It's difficult to make calls that go against everything you hear and see on the TV and mainstream media, sometimes you think you are losing it. However, that makes you re-double your efforts, look for more pieces of the puzzle, check and re-check your bias and do the best you can to be objective.
I on't like to read a lot of other technician's analysis because in some small way I think it will skew my own. There's only one Author that I really look up to and that's becaus the man has been at the forefront of "in the trenches" technical analysis. He brought indicators to Wall street as the computer revolution started in the 1960's and 1970's. He's responsible for tick volume, which nearly every other money flow indicator copied, including On Balance Volume.
So tonight when I read his nightly report, I felt a little better about what I'm seeing.
So here is Don worden's nightly report for tonight.
"The Worden Report (Friday, October 8, 2010)
Grounds for Suspicion
Users often hear me caution them about drifting into fundamentalism when technical analysis seems to fail them. I know I often sound that way, but that isn't exactly the way I mean it. There is a legitimate relationship between fundamentals and technicals. To start with, technicals originate with the fundamentals they reflect upon. If the technicals look bullish, it is because the fundamentals they are sizing up are feeling bullish.
But there is another relationship between the two that in some ways is almost the opposite. Sometimes the technicals silently detect something wrong in the fundamentals. When this happens, the technicals will sometimes resist the supposed clues they are getting from the fundamental cowboys. They will refuse to cooperate. These are the times when the technicals rise to the zenith of their power. These are the times that experienced traders find themselves paying rapt attention to what they sense are grounds for suspicion.
We have all seen this phenomenon many times, but, as individuals, we don't always get that sense of suspicion. For example, a company may report superior and surprising earnings, but the stock reacts by plunging. The technicals are suspicious of something hidden beneath the surface. It can be as simple as that. It doesn't have to be complicated.
Lately I have been getting these feelings of suspicion more frequently than usual. Today we had a grim jobs report, and the market acted outright chipper. I find that suspicious.
One thing I'm suspicious about, as you have probably noticed, is this whole idea of Quantitative Easing. Is QE a white knight in the wings, or is it a dark threat just over the horizon? I'm just not sure, and the worst mistake I could make would be not to admit it. All I can suggest for now is that you read all about it at every opportunity. Don't fool yourself into thinking you're stalking spectacular profits. Do so with humility. Do so from a defensive crouch. Keep a wary eye on the Federal Reserve Board. Look for technicals that "ring true." And don't ever lose patience. "
