It's been over two weeks now since the seven sentinels went on a sell. In fact, the SS have given two sell signals during this time. So why is the market showing so much resilience? Is the SS wrong?
Perhaps it's all those folks who missed so much of this past run and don't want to miss the train. Or maybe it's traders and investors who are now pointing to the markets resilience and saying we are now in a new bull market. Money could also be finding its way into the market because of the perceived notion that the economy is turning the corner based on some recent market data such as consumer confidence or a slightly dropping new claims filings. There seems to be no shortage of economists now predicting the recession will be over by the end of the year too.
As many of you know, I am not sitting in the G fund because I'm necessarily bearish, (although I am), but more importantly because the Seven Sentinels are signaling that the market is about to turn back down as part of a normal cycle.
It's tough to watch these large moves higher when they occur. They can make us second guess our position. We may think something has changed that we aren't seeing.
So why do we sometimes feel anxious? Why does our resolve waver?
It's the waiting.
That's the toughest part of following a system. We have to remember that the market is not on a timetable. It will make its move when it's ready. We must remember that warnings are usually given before the market makes a turn. We have to pay attention to them and trust them to a large extent. So far there really does not seem to be any reason to question the validity of the past SS sell signal. We just need to let the market play out now. There is still a lot of noise out there and not everyone is paying attention or believes a harder downturn is coming soon.
But the SS says there is. It's record the past two years justifies giving it a lot of credence. Last year it took seven months for another buy signal to be generated after the sell in April. The system sidestepped a very significant amount of carnage during that time, but one had to sit for seven months. Seven!
Can you sit still that long if necessary?
May I recommend getting a nice comfy, padded chair?
Perhaps it's all those folks who missed so much of this past run and don't want to miss the train. Or maybe it's traders and investors who are now pointing to the markets resilience and saying we are now in a new bull market. Money could also be finding its way into the market because of the perceived notion that the economy is turning the corner based on some recent market data such as consumer confidence or a slightly dropping new claims filings. There seems to be no shortage of economists now predicting the recession will be over by the end of the year too.
As many of you know, I am not sitting in the G fund because I'm necessarily bearish, (although I am), but more importantly because the Seven Sentinels are signaling that the market is about to turn back down as part of a normal cycle.
It's tough to watch these large moves higher when they occur. They can make us second guess our position. We may think something has changed that we aren't seeing.
So why do we sometimes feel anxious? Why does our resolve waver?
It's the waiting.
That's the toughest part of following a system. We have to remember that the market is not on a timetable. It will make its move when it's ready. We must remember that warnings are usually given before the market makes a turn. We have to pay attention to them and trust them to a large extent. So far there really does not seem to be any reason to question the validity of the past SS sell signal. We just need to let the market play out now. There is still a lot of noise out there and not everyone is paying attention or believes a harder downturn is coming soon.
But the SS says there is. It's record the past two years justifies giving it a lot of credence. Last year it took seven months for another buy signal to be generated after the sell in April. The system sidestepped a very significant amount of carnage during that time, but one had to sit for seven months. Seven!
Can you sit still that long if necessary?
May I recommend getting a nice comfy, padded chair?
