Monday, May 7, 2012 - The Gilmo Report

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Jahbulon
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Joined: Wed Nov 17, 2010 1:22 pm

Monday, May 7, 2012 - The Gilmo Report

Post by Jahbulon »

A normal correction

Posted: 07 May 2012 11:45 AM PDT

When one zooms out to the 50,000-foot level, it is apparent that the current pullback in the averages is quite normal. After a 24% Nasdaq advance in over three months which only featured one small pullback of 3.3%, the current decline is to be expected and also welcomed.

It is to be welcomed because it is only after declines in the averages that aggressive growth stocks are able to build new basing patterns which can then serve as launching pads for their next move up.

The probabilities favor a return to new highs and much more deterioration in the advance's breadth, i.e. the average stock, before a primary top is put in and a bear market begins.

With that said, we do not own a crystal ball, and one should neither operate on the premise in the preceding sentence nor any other besides a focus on what the market itself is actually doing. With this in mind, the glamours that are in the midst of basing patterns are the ones that should merit attention in case the market firms up and puts this decline behind it. It is better to be proactive than reactive. These titles

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hugehail
Posts: 602
Joined: Mon Mar 12, 2012 10:05 pm

Re: Monday, May 7, 2012 - The Gilmo Report

Post by hugehail »

I have idea what the following sentence means. Does this mean that we are still in a bull
market and that a new high will occur in the immediate future, following by a bear market?
What are the time frames on this. Its all very vague. I mean, I could find a way to
verify this no matter what happens.

"The probabilities favor a return to new highs and much more deterioration in the advance's breadth, i.e. the average stock, before a primary top is put in and a bear market begins."

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Jahbulon
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Joined: Wed Nov 17, 2010 1:22 pm

Re: Monday, May 7, 2012 - The Gilmo Report

Post by Jahbulon »

These guys are trend followers by trade, so they won't make predictions about which way the market will go, nor do the care. They trade based on what is actually happening in the market at this very minute, and they will go long or short based on what they perceive the trend to be.

Trend followers have had a rough two years...........

Make sense?

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