jerrydylan: I read a lot of materials, in print (Barron's) and on-line (greenfaucet.com and seekingalpha.com). I look to what successful hedge fund managers are doing. I look at insider movement using the free services of J 3 Service Group (you can sign up for free at www.j3sg.com). I've read a lot of investment books by authors like Ken Fisher and others. I look to market history to see what has happened before under similar circumstances. I look at charts but am not a strict chart follower. My brother (who trades S & P futures professionally) provides me with some insights as well. I've been buying/selling stocks now for over 25 years. I started at the beginning of the bull market run in 1982. My first trade (of a company that helped pioneer the MRI, I think they were called Fonar) paid for my 1st year of law school. I've had some winners and quite a few losers too. Hard knocks. But these are the most challenging times I've ever encountered, or anyone has encountered unless they were trading in 1929-1940. The markets tend to fluctuate in roughly 20 year cycles...secular bears and secular bulls. Bulls tend to rise slowly and steadily with only occasional pull backs. The bears have much greater volatility and can provide greater opportunities to profit if played correctly. Look at charts from the 1906-1910 and 1929-1940 eras. Wide fluctuations with deep crashes and strong rallies. We're in a similar patttern. And since this secular bear started with the dot-com bubble collapse in 2000/2001 we're in for a bad market until at least 2020, and perhaps beyond. Some of systemic problems are the large and aging baby boomers and the costs that go along with it, the upcoming pension fiasco (see pensiontsunami.com) with both public and private pension funds unable to meet their obligations due to the poorly performing stock markets and the upcoming commercial real estate fallout. Add in the sure to be weakening dollar due to borrowing and spending what we don't have and its a recipe for disaster for the buy and hold investor. I think gold and foreign markets in Asia and Brazil will be the best places to be long term. But even those will have fluctuating periods so vigilance will always be neccessary. As for the prediction about the upcoming rally and subsequent drop I look primarily to the similarities between this period and the 1906-1910 period which had similar causes and so far have produced eerily similar chart patterns. You can google any number of articles from last fall that write about it. As for the market being oversold, I agree. I've been anticipating a pull back for almost a month now. The longer it takes the deeper the pull back will be. I picked up VXX last Friday and so far I'm under water. But I have time on my side. Good luck.
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