Registered: Mar 2012
Posts: 705

Because trading is a game, and each movement of the market has three different stages... This is how I have always understood the trading cycle anyway.

Stage 1 - Accumulation. After a rise in a uptrend the market is allowed to settle down for a while. Professionals and big players in the market start accumulating into the dip and place icebergs under the market also to defend their position and absorb selling preventing a technical breakdown.

Stage 2 - The move starts to be bid up and once it gets under way it attracts buyers who notice the move up in price. Trend traders and chasers start to move in and the euphoria starts to build.

Stage 3 - Professionals following strict rules lock in profits holding the market back as the last fools jump in... Then the last fools panic out as the cycle starts over with Stage 1.


So, where do you want to get into the market? At a bottom, during the trend, or at the top? Think about it.


Note: The bottom indicator I don't use anymore. It's just for visual purposes.

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Registered: Mar 2012
Posts: 705

This chart is kind of just meant to be funny... But the same three stages occur on every timeframe...

It's slightly more complicated because there are also shorts. The exact same three stages also occur in reverse for the same movements....


I once read this one quote... "There is nothing new on Wall Street, there cannot be... Because speculation is as old as the hills. What happened before will happen again."


Don't hate the game. ;)


Too many people around here just "don't get it"... Stop watching the news and logicalizing the market... It's just market cycles... Which in recent years have been heavily fed driven.

I WANT QE3... Would be nice to have another long calm bull market run! Sigh... I don't get why people don't like the nice calm low volatility markets that occur during an easing program! They are a cakewalk to trade...

I was kinda surprised the market managed to recover fully from a 300 range break last year without a QE program... Twist did quite a good job of keeping people happy until the market slowed down against resistance. People need to see price keep moving up steadily to keep their emotions reinforced... If price isn't rising for a while people spook easy.

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Registered: Sep 2011
Posts: 20

So, where do you want to get into the market? At a bottom, during the trend, or at the top? Think about it.


What tells you it's the bottom?

What tells you it's the top?

Does anyone know this? No, they can guess, but will only know later, Oh that was the bottom, that was the top.

1. Can you tell when there is a trend? Yes!

2. Can you tell where price should go if the trend is still trending? Yes!

3. Can you tell where price will hang out if the trend is consolidating? Yes!

4. Can you tell where price will go if the trend is not trending any more? Yes!

So what is the way to trade that makes most sense? Getting in "during the trend"!

Think about it.

Registered: Sep 2008
Posts: 2636

Can you identify those phases in real time?

Registered: Sep 2011
Posts: 1541

I'm too small to have an iceberg, so I try to catch the launch.

Registered: Mar 2012
Posts: 705

You could go try to run some stocks... But generally all the good active small ones already have a bunch of people in there running them and shifting the patterns.

It's best to keep a light hand in the markets and not alter their flow... Cramer use to manipulate the futures around by upto 10 handles overnight in an attempt to shift the markets mood the next day...

As far as I know he lost money doing that...

One of his main focuses was on manipulating the key stocks that news was being released on.

By dedicating a lot of capital to shifting the patterns in those stocks with current earnings releases he could create a market wide emotional shift and protect his positions and alter his hedge fund results into the end of the month.


If he wanted a market drop he would make sure to keep the stocks down that news was being released on by selling shares rapidly on the release and possibly also short selling to ensure the proper reaction.

If he wanted the markets to rise he would hit the bid like crazy on the news release to ensure the proper reaction to the event.


You have to be a massive hedge fund to be able to pull shenanigans like that, and it's not exactly legal either...


There are very big players in the market that don't need to predict tops/bottoms in stocks... They can just decide them. However, they generally make sure not to go against the natural flow or that loses them money... Cramers strategies were questionable...

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