The unrelenting bull gallops on

The October and November rallies that were envisioned at the end of September have indeed occurred - evenly more strongly than most commentators expected - including myself. The market's remarkable ability to put together breathtaking rallies in a very short period of time hasn't changed. Many commentators have affectionately refer to these unending spikes higher as "V-Shaped rallies" given their visual similarity to the letter "V". They litter the charts since the advent of quantitative easing.

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Fundamental vs Technical Approach - Which is Better?

When it comes to picking stocks, the age old debate of which is better, fundamental or technical analysis, has generally found study after study saying that neither is better than the other. Now comes a study that sheds new light on this controversial subject - light that suggests that there is some real value in a technical approach as compared to the fundamental approach.

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What a fine mess we have created

Looking back, everything seems clearer and sharply focused. Looking forward it seldom has the same clarity. With central bank policies for a about half a decade, it was pretty clear - just keep shoveling more money out there and drive debt prices to extreme levels. The consequences were clear in some places and murkier in others. Debt pushers would see their currencies devalue and a general rise in most financial assets – at least for a while - until the next country came along and did the same. Corporations - even countries - moved their risk curve out farther and farther as the debt laden policies forced decisions that otherwise would have never occurred. Heck, "if the money is free, then why not use it" was the attitude.

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The market is suffering a death by a thousand cuts

Way back in March of this year, the probabilities of a range trade at the highs looked quite probable and an article alerting to a roller coaster market that was taking shape was shared here. That up and down movement lasted for almost half a year until one week before the markets came crashing down, the probabilities of a larger fall were high enough to issue a direct warning. Now, five weeks into the downdraft and with the indexes poised to try and break lower still, there is enough evidence to suggest that even though lower prices are most likely still to come, it is unlikely they are going to come in a crash manner as many keep expecting. Instead, my neoclassical work suggested that it will come by way of a death by a thousand cuts type decline.

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Remove crash fears by being better informed

Multiple times over the past year I have penned pieces telling you what to look for to know when a crash may occur. These articles have appeared when the airwaves are full of "crash talk" with the most recent one published just a couple short weeks ago when the markets were seemingly cratering. The structure wasn't there then and it certainly isn't apparent now so talk of a potential crash before it is possible is - well - ludicrous for lack of a better term. Fear of a crash is a byproduct of incomplete knowledge and unless you have studied crashes in depth having incomplete knowledge about them is reasonable which, of course, is why the fear spreads and talk of crashes appear on a regular basis.

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