By Paul Price
To fully appreciate just how useless technical jargon and charting can be, read the words line by line. Here’s an example:
This was published early on Tuesday, February 26, 2013, following yesterday’s greater than 300-point intra-day negative reversal of the DJIA.
1) The analysts and commentators warning about a market peak could indeed be correct.
Indeed they could; it’s hard to argue with that.
2) Perhaps a major top is in place.
Perhaps. What action does that dictate?
3) They could be wrong as well.
That’s always a possibility. What action does that suggest?
4) The market could be presenting a bear trap.
It might be. What action does that call for?
5) If support levels hold, or are temporarily breached…the market may move higher.
If the market doesn’t go down, and stay down, it may go up.
6) Any true breaching of the support level may indicate a significant correction.
If the market goes down significantly, we might be in for a down market.
7) Plug your ears and watch the charts.
We will only know if Monday’s action was a buying opportunity or the start of a correction after it’s too late to do anything about it.
The true value of the shares we buy does not vary based on market action. In the absence of any company-specific news, lower prices are good for investors with money to commit to new positions.
If you haven’t yet, read the latest MarketShadows Newsletter: February 24, 2013: Not Done Rising, But Night Will Come