Market observations and actions

[Market_Observer]

Just a nonsense.....!

I try to be open-minded. If something I wrote is nonsense, I would like to know why is it nonsense.

When I observe the market, I try to make it an objective exercise using indicators that are objective and easy to interpret. Moving averages fit the bill.

Moving averages look only at the past and do not look forward. This is objective.

With one look, one can see whether the price is above or below the moving average. This is easy to interpret.

As to what moving average to choose, it is more subjective. An example of why some moving averages are significant when violated. S&P500 rebounded off 50-day moving average 7 times this year. In this context, 50-day would be a good choice for S&P500 because if this defence line is violated next time, that is a notable bearish event.

 

[themickey]

Ask yourself, does a moving average of price (an average of historical price of a narrow sector), does it meet logic that this is going to indicate what the future will bring?

Does this magic indicator tell of seasonality?
Does it tell of politics and finance climate?
Does it tell of immediate price action?
Does it tell you how much % of stocks are above/below the MA?
Does it show anything about emerging markets or bonds?

You do realize, the majority lose, the majority are wrong often, the majority are lemmings who follow other lemmings, the majority use simplistic methods to trade which includes the simple moving average?

 

[Overnight]

Ask yourself, does a moving average of price (an average of historical price of a narrow sector), does it meet logic that this is going to indicate what the future will bring?

Does this magic indicator tell of seasonality?
Does it tell of politics and finance climate?
Does it tell of immediate price action?
Does it tell you how much % of stocks are above/below the MA?
Does it show anything about emerging markets or bonds?

You do realize, the majority lose, the majority are wrong often, the majority are lemmings who follow other lemmings, the majority use simplistic methods to trade which includes the simple moving average?

So you are saying that TA can be affected by FA? Many folks here would consider you a heathen for suggesting it! Welp, sign me up for your crazy house!

 

[deaddog]

Ask yourself, does a moving average of price (an average of historical price of a narrow sector), does it meet logic that this is going to indicate what the future will bring?

Hey Mic; Sort your portfolio into stocks trading above and below the 150 moving average. See which group does better in the next few months.

 

[themickey]

Hey Mic; Sort your portfolio into stocks trading above and below the 150 moving average. See which group does better in the next few months.

You're getting off the beaten track, distracting as usual.
Where is the logic of what the market is doing right here and now, with what price was doing 4 weeks ago and 10 weeks ago?

 

[themickey]

Hey Mic; Sort your portfolio into stocks trading above and below the 150 moving average. See which group does better in the next few months.

More of the same usual bs!
I could perchance grab some penny stocks which have been dead which fly to the moon and leave everything in the dust.
Think logically if capable! Sheesh
Not surprised traders here spend years asking questions and get nowhere.

 

[deaddog]

I could perchance grab some penny stocks which have been dead which fly to the moon and leave everything in the dust.

LOL
That kind of thinking is exactly why some traders here spend years asking questions and get nowhere.

 

[themickey]

LOL
That kind of thinking is exactly why some traders here spend years asking questions and get nowhere.

There is a contradiction within trading and it goes a little like this;
"You can't contain markets with fixed rules, but one can't trade without fixed rules."
So the markets know no boundaries with what they'll get up to next, but the trader must remain disciplined at all times.

So back to my bugbear topic, averages might indicate something to the technician, but the markets are not constrained by them. Whether they work or not is a coin flip, if they occur more than once, it's only because the markets are trending and that has to do with luck. Next year the markets may not trend, next year the market may nose dive, next year may be a year many people go broke, next year might be the year the majority say "not only am I broke, but I can make no sense out of trading".

 

[themickey]

It was mentioned in last week's market observation that if S&P500 moves up convincingly overcoming the 21-day and 50-day moving average resistance, it is a bullish sign. This bullish signal appeared this week. With the U.S stock market resuming its bullishness, it become safer to invest in Asian markets, given the strong influence of U.S markets on overseas markets.

Hmmm, I'm back again (dunno why )
My call, the markets are not bullish, neither bearish but I reckon this week will see the brakes come on and head downward moreso than up.
Gold & silver will prolly rise, copper hohum along with most else, Energy prolly continue rising.
The way I'm playing it, I have lots of stock exposure atm, not buying, not selling, just sitting but I have several limit orders sitting with prices back a way bit, they'll only get hit on a good pullback.

 

[deaddog]

There is a contradiction within trading and it goes a little like this;
"You can't contain markets with fixed rules, but one can't trade without fixed rules."
So the markets know no boundaries with what they'll get up to next, but the trader must remain disciplined at all times.

I agree!
The market will do what the market will do. The only thing we can control is what we do.

So back to my bugbear topic, averages might indicate something to the technician, but the markets are not constrained by them. Whether they work or not is a coin flip, if they occur more than once, it's only because the markets are trending and that has to do with luck.

Again I agree. The averages move because price moves not the other way around. However for the trader it doesn't have to be a coin flip. It's not a win or lose it all proposition. The trader can call the bet off any time. The trader has some control over how much they lose, the market has no control over when the trader exits.

Next year the markets may not trend, next year the market may nose dive, next year may be a year many people go broke, next year might be the year the majority say "not only am I broke, but I can make no sense out of trading".

The only way a trader can go broke is if they lets their losses get away from them.

At risk of giving away the Holy Grail, if you don't hold any stocks in your portfolio that are trading below say the 50ma you'll never go broke.