illusion friday, page-85

Thank you to the several posters pointing out how bad economic indicators and stats are at the moment, and how these are likely to get even worse.

Fact: economic indicators measure historical performance

True market bottoms occur when the future appears to be so bad that there is even perceived risk that there might not be an economic future. Yet in the midst of all this doom and gloom, the sharemarket mysteriously, and against all logic, starts going up even though bad news continues to unfold.

Lo and behold, a few months later economic stats start improving. But by this time, sharemarkets can already be 10%, or more, higher.

Low volumes traded have recently been cited as confirmation the rally since early July lacks any substance and credability. To me, however, the shallower trading volumes simply reflect the magnitude of the 2 year scare with its several panics. And hence this is more indicative of the huge number of sidelined former investors and traders.

My personal investing and trading strategies of recent months have recently reversed from selling rallies to buying dips. I am convinced we have already seen the lows for 2010.

Regards,
Ramjet