The Platform Or The Train?
As expected, the
Naz continues to march to the
beat of its own drummer, little concerned with electoral developments.
I’m watching Cisco’s
(
CSCO |
Quote |
Chart |
News |
PowerRating)
attempt at holding 45, which it held on a closing basis and on volume.
Not because many consider Cisco to be
this market’s ultimate bell, but because it is one of the only bells that has
gone flat over the past few weeks as opposed to the down tilt of the Comp.
Glue
(
GLW |
Quote |
Chart |
News |
PowerRating) is another.
Of any other bell, Nokia
(
NOK |
Quote |
Chart |
News |
PowerRating) has
shown the best tape — by factors — over the past several weeks.
This is the type of action you should
be on the lookout for among the besmirched glamours.
Maybe none are tradable at this
juncture from a medium-term, long-side standpoint.
But understanding which are beginning
to emerge from the pack will no doubt give you increased confidence when the
next bull market launches.
In particular, this applies to newer,
less-experienced traders.
Do not do what I did in ’90.
Then, after moving to cash in July, I
walked away from my monitoring and research for weeks on end while the bear
raged.
As a result, I missed some entry
points that autumn.
Fast forward to ’94, when everything
in the growth sector broke down in tandem with a spring top.
It was the first time I had spent a
substantial period in a 100% cash position since ’90.
I spent that spring and summer
studying everything that was applicable to bottoms in the prior four-year
period.
Beyond re-reading some of my favorite
market books, above all else this meant poring over thousands of charts,
analyzing how every single leader from the previous four years bottomed.
The homework was well worth the
effort, for when the setups finally arrived in ’95, I was there.
Not only was I there, but I was there
with added confidence above and beyond what I had prior to that point.
Your goal at this time is to be able
to “see” bottoms being formed in one stock after another.
One day at a time, one bar at a time.
Of course, since bottoms are known
only in hindsight, you will not know until well after the fact whether a stock
has indeed troughed.
No matter.
Your reward for this exercise will be
increased confidence, enabling you to eventually pull the trigger when you
should, be it in the next bull market or the one thereafter.
This, instead of watching the new
leaders pull away from the station, leaving you on the platform because you were
still frozen from the last bear market.
Greater confidence = a greater
likelihood you will be on that train.
Education = greater confidence.
Period.
There is no other way to go about it.
The platform or the train?