Tuesday, November 30, 2010

Market Pullback

You shouldn't be concerned about the market's latest pullback from DJIA 11,400 to 11,000.  Moves like this are typical in bull markets from time to time and it doesn't mean very much. 

Business writers always come up with some reason why the market is going up or down on a given day, and sometimes they may be right, and sometimes they are full of hot air.  How do they know why the market went up or down in a given day?  Did they interview 100,000 people who placed trades that day and ask them why they bought or sold?  They're just guessing.  So don't pay too much attention to what they say. 

I don't care if the market goes up or down on any given day.  I want to pay attention to what direction the market is going overall -- known as the trend.  As long as the overall trend is up, there is no need to get overly concerned about a small pullback.