Maybe it will be as fleeting as the half pirouette the market pulled at the
200 day moving average a few weeks back. One thing is certain - the market
has been in a trading range for over the past six months and is currently sitting
at the mid point of that range. This is actually quite similar to what became
last years consolidation phase - but tighter and softer. I say softer because
although the headlines and tangible risk propellants are even more worrisome
than when the sovereign debt crisis erupted last year - fear has yet to grip
the tape in the same indiscriminate fashion.
Bulls can look at the price structure of the market and find consolidation
within a relatively narrow range. Bears can look at the same structure and
find a broadening top with diminishing participation and desensitized participants.
Although I am an active trader, I have always taken a broad perspective when
approaching the markets. I respect the Big Picture and attempt to place each
piece of information within its appropriate context and timeframe. I have found
that without this approach, there is very little understanding of ones expectations
in the market and an endless potential for risk.
I am not a stock picker - but trade the broader market itself in varying timeframes.
I want to know which way the prevailing wind is blowing, where the doldrums
can be expected and where the shoals will likely rise. I will not claim to
know which vessel is the fastest or most comfortable for passage - but I can
read the charts and know the risks.
I am not a salesperson for the market and its many wares. I observe it, contextualize
its moving parts - both visible and discrete - and interpret.
I practice Market Anthropology - Welcome to my notes.
Erik Swarts is not a registered investment advisor. Under no circumstances
should any content be used or interpreted as a recommendation for any investment,
trade or approach to the markets. Trading and investing can be hazardous to
your wealth. Any investment decisions must in all cases be made by the reader
or by his or her registered investment advisor. This is strictly for educational
and informational purposes only. All opinions expressed by Mr. Swarts are subject
to change without notice, and the reader should always obtain current information
and perform their own due diligence before making any investment or trading
decision.
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