rtharp, could you elaborate on your statement: "It's what the minority are doing is what the market will flow to. If everyone is short than we will go higher. If the majority of the public is long we will go lower. "
Think about it. If the majority of investors are all long who is left to buy? Think back to 99. I've been trading for a few years but used to have to hear advise from a waiter or a personal trainer at my gym --as they were "experts". Yeah right don't confuse genius with a bull market. The majority of the public was in the market. That was a top. Now look around a lot of the public is out of the market and a lot of the major players are short. When the majority are out then we have hit bottom. The market is driven by supply and demand, or maybe another way to say it is greed and fear. When everyone is fearfull than we will finally hit bottom as everything will be so undervalued. That will be a bottom. One thing a lot of traders do is search for a magic indicator. There isn't one as the markets are always evolving. I used to constantly trade one system such as breakouts for a few years till 99. There are a ton of traders who still follow William O'Neil's CANSLIM which doesn't do so well with this market. Other traders , such as myself are now doing really well with overbought/oversold setups. This is due to a this system works well in nontrending markets. When the markets start to really trend it won't be that great. A lot of traders will start to trade the system as they see it making money. When too many are using the system it will no longer work as there won't be much of another side. The system will fail traders/investors will scrap the system and another "holy grail" system will be the new thing. It has nothing to do with predicting to make money trading. It's about being willing to be wrong a small amount while making a large amount when you are right. Think about the 80/20 rule in life. It goes in trading also. 80% of traders lose but 10% do rather well and 10% do ok. That 20% though consistently make money over and over again. It is due to them being on the right side of the market at the right time and when they aren't they cut their losses. rtharp