QLD I had a gain of 11% when closed out. QID at this time is a small loss because of a strong day Monday. If the market continues up a new buy signal will get us back to long. Let's wait and see.
WHY THE MARKET IS WRONG by Carl Swelin
In my business I am exposed to the writings of a lot of really smart people, and it is never hard to find a few who are trying to explain to us why the market is wrong. The market is wrong, of course, because it has blithely gone its merry way without any regard for the brilliant analysis, presented by the writers -- analysis that explains with exquisite detail and flawless logic why the market should be doing the exact opposite of what it is doing.
Fundamental analysts are most prone to this kind of error -- writing reams of research, and then, by god, sticking to their guns as the market in turn puts them and their investors through a meat grinder. Most are trapped in a system where they are required to justify their actions with a good fundamental story, which is why, for example, Calpers (the State of California retirement system) was down 25% in 2009.However, there are plenty of technicians who fall into the same trap when they start using indicators and oscillators as a crystal ball. This approach usually doesn't work any better than the fundamental crystal ball. You are basically left with a bunch of ambiguous technicals as a basis for making your next "call."
Rather than explaining why the market is wrong, we should be asking, "What is the market doing?", and acting appropriately. I am, of course, talking about a trend-following discipline. This approach is never perfect, but it is always rational because we respond to what prices are actually doing, not what we think they ought to be doing.
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