Picking the tops and bottoms in the price of a stock, commodity or index is a nearly impossible task. There are a number of reasons for this, not the least of which is the fact that the price sits at a high or low for just a few minutes to a few days at the most. Tom DeMark, the famous market technician, has another reason. Prices stop falling when the selling stops, not when the buying starts. Prices stop rising when the buying stops, not when the selling starts. So when we make a suggestion to buy or sell what we think will be a top or bottom, we are sure to be wrong, at least in the short run and this is why we rarely try. We do however like to prepare or be on the lookout for a potential change in trend. As our bread and butter, we like to pick stocks one by one and have a mix of bullish and bearish trades. Often times, this leaves with a bullish or bearish tilt. If that tilt is consistent with our market view, we let sleeping dogs lie.
