As I often point out, we only know what resistance is AFTER a level has been tested, the market is overwhelmed by supply and prices turn lower. It is actually a little pet peeve of mine when people say authoritatively that the market”will find resistance at xx level” or if they say anything about price action with authority as if they KNOW what WILL happen.

The simple truth is NO ONE knows what the future holds for prices in any auction market. We have to focus on POTENTIAL action points and objectively observe price action for evidence the setup we have anticipated is actually there before we put our money at risk. To do otherwise is akin to gambling and usually ends up being being costly (as those who have been short recently will attest.)

It is easy to feel like you may have missed out on a large part of the recent rally and it is times like this where my favorite quote (source unknown) is “It’s better to be on the sidelines in cash than it is to be in the market wishing you were out.”

Our number one objective is to make money consistently but no one gets all the moves so our strong defense and discipline should at least allow us to sidestep disasters like shorting into such strength. Fortunately for Alphatrends subscribers, we have been focused on long stocks and managing risk on an individual basis, no different than any other time. If you are interested in a CONSISTENT trading approach which is based on objective analysis of price action please consider a subscription.


ETF Close July 12 2013

Thank you Brian.

On a side note I wanted to take just a moment to tell you that I highly respect and appreciate the mentoring you provide. I find it very consistent, logical, straight forward and to the point without gimmick or taking into account the general noise that often overshadows the markets. I genuinely find your approach to be not only one of the most simplistic but of the most logical as well. There is no end to bad information available to those new to the markets, so much so that opportunity for adopting poor habits is an unfortunate norm for many who dare jump into these dangerous waters. If at the end of the day your efforts have helped to save a few little fish from the sharks then I’d say sir that’s a good day.

Take care.