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Monthly Archives: November 2008

The Curse of Preconceived Notions

November 2, 2008
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Here’s another question I received recently. Again, feel free send us any questions you have and keep checking back to see them get answered. Question: Given your trend-following indicators, you’re not likely to get a buy signal for a few weeks after the bottom.  But considering the horrible news, the rally is likely to top around then!  How will you prevent your indicators from giving a buy signal at the top of a rally? Answer: Whoa!  This is what I call the curse of preconceived notions.  First, no one knows whether the next rally will be a bear market...

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Has the Market Re-tested its Lows?

November 1, 2008
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Here’s another question I received recently. Again, feel free send us any questions you have and keep checking back to see them get answered. Question: You’ve been looking for a re-test of the market’s lows.  Does last week’s decline, followed by this Tuesday’s 889-point Dow upmove, qualify? Answer: Historically, every major market bottom has a re-test–that is, the Dow hits a low, rallies for a couple of weeks, and then falls back down to test the level of the initial low.  If the low holds, then there’s a chance the market will see a big rally … sometimes a...

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