Could The US Fall Like Japan
As in the last of my posts…I have been mentioning Japan and the situation it faces. Rob Prector from the Elliot Wave institute correctly predicted the crash of 1987. Albeit he has been bearish for quite sometime upon reading his web site he had an interesting comparison on the same theme I have been mentioning, the similarity of the US to Japan. Japan also tried various stimulus plans as the QE2. The markets rallied as have the US markets ( especially yesterday) only to be down approx 43% in the following 2 years. As Prector states and we all know that history does not repeat itself….but the similarities are uncanny. More so…virtually every investor, trader or even human being believes stock markets have only one direction long term which is up. When I explain the importance of having a plan many just do not get it until I show them a chart of the Japanese stock market. Japan went from approx 39,000 to less than 9,000 since 1989. Think how many years of this down trend. Americans can not believe this can happen to the US stock market. As a trend follower I believe anything can happen…more so I believe in 6th sigma events. This is the entire reason I trade with a complete plan. I know why,when and how much to get in on a trade….I know…why and where to exit a trade. Nothing is left to second chance or guess. In the heat of the trading as in battle I have been trained over all of these years to be disciplined and patient.
Can you fathom the pain for most if the US stock market went from where it is now to 1,000? For trend followers ( if the banking system holds) a move like this could be extremely profitable. Many commodity trading advisors in 1987 had one of their best years on record. No one knows the future…however I strongly suggest you either learn to trend follow or allocate to someone who does. It is your financial well being at risk.
* Chart from Robert Prector website
Futures trading involves risk. People can and do lose money