With the T2108 down to 6%, we are in severe oversold territory. We had 7 new highs and 1080 new lows in my universe of 4,000 stocks on Tuesday. While the T2108 got down to 1.2% in the October 9th decline in 2008, the T2108 often bottoms out somewhere below 10%. I remain in cash and short. With the major trends being down, a counter-trend rally could give an opportunity to increase my short positions.
Like an earlier writer, I also detect a hint that the blog is becoming “predictive” in that an advance from here is being seen as an opportunity to make countertrend shorts. While I agree that one cannot see the basis for a sustained uptrend from here, thw blog’s strength is is disciplined trend following. Shorting into a rally is a legitimate strategy, but is it consistent with the techniques you espouse?
I also try to share with my readers what I am planning to do. It is not meant to be advice or a prediction, but an attempt to let others learn from the actions I am taking. When I moved to cash months ago, I merely reported it to others, not telling them what they should do. You are correct that I first read the trend, but then I have to make trading decisions. Let’s hear from others. Do you just want me to report my take on the current trend and nothing about what I am doing?
It think it’s important that you are telling us what you are doing.
You site shows the trend, and you interpret certain base line settings. For example, (I’m paraphrasing: “…the Worden T2108 is at x%–which is overbought. A correction is imminent…”
I don’t know, maybe you could add a small box which shows what your current position is: cash; buying QLD; or buying x and selling covered calls on it (and maybe how it’s performing).
I also like to hear about what you’re doing. Thanks for keeping this blog going for all this time! I still read it 2 and a half years after taking your course. Your class was one of the most interesting classes I took at Maryland and I even managed to not lose any money in my (small) roth IRA during this downtown by using the principles I learned in your class. Thanks again.
Shawn M (HONR269Q, Fall 2006)
Please don’t change!!! I find all the info, including what you are planning on doing, to be extremely useful. I very much appreciate the effort you put into this service. Thanks very much.
My wish is that someday, i can be as successful trading the trends as you have been.
Eric Wish is doing the write thing; it is an educational source. Besides us “readers”, Wish is also concurrently educating his students at the University MD, who come visit this blog, and they need the details. On the other hand, I wish that Dr. Wish would state his positions and when he bought them: instead of simply saying, “I hold some shares” he could say “I hold 500 shares of TSYS”, or “Today I bought shares of TSYS”, “Today I sold my shares of TSYS” etc, with the caviat that he is not telling people to buy/sell these shares. He would be more believable.
oops…He is doing the RIGHT thing….
Yes, Dr. Wish, your short positions are in what stocks?
I, along with your other readers, find both your analysis of the market and your current market activities to be very helpful. What I especially look for is an understanding of why you are doing what you do and how it is an outgrowth of the discipline you employ. Hence my question on your proposed strategy of shorting the rally which may have begun today. If you mean that you plan to short a future rally because you believe that it will break down but only when or if the trend turns or stays negative, then I understand your position. If you intend to short it now, I would appreciate it if you would address, at some point, what to consider when shorting a bounce off a major low where there is a possibility of substantial short covering.
DrWish, plz tell us what stocks you are shorting, and how you picked them among all others. Plz be more specific and not nebulous.
I have been short ARE and AXYS. To see why, check out a weekly chart with the 10 and 30 week averages. I use TC2007 to scan the market for patterns like this. I buy put options to go short in my IRA. Options are risky, however, if you do not understand them.
Dr Wish, the problem with telling people your position in too much of a detail is that they start to rely on you entirely for decision making instead of using their own minds and hearts. They don’t take as much responsibility for their own results.
But on a more selfish level, the more you make your positions known to the very penny, you subconsciously want the trade to work instead of being cold blooded with losses and taking them, or riding a winner too long because you’re getting praise from others.
I would keep informing and educating as you have in the past, and not get pulled into posting up your P/L. In fact, people can pay you to manage money or a paid service to get such details. If people pay for it, then they won’t waste as much of your time making useless commentaries.