IBD managed mutual fund index topping

In Sunsetter Sam Hill's view the IBD managed top mutual fund index has run out of target room and more likely to decline than rise at this point. This he says is true no matter what eventually happens. Anything new in the mix can change anything else in the target range. Still, longer term everything rises because all money has to get out of dollars eventually and this forces up the price of stocks. Dollar declining in value since FDR as his political economic philosophy found inflating the dollar meant inflating the markets fleeing the dollar. 

a managed index chart shows the best pix forward

If you want a picture of where the market is going just check the Investor's Business Daily mutual fund index chart of the largest funds. This is better than most indices that include everything willy nilly, because the mutual fund index is a managed index of the best charts thought to be rising right now. The current chart shows a break in the uptrend setting up a decline when the recent series of highs were each lower than the one previous. This gave a sell signal ten days ago.

resting your money

Sometimes you just have to rest the money and it is worth it just for that reason alone. Of course, if someone does not know the risks in markets, especially today it seems, then they might not want to do any resting, which could increase their rewards as well as their risks. One can envision doing well for a long time only to lose it all in an instant, like going over a cliff. When a fed chairman keeps reminding us of a financial cliff in the fall, this should really whisper in the ear. Never argue with the fed is an old adage for a reason.

proportion may be the one weakness of charts

View several different charts and notice how the proportion can color your impressions.

Reminder: Posts here are often all continually edited, growing changing, being replaced and disappearing.

Stock chart patterns: sometimes rules can trip you up

I was tripped up by a loss limit rule I follow recently when I should have emphasized the chart pattern over the rule. The chart pattern should stand in front of all other rules and in my experience the pattern has been the direction to follow. I found out the reasons later, There is always someone somewhere somehow who knows more than I do sooner.

time is fooling us all, like all illusions

Cleaned up summary of a conversation with Sam Hill who looks at the charts for us since he seems to have the most confidence in his own views. Tea leaves! The charts are tea leaves I tell you. There is no Holy Grail. Gold has stopped going down did I hear you say? It may have stopped going down but so has the dollar, so nothing is official yet. Dollar was up yesterday. When it has clearly stopped going down it will be too late, so give us the heads up and wallets out scenario. Money talks.  Listen to your money. I am usually bullish before my money is bullish. So tell us what you have at risk then? Only 16% in the frying pan right now but strongly thinking of rising it to 50% and then, at my age, walking away. Sounds like a system. Are you going to tell us about it?

the thrillions of the fourth comma in trillions

Oct 25th (click chart to enlarge)

No one knows the price of anything, which is the reason prices fluctuate.Value does not fluctuate, but we do not go by value of stock prices when evaluating prices. Rather, we go by the value of money. If money is inflated then it must be stablized in a medium like the stock market to maintain its' value as a medium of exchange. So as prices go up it is also significantly reflecting the loss of value as money, according to the inflation rate of the stimulus money. When the musical chairs might stop any minute, then is when holding to the perception of the emperor's new clothes becomes more difficult to maintain.

At the moment the dollar is declining mostly because the price has advanced to a point where it is prudent to balance the equity/cash ratio of speculators. In other words the price is going down because the price has gone up enough to tip the majority of position holders risk/reward ratio to take profits. Speculators are weak hands traders who provide long term investors the ability to buy or sell at any time, no matter what the risk reward ratio may be. This all that liquidity means. Without liquidity there would be no chance for investors to do anything when they wanted to buy or sell.

don't let the gold bugs bite

Failure of the Facebook IPO confirms a change in the mood of  the market. In an uncertain market FB will have to have stellar results, not just prospects. Yesterday's session saw favorable housing data trumped by EU breakup fears. Recent events, by all appearances, marks the end of dot.com social networking expansion for this mania moment. Cash is flooding the dollar and after that it will be soon time for gold bugs to bite.

buying stories you are sold or buying shares you bought

Price is everything. Everything is not the only thing but prices are everything and the only story. For politicians words are friends and numbers are enemies. For speculators risking their own money, numbers are friends and words are enemies. Why? Well the truth cannot be told by those who know. Why? Because the ability to predict the future is a fundamental component in measuring intelligence. Why? Because why that's why, because asking why is, as in logic, a fallacy begging the answer.

charts tell the truth

Assumption here is that all stock watch lists should be in the format of charts and that future prices can be predicted from the patterns prices leave behind. As Danny used to say, I follow the footprints of prices in the snow.