I know that usually what I write is rather bearish and sort of pessimistic. There is a natural tendency to become married to a view of the market, and changing from that view tends to be difficult. In fact, usually at the point someone is most bearish and most convinced that the market is going down is the place where it reverses.
Knowing this, it is important not to become married to either a bullish or bearish perspective. To me, the key to the switch is incoming data. Let the data tell you when trends are broken and your logical thesis no longer applies. But one piece of data that is counter to the thesis surely doesn't invalidate it.
Right now, my thesis is one of a deflationary environment. Should there begin to be an increase in prices, or other metric which I have determined would prove counter to the trends that make up the thesis, then it is important to recognize that my thesis is busted and start to evaluate another thesis.
After all, there is no heroism in being wrong all the way up until you are right.
Knowing this, it is important not to become married to either a bullish or bearish perspective. To me, the key to the switch is incoming data. Let the data tell you when trends are broken and your logical thesis no longer applies. But one piece of data that is counter to the thesis surely doesn't invalidate it.
Right now, my thesis is one of a deflationary environment. Should there begin to be an increase in prices, or other metric which I have determined would prove counter to the trends that make up the thesis, then it is important to recognize that my thesis is busted and start to evaluate another thesis.
After all, there is no heroism in being wrong all the way up until you are right.
