It's war

Trading this market is like being in a war. This monster is brutal. Everyday we're taking enemy fire, you try to hold your ground, then have to decide whether to retreat or not. How about today - Dow +889, NYSE +536, SPX +91. Who can explain this? Technical analysis. Is the answer in the charts and those multitude of indicators? Hardly. Sorry John Murphy. If you haven't figured it out yet, technical analysis is a joke, a crutch, something that is utterly useless. Even though I know this, I still use it occasionally. Why - who the hell knows. I guess you've got to "believe" (sort of, kind of) in something. Even magic.

But when it comes to trading, especially sort term moves, I don't look at any indicators. Just the price. It's the action of the tape that I care about. That's it. You have to really watch it carefully - the ebbs and flows to get it right. That's all I care about really and strong money management techniques. That's what you have to have in this dreadful market that has claimed so many - good money management techniques. One, don't take mega sized positions relative to your account. Two, get out of or systematically cut back on your losers, and wait for better opportunities. Three, the winners take care of themselves. That's all there is to surviving, but for some reason many people can't do it. They can't take those loses.....the pain is too great. But that's how it has to be.

When does today's huge snap back action mean? I haven't the slightest idea and i don't think anyone else does either. I'm putting my money on vicious bull rally in a bear market. I won't get any where near a bullish stance until Dow Theory gives a clear cut bull signal. Let me say this - those Dow Theory signals given in 2007 were fantastic and on target..... From here on out, I will never, take those signals lightly. Instead my portfolio will be structured around those bull bear signals so as to avoid this from happening again. I would have liked nothing better than to be sitting in 70% cash and watching this debacle from the sidelines. But I guess I was too smart to listen to the market and Dow Theory, I decided to do it my way. Next time I'll do it the smart way. I believe that you don't learn how to make money in the markets until you've experienced both extremes a few times anyway,. I also think that it takes about 2 decades to develop the proper skill set to do this for a living. That includes enduring two decades of hell as well. Many can't take it and quit after the first few rough patches. I know a bunch of clowns that wanted to be traders. After getting whacked for their first 5 figure lose, they couldn't take it anymore. Eventually they gave up. -

Bottom line - do it the easy way. Get an MBA from a top school and get in with the investment banks, hedge funds and other highly leveraged players who make outrageous bets with OPM. Then at the end of the year you'll end up w/ a huge bonus. If things don't work out, at least it isn't your money, its some other saps that believed your firm knew what they were doing. Oh yeah, the investment banking industry doesn't exist anymore. Think about another career - this one is a lot harder than it looks. Trust me.