Risk asset ETFs have been forming important higher lows in an atmosphere of escalating skepticism toward risk assets.
However, the bell-weather safe-haven ETF, the long-dated US treasuries, TLT, is failing to hold above its 50-day moving average. The other safe-haven, the U.S. dollar index has not been able to hold above the 80 point mark. Once the US dollar resumes its bearish trend again, then you will notice some fireworks in the market. At that time it will be too late to jump on the bandwagon.
The commodity producer ETFs are in general much higher than they had been during the first half of October. If they were not, then we would add to our existing long positions. The majority of traders and investors believe that these recent failed rallies are a bearish sign. However, the right move would be to use this window of opportunity to accumulate ahead of a major rally. Once the rally happens it will be too late. We always try to get positioned ahead of a major rally and the flock investors. You cannot make serious profit by participating after the trend has been noticed and established, because the risk reward ratio is too high.
We make a serious effort every day to understand what is going on in the financial markets, rather than making conclusions based on charts and outdated mainstream technical analysis, which is done by millions of traders. You do not win by following the masses or by following any widely used methods, trading software, or even pure fundamentals. It takes hard work and a lot of research into what the smart money is doing, as well as reading the emotions of the flock traders. It is not an exact science, which is one of the biggest reasons why most logical and highly academic investors fail to make money in the market by simply trying to buy high and sell low.
Trading is an art, not a science.