There no place to hide now as each technical level is hit and broken through
I'm a fan of technical analysis, but at the same time I think the current methods are completely worthless. The efficient market hypothesis can easily be disproven; the markets are not random. With fractal analysis you can prove that there is a long term memory effect. So there must be ways to exploit this, based purely on price data alone. The momentum anomaly is such a way; trends persist for longer than you should expect if the EMH were true. But if TA is taken further, with levels, support and resistance it completely loses its value. Which is frustrating so I keep looking for new approaches
I believe that different investors have different investment horizons. An investor with a net worth of 10K and fully invested in stocks is I think close to puking his guts out at the moment. An investor with a net worth of 1M and diversified into 60% stocks and 40% cash and bonds is starting to get a little bit grumpy at the moment. A high net worth individual invested in many more asset classes and might be excited to buy some more stock at lower prices. A multi billion dollar pension fund just looks at its models and might rationally decide that given the interest rate and price/earning projections it is almost a good moment to rebalance.
The first investor is selling to the high net worth investor, and will be pleased for the first couple of days that he did so. Then the pension fund decides it's the right moment and starts buying. Leaving the small investor with the idea that he got screwed again.
"When things get so bad you're about to puke, you should probably double up" (Marty Schwartz)
So look for a small investor and ask him if his carpet needs cleaning.
