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  #61  
Old 07-25-2017, 10:53 AM
Latitude30 Latitude30 is offline
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Originally Posted by Beach Bum View Post
Market keeps going up and up and up. Why pull out now? Zero volatility, zero worries, booming equities. We're living rich kids. Time to buy another house or car or maybe even a boat.
The key for starters is to closely monitor the longer duration moving averages of the indices as these will roll over with 100% certainty if the tides turn in a meaningfully bearish direction, for any surprise pullback that does not cause this to happen will either be too shortlasting and/or too shallow a pullback to be a longterm worry for almost all longterm investors.

To date, all the cases of bear markets that took years or longer to recover lost by far most their gains AFTER the longterm moving average trend lines already morphed from upward sloping to downward sloping trend lines. The only reason there's still profit potential and continues to be by following this rule is that most humans are clouded by emotions and have difficulty sticking the rules out when they get too caught up in the day to day price fluctuations...or a built up belief in what SHOULD happen without keeping mind flexibly open to changes in expectations.

Emotions are a human weakness that encompasses even the most intelligent experts in the market. I found a trick to overcome this imagine your true portfolio balance is about 10% less than it actually is. Because roughly that's the amount you might have to part with at any given time in order to mitigate the probability of bigger declines by acting too emotionally. You have to be willing to part with losses at given times in order to increase probability of capturing gains.

Last edited by Latitude30; 07-25-2017 at 11:10 AM..
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  #62  
Old 07-25-2017, 11:03 AM
d123454321 d123454321 is offline
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The Russell 2K small cap index just broke out to new highs last week after being flat for most of the year. It seems like this market can run a lot. I moved 401k entirely to small caps a few months ago in anticipation.

After a nice run..with the VIX so low, a scary correction may be in order later this year.

With yield curve being relatively steep a full fledged bear market seems unlikely until very long term.
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  #63  
Old 07-25-2017, 11:05 AM
d123454321 d123454321 is offline
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Originally Posted by Latitude30 View Post
The key for starters is to closely monitor the longer duration moving averages of the indices as these will roll over with 100% certainty if the tides turn in a meaningfully bearish direction, for any surprise pullback that does not cause this to happen will either be too shortlasting and/or too shallow a pullback to be a longterm worry for almost all longterm investors.

To date, all the cases of bear markets that took years or longer to recover lost by far most their gains AFTER the longterm moving average trend lines already morphed from upward sloping to downward sloping trend lines. The only reason there's still profit potential and continues to be by following this rule is that most humans are clouded by emotions and have difficulty sticking the rules out when they get too caught up in the day to day price fluctuations. Emotions are a human weakness that encompasses even the most intelligent experts in the market.
Spot on. Sounds like you have watched the Ciovacco Capital market videos...have you? He always talks about the slope of MA's and not getting caught in noise.
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  #64  
Old 07-25-2017, 11:12 AM
Latitude30 Latitude30 is offline
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Spot on. Sounds like you have watched the Ciovacco Capital market videos...have you? He always talks about the slope of MA's and not getting caught in noise.
Correct
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