Trend following does not include predicting. It involves reacting. I always look at the indexes and see where they are at. Currently they are looking rather sickly.
A tidal wave of selling started in Europe and moved to the Unites states when the US markets opened. The major averages gapped down at the open and were unable to stage even a weak rally during the day. The losses were significant as the COMPQ fell 4.12% and the SPX was lower by 3.59%. Both closed at the bottom of their intraday trading ranges, a sign of a lack of buying as prices fell. No one would step in to support prices. Volume was much higher across the board. This is not unusual after a big new event, and the Russell re balancing added to the total. In any event this constituted a distribution day on all the major averages.
No one knows how this will play out and if the Brexit will be a catalyst for a long and waited bear market…As a trend follower you want to follow the trend. Unfortunately there has just been a lot of chop over the last several years. The only way to avoid choppy markets is not trade…Keep in mind, the most amount of money to be made is at the beginning of a bull market. Not the END!!
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