Registered: Oct 2010
04-19-12 06:27 PM
Quote from blowingup2012:
Thats easy to explain. By historical standards we are still way over-valued.
Yet we have another poster here accusing me of being yet another alias. First it was NODOJI and then EMG. I have lost track of all the users you think I am. You are all living in one big delusion.
Trying to apply a specific value to the market from which it must regress to the mean is a sure way to lose money.
While I agree with the general thesis behind the saying "History doesn't repeat, but it rhymes", trying to tie that general thesis to specific actions is almost always going to end in tears. The history of the markets is littered with countless examples of this.
Much better to build a quantitative and objective model of the market and wait for the data to tell you when a real turn is likely to be in effect. Even then, your conclusion will still be subject to the fact that we can only deal in probabilities when it comes to markets.
The evidence that we have so far, i.e. the data on prices since the market's most recent price high, is too slender a reed to make it bear the conclusions you want to draw. These kinds of turns take time to play out.
I'm actually trying to help you become a better trader by telling you this, so, don't shoot the messenger.