Sorry for Crashing the Market

• Posted by Greg Harmon
• on August 16th, 2011

I have discovered a new correlation with the market that has 100% accuracy. You may know that I am on vacation since I have been talking about it a lot. This downtime has given me the opportunity to do additional market research. I have been been testing many ideas but an obvious one struck me today as I was driving North towards Charleston, South Carolina. The market is perfectly correlated to my latitude, and in fact moves in anticipation as the planning begins. I can not believe it took me so long to realize this, it is so obvious. just look at the chart below.

As I began planning in Cleveland, latitude 41″, the market anticipated my travels and started to move lower. I traveled South to Mammoth Cave, KY, latitude 37″, on a Sunday and the market moved hard lower on Monday and proceeded down as I drove further South to Stone Mountain, GA, latitude 33″. Tuesday I drove to Bradenton, FL, latitude 27″, the furthest point South on my trip and the market bottomed. I settled there through the weekend and then started North again Monday to Charleston, SC, latitude 33″. Clearly the market anticipated this move north Friday and then continued higher Monday. I am continuing further North to Raleigh, NC and Richmond, VA the next two days and will stay there though the weekend, returning home to Cleveland Saturday. Therefore I expect the market to move slowly higher the next two days and then rest before a small anticipatory move up Friday followed by a larger move up Monday. All latitudes are on the chart.

Ok, this is crazy right? But is it any crazier than comments that mention this market is just like the 1930’s or 1987 or 2008 and then playing the market according to what happened then? Don’t toss everything aside because a period of 5-10 days may look like a pattern that has happened in the past. Technical Analysis is about recognizing patterns and probabilities and using that information to manage risk while taking opportunities. But it is not about blindly following a pattern that has occurred in the past. Don’t fall into this trap. Look at your charts. Follow price and your indicators. Stick to your plan.

(As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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