Where is the market going?

Where is the market going?

If you ask me whether the market will move up or down by this time next year, and I might as well flip a coin because I do not know.

If you ask me whether the market will be moved up or down by this time next month, and again, I might as well flip a coin, because I still do not know.

If you ask me whether the market will move up or down by this time next week, however, may be a coin flip, because I do not know.

And if you ask me whether the market will be moved up or down by this time tomorrow, I'm sorry, but I just do not know!

But ... If you ask me whether the market will move up or down in the next few minutes, and I will have a definite position. Why? Because if I can see the current state of buying and selling in the market NOW, then you can make sensible and fair accurate assessment of what the market will do in the next few minutes, and moments.

My prediction will not be based on some secret formula, it will be based on some esoteric sound indicator, or some complex mathematical equation. No, it will be based on my assessment of the current state of supply and demand.

Predicting long-term movements in the markets is a guessing game. All we have to go to the past, we can reasonably do is assume that what happened in the past, will continue to happen in the future. Basically this is what is the trend following, which assumes that the past equals the future.

In my trading world, the only law that works is that of supply and demand: if there are more buyers than sellers then the market will go up, and if there are more sellers than buyers the market will go down.

She works one Iota of whys and wherefores of the buyers and sellers. It is important that a trader has chosen to sell now because the 9 period moving average has crossed the 14 period, or because he has just lost his shirt, or because he is taking a profit, or because he is just plain boring.

No, I do not care why a trader entered buy or sell order, I just care that they have by their act, added to or buying or selling pressure.




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