"Stocks Blithely Ignore Traditional Warning Signs"

About a month ago just before the beginning of recent rally, an author published an article "Far Too Many Bears for Stock Market to Crash?" The author accurately and timely predicts the recent rally in September. Recently the same author published another article "Stocks Blithely Ignore Traditional Warning Signs". It states that "There are so many charting indicators (i.e., no fewer than six Hindenburg omens) that say this market should be collapsing – but it isn’t…so far." The article explains the fear of many individual investors who are waiting on the sideline.

One of the comments has insight of current market dynamics. Most of the arguments fit into the speculative trading strategy for the investment portfolio. It is reprinted as follows.

I have many of the same reactions to the marker lately as you do and although I also appreciate the insights and talent of guys like Bob Prechter and Dr Robert McHugh it does appear that something is no longer adding up.

I suggested as much in my own commentary when I wrote that technical analysis itself was now under attack and very susceptible to manipulation. The suggestion is that we can no longer rely on many of the indicators that the experts are using to chart the future. Furthermore, it has occurred to me that at a time when very few “real” investors still populate the markets that “very little effort” and not a whole lot of money can move markets in the direction of choice for those who are still participating.


We are getting false signals every single day and that is only leading investors to be fearful of everything. Is it any wonder that money has panicked and fled to the safety of bonds? And what safety are bonds when the dollar itself is going through a transformative devaluation that is draining wealth and buying power even as it offers historical low interest rates.

It is robbery by manipulation and I would strongly urge anyone with any sense to not run to that (so-called) refuge of safety but instead take a closer look at what is really moving in the markets. A lot of money is being made out there right now and it is not by people holding short positions and waiting for Armageddon.

Are we actually being cheated through a manipulation in the marketplace that pushes the herd to the cliff edge while all the real bargains are picked up at a fraction of their cost and our “safety” picks just drain our assets away? You better believe it. I am convinced this is a time of incredible buying opportunities despite the hazards of a sharp market sell-off. The risks can mirror the rewards in this kind of an environment but this really is a game for day-traders and those blessed with better than average market intuition and killer instincts.

So can you still make money? Absolutely. I would keep an eye on commodities, precious metals juniors, ETF’s encompassing developing markets and strategic resource plays that are overlooked by most other people. Rare earths are of of course but one example.

This is a great time to be a “stock picker” and do your own leg work. The easy money days when almost everything rose more or less in unison are gone for awhile and yet selective companies are doing stellar business and paying out the goods.

I wish I could depend on guys like Prechter and McHugh but the world of investing has become a casino of poor odds (as many others have noted) and the face cards are now in the hands of insiders who are yanking our chains and sending a multitude of shock-waves of fear through the ranks of investors to the point that the herd is primed and ready to move off the cliff in unison.

Let’s stay sane and not join them in that big leap.

And in the meantime, I would just caution to say that it will pay to stay on top of backstopping for losses and be prepared for the culminating event that brings this manipulation to a sorry conclusion.