Market Correction Could Be Over Very Soon

Academics (apologies to my colleagues) and many financial advisers believe that market timing is fruitless. Few academics have actually tested the approaches used by technical analysts. I remember a "test" by John Train who would take a chart of a stock and cut it in half asking the technician to forecast what was going to happen in the second half of the chart. Ridiculous right? I never heard of him cutting a spread sheet of data in half and asking the fundamental analysts the same question when he was an adviser along with my boss at Scudder, Stevens & Clark in the early 1970's.

Professor Andrew W. Low at MIT Sloan is an exception in the academic world and I recommend his book "A Non-Random Walk Down Wall Street." We use a different language but Professor Low has shown that many technical tools work, indeed these are what many algo traders have turned into formulas. Financial advisers are another story. They have been brainwashed to believe that if you get out of the market you will miss some of the best up days that contribute to performance, however, performance can be greatly improved by sidestepping some of the worst days in the market....178 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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