Tuesday, December 17, 2013

Demark Remarks

So glad we've almost made it
So sad they had to fade it
--Tears for Fears

I've been revisiting discourse (e.g., old blog posts, shows/movies about event, etc) from the credit market meltdown. Why? I'm getting that 'feeling.' And if my mind isn't right then I will have trouble acting appropriately should a similar cascade commence.

Thought this interview with Tom DeMark was interesting. I met Tom back in 2005 at a Minyanville event, and sat in on his seminars in 05 and 06. Tom's technical speciality is tracking 'trend exhaustion' and forecasting trend change. His work interests me because, being a contrarian by nature, I am attracted to prospects for 'fading' (rather than riding) trends.

Recently Tom has been studying current US equity index price action relative to other major trend reversals and 'crash-like' events. He notes that current patterns bear much similarity to 1929, 1987, 2007/8.

Of course, past is not necessarily prologue. In fact, Tom notes that his methods for timing trend changes have not been particularly effective in US equity markets during the past couple of years. He suspects this has to do with the enormous amount of monetary intervention done by the Federal Reserve.

Regardless, it appears that the convergence of analogs and patterns has DeMark concerned. His work points to 'warnings' that appear 'obvious' to him.

His work also suggests downside trend exhaustion in gold and a pending major trend reversal.

positions in SPX, gold

1 comment:

dgeorge12358 said...

Take time to gather up the past so that you will be able to draw from your experience and invest them in the future.
~Jim Rohn