Replies to post #5043 on E-Wave for the S&P 500 Index

[JLS]

I won't even try to explain why.

I'm not trying to be rude. I just follow a different process for my stock trading. I'll explain.

Think of the stock market as an overcrowded place where there are day-traders on one end of the room (and who feel as though they have to be in and out of a trade during the same day) and on the far other side of the room there are the Cramer Followers who feel that they have to create a long term portfolio of several highly rated stocks in terms of stability and predictable income, and each of which represents a different large sector thus forming diversity.

I do neither. I look for a single stock which for some (usually justified) reason trades in a relatively narrow and horizontal price range -- meaning their future trading range is known and the stock will stay within that range most of the time over many weeks and months. These stocks, if all you do is buy and sell that specific stock, will allow you to frequently trade in and out of it relatively predictably. I go one step further: in both my individual and retirement accounts, I load up on that one stock then I sell weekly Call options against every share. That sale is immediate income to me for that week. If that stock is assigned at the end of the week (due to the Calls I sold) I will load up on it again on Monday and again sell Call options against all shares that expire on the next Friday. Wash, rinse, repeat week after week after week.

That process works really well!!!

[JLS]

Your question:

"Could you find out why the August high (up more than 20%) didn't end the bear so we could have avoided the drop into October?"

Answer: market prices are a result of all the traders active in the market, buyers and sellers. In other words, the market is a voting machine and merely expresses what all stock traders -- buyers and sellers -- decided between themselves. There is nobody in command that negotiates a better outcome for one side or the other.

An exact opposite of that is a musical orchestra, which always has a conductor (a leader) whose sole desire and purpose is to conduct the orchestra in a manner that creates beautiful music for its entire audience. The conductor is in command of the orchestra.

There is no such leader, no conductor, for the stock market. Every trade is a tug of war between buyers and sellers each seeking to outdo the other.