I encourage you to read Jeff Saut's column for the week. Like us, he believe's patience will not only be rewarded, but may save you a lot of pain and agony down the road.
In this week's comments, Sait quotes Gary Bielfeldt痴 analogy between trading and poker. Bielfeldt said;
的f you apply the same principles of poker strategy to trading, it increases your odds of winning significantly. I have always tried to keep the concept of patience in mind by waiting for the right trade, just like you wait for the percentage hand in poker."
He also quoted Laszlo Birinyi and Dr. Robert McHugh.
Birinyi said;
的t is very odd not to have had a 1% down day in any of the U.S. large cap indexes for so many months.�
Dr. McHugh;
"The rally since July has been almost entirely short-covering. We get one big move, about once a week, on buying panic, then no follow-up. . . . Get this: All of the progress of this three month summer/autumn rally, all of it, occurred in only 9 days of trading, and all but one of the nine was a short-covering rally. . . . Other than those 9 trading days out of 63 since July 14th, the other 54 days of trading produced only 4% of the upside progress, and zero since July 19th. ZERO . . .!"
Saut went on to say;
"Almost on cue those 杜ysterious buyers� showed-up early last week, at 6:30 p.m., to be specific, and drove the S&P 500 emini-futures contract from 1375 to 1397 in only two minutes."
"While we have no idea who those mysterious buyers have been, the October 13th edition of the Wall Street Journal had an article titled 撤aulson Pulls for U.S. Markets,� which implies it just may be the Plunge Protection Team (PPT) . . . aka the President痴 Working Group on Financial Markets that was created in 1988 by President Reagan under Executive Order 12631. Whoever those buyers are, there has been an unnatural 澱id� to the equity markets ever since Goldman Sachs� (GS/$188.67) unexpectedly re-weighted its much institutionally indexed commodity index in late July, dropping the gasoline weighting from 7.3% to 2.5% in staged increments right into November. We have repeatedly argued THAT has been the major reason for the DJIA痴 explosive rally, for obvious reasons, and the 87.8% correlation between the two (the decline in gasoline and concurrent rise in the DJIA) implies the same correlation."
Maybe the country club elitist are at work in the markets!
