I hear a lot of market commentators giving authoritative sounding reasons for what the market is doing, and what it should do next.
These explanations typically get into the complex intra-market correlations of; the price of Oil, interest rates, the impact of tariffs, the supply of precious metals, the strength of the US Dollar and so on.
These explanations sound like someone analyzing a “Rube Goldberg Machine” and explaining why each piece is there and how it all fits together.
But it’s nonsense of course! A Rube Goldberg machine is intentionally over-complex and none of the parts make sense.
It is as if the market were a complex machine, with moving parts that have a specific purpose, that work together in a predictable way with a predictable outcome. It is not!
There is a simple way to observe the market, to understand what actually is happening, and to participate in a probable outcome.
In the latest video, I give an update on my analysis of what is actually happening and what to watch for next.
Take care, trade safe and be sure to leave your comments.
Dean
My son (14 ) and I loved the machine video. Your comment on the reality of what’s trading was great. Thanks Dean. Much appreciated. God bless,John.
Thanks John! Glad you both enjoyed it.
The first two minutes were hard to concentrate on. I have no idea what you said because of the cool shiny things in the video!!
As long as it is cool and shiny, right?
Hi,
Does the IWM (Russell 2000) ALWAYS lead the way , with the dow & s&p500 to follow?
Or could it be possible that the IWM is playing catch up , and needs to make a new high first before dropping with the other index’s ?
“Always” is a tricky word in the markets. As soon as we see something that looks axiomatic, exceptions emerge. It is true that the Russell “Usually” leads the other indexes, both up and down.
See the attached screen shot of S&P 500 vs. IWM on a weekly chart. If you look closely, you’ll see that the IWM does seem to lead major moves, with more dramatic swings.
Dean