| Is there any way you can remain completely safe | | | | mid-August and we are at the same levels on the |
| from taking losses in the market? No, but you can sure | | | | averages we had when we started. What was the |
| pare down the odds and make it a lot more in your | | | | trend? See, there really was no "overall market trend". |
| favor. Likewise, it's foolish to think you cannot make | | | | We were basically directionless and getting tossed |
| money in literally any market environment. If you look | | | | around on news, hopes, fears, anticipation etc. Yet |
| for leadership, good chart patterns and time your | | | | during those periods of upswings and downswings, |
| entries well, even in a raging bear market you can still | | | | there were "mini" trends forming.It's those mini trends |
| go long with success.Obviously that is "fighting the | | | | that produce profit or losses for you the investor or |
| tape" right? Absolutely. It would be more profitable to | | | | the short term trader. Get on the wrong side of that |
| be short during a down market time frame and easier | | | | mini trend when the market is falling and you will be |
| to do too. We have many readers that simply won't | | | | trapped in losing positions that could get really costly. |
| go short or buy "put" options. So we try to show that if | | | | Likewise going short when the mini trend is "up" can |
| you are careful and do your homework, you can go | | | | add some gray hair to your head quickly. So naturally, |
| long in a bear market. But fighting the tape is the | | | | correctly identifying the mini trend is the first step in |
| wrong way to go. So, for the first installment of our | | | | playing safely. If the trend over the short term has |
| mini series, let's look at the tape, and where it comes | | | | every appearance of being "down" then you don't |
| from.First we have to be aware of the overall market | | | | want to be loading your boat with longs. Sure you can |
| "trend" and we want to take a moment to clear up | | | | still pick off the leaders and the breakouts, but you will |
| just what a trend really is. Remember a few up days | | | | have to be very fast and very stock specific. None of |
| is not a bull market any more than a few down days | | | | this "buy em all up" mentality.On the other hand if the |
| signals a crash. Markets go up, markets go down. Our | | | | mini trend is up, you don't want to be holding a ton of |
| main priority is to try and figure out which way they | | | | shorts, or missing the boat by only having one stock in |
| are going for the longer term, not just tomorrow. There | | | | your basket. Both are costly mistakes. So again, job |
| is an "overall trend" like the downward one we have | | | | one in playing safe, is always going to be to try and |
| seen in the NASDAQ for over a year, and then inside | | | | place yourself on the correct side of the tape. Long in |
| that overall trend there are smaller "mini" trends. For | | | | a bull mini trend, short in a bear mini trend. Remember |
| instance, the lows hit on April 4th, 2001 to about June | | | | the old adage, "only salmon swim upstream, but then |
| 5th, 2001 were a "mini" uptrend. The NADAQ gained | | | | they die". Likewise fighting against the tape is a tough |
| something like 40%.Let's suppose we are looking at a | | | | way to go. So how do we find and identify these little |
| scenario like this: We are in warnings season and the | | | | trends? Well certainly our job is to try and weed them |
| market is really nasty. Volatility reigns, and we are | | | | out for you, but you too should be doing your own |
| trading sideways to down. Then finally the warnings | | | | homework. What we use is support/ resistance lines, |
| start drying up, and they focus more on perceived | | | | overall "mood" of the market, and significant changes |
| "good news" and the market starts moving up again, | | | | such as rate cuts, earnings seasons, etc., all of them |
| into the actual earnings season. Then after earnings | | | | lead towards the formation of mini trends. |
| the market settles back and drifts lower. Now, its | | | | |