More from Al's Book..
"Incidentally, although pundits had been attributing the 2008 crash to the housing bubble and credit crisis, the housing market began it's crash almost 3 yrs earlier and the credit crisis had been simmering for the past couple of years. What did happen was that the real world realized that Obama would become president and that he would increase business regulations and increase the cost of labor, both of which would reduce corporate profitability. When companies earn less, their stock is worth less."
"All of the pundits seems to be saying on CNBC that the bottom is in and we are on the way to new highs, but the PA seems to be saying otherwise. Any time the market is going up they round up the bulls proclaming evidence of the next great bull run and every time is drops a couple of % they round up the bears who claim we are heading into depression. You should look at them with amusement as you don't trade their timeframe, and the predictions have nothing to do with your income (and nothing to do with what the PA is telling you)"
Major Reversals - "Major reversals reverse a trend that has been in effect for days or weeks. The best trend reversal entries have a break of a significant TL before the set-up, because you do not want to to enter counter-trend until you know the counter-trend traders have already shown some ability to control the market. Enter on a pullback that tests the trend's extreme. The pullback can undershoot (a lower high in a new bear or a higher low in a new bull) or it can overshoot (a higher high in a new bear or a lower low in a new bull) the old trend extreme, but if an overshoot goes much beyond a trend's extreme then the trend has resumed and you should wait for a new trendline break"
"Incidentally, although pundits had been attributing the 2008 crash to the housing bubble and credit crisis, the housing market began it's crash almost 3 yrs earlier and the credit crisis had been simmering for the past couple of years. What did happen was that the real world realized that Obama would become president and that he would increase business regulations and increase the cost of labor, both of which would reduce corporate profitability. When companies earn less, their stock is worth less."
"All of the pundits seems to be saying on CNBC that the bottom is in and we are on the way to new highs, but the PA seems to be saying otherwise. Any time the market is going up they round up the bulls proclaming evidence of the next great bull run and every time is drops a couple of % they round up the bears who claim we are heading into depression. You should look at them with amusement as you don't trade their timeframe, and the predictions have nothing to do with your income (and nothing to do with what the PA is telling you)"
Major Reversals - "Major reversals reverse a trend that has been in effect for days or weeks. The best trend reversal entries have a break of a significant TL before the set-up, because you do not want to to enter counter-trend until you know the counter-trend traders have already shown some ability to control the market. Enter on a pullback that tests the trend's extreme. The pullback can undershoot (a lower high in a new bear or a higher low in a new bull) or it can overshoot (a higher high in a new bear or a lower low in a new bull) the old trend extreme, but if an overshoot goes much beyond a trend's extreme then the trend has resumed and you should wait for a new trendline break"
Trade less and become more profitable!