Barbara, It's Time to Buy

I have my bearish opinions but our point is to make money.

The most bullish thing a market can do is go up contrary to expectation. The drop in November paved the way for a stunning rise in the market today. These rises are likely to continue. Logic and reason do not matter The character of the market has changed.

One of the lessons I learned from trader Gary Smith is that you have to respond to market action. Today, the market gapped up and never looked back. It had the look and feel of a breakaway gap. That just means that the market may not return to yesterday's close of 1180. There was extreme enthusiasm as reflected in the Trin reading. The Trin measures the flow of money into securities. The close today was 0.29. I cannot recall a closing Trin reading that low before. Normally, that would spell a drop in the market but it is more likely a sign of rampant bullishness. Also, many traders and investors had to turn tail when the market failed to drop below 1173. (For those readers in the know, I am tipping my hat to the Busted Chart Pattern.)

Our strategy is to be 100% in the C Fund when the market is going up. The market is going up.

Barbara will be receiving her e-mail from me tomorrow.

To quote Smith about his market experience in January 1999, "I was very bearish because of my perceptual filters. The Investors Intelligence reading of bullish advisors went above 60 percent, a level not seen since before the great crash in October 1987... It's a good thing I'm not one for trading my opinions, but, instead let the market tell me what to do." How I Trade for a Living by Gary Smith, page 134.

It is a good time to buy.

Wink

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