may email us to acquire complementary copies of our latest Feb-17 issues of the Near Term Outlook, and Chart-Cast Pilot publications.

We trust that this will earn your loyal confidence. We urge you to come back and join us as we continue nailing the shit out of these markets, while at the same time, making certain that we avoid all serious danger and undue risk.

I hope that you have enjoyed this communication and the accompanying files. I will gladly answer any questions you may have, and look forward to welcoming you back to the mission.

Until next time,

Trade Better / Invest Smarter