Should you dance in and out of the markets?

Focus Group Of Traders and Investors - AUDIO

Discussing Jesse Livermore and the question on dancing in and out of the markets.

Great story from Jesse Livermore's Trading days.

http://recordings.talkshoe.com/TC-70323/TS-295377.mp3

SPX rising, Dollar sinking, Gold Golden

SPX upwards trend corresponds with the Dollar's downward trends. How far does the dollar have to go? Well looking at the dollar index it's previous low around 72, it's currently at 74.5. So it still has some way to go. The Gold upward trend is still in tacted with many commentators like Marc Faber of the Doom, Gloom and Boom report says that we haven't reached the top of the market yet.

When looking at trending charts, a simple way to analyse them is to follow the previous lows and highs. As long as we have higher lows and higher highs the trend is still upwards. When the previous low is broken by the current price, that is a wake up call. The trend MAY be changing so watch carefully.

Watch out for smooth price action

Notice the smooth price action in this chart esp the higher lows each day on the upwards trending weeks. Always look for higher lows in a bull market and lower highers in a bear market. Take care.