If you focus on short time frames the danger of getting cut up in volatile movements and becalmed in dead zones decreases. Getting cut up and becalmed is mostly psychological, if you commit to a longer term trade and trust in market dynamics then your trades can improve.
But the advantage of trading on short term charts is it gives you an intuitive feel for market structure. It is worth doing now and then to remind you what bases all this fractal structure (it is not fractal at its base at all, it just looks this way, this is one of the realities of trading).
But always keep an eye on fundamentals and the possibility of these or the computers triggering a breakout, but a knowledge of market structure will make it clearer when these are about to happen (the volatile ranging and deep valuation probes).
In 2007 I was very interested in China. I like Chinese culture, I think it is beautiful. The one major point every book I read on China made, was it has a problem with companies which were once communist enterprises and which the state consequently owns a stake in. Apart from this, the legacy of communism gives China the best gift of all, an educated confident population.
That is the root of its growth. Again without getting too political, the philosophy from which communism comes said quite starkly, there is an evolutionary process to the promised land - communism decided to short circuit this.
Perhaps one can see what is happening in China as part of this process re-establishing itself. Anyway I am not a communist, in case you are wondering. The fascination of China for me is it gives an apparent alternative to capitalism. But, I believe in individual freedom above all, this is why I throw in my lot with capitalism, problems and all.
Another point is, Chinese companies are innovative and effective and already world leading in very interesting ways. But nothing I have seen anywhere takes away from the status of US companies.
I was looking at my notes from 2007 and I saw my notes for G. I said positive things about it, but noted it was highly priced. My point of these notes was to provide a reference point for after the crash. As I have already noted, the crash changed the trend lines on companies and in this case pushed it down and pulled it up to where it was.
The point I am making, does the fact it would be more expensive now without the crash make it cheaper now - it depends on what happens when the recovery really starts, i.e. can we expect what has happened in the past a huge surge making up for lost time (the process which pushes the Dow to higher highs).
I am hoping this surge is based on company valuations and some other debt inflation. I hope the Dow does not go to where a real valuation would put it as I said in my posts and twitter (remember the possible probe of a while ago), but look for cheap quality companies.
© 2010 Guy Barry - All Rights Reserved.
