Friday, December 10, 2010

Intuition and Markets

Intuition
1.a. The act or faculty of knowing or sensing without the use of rational processes; immediate cognition. 
b. Knowledge gained by the use of this faculty; a perceptive insight.
2. A sense of something not evident or deducible; an impression.
 Intuition is an extremely abstract concept and putting it to practice is difficult.  So if you have intuition you should be good with markets right?  Well sure, but instead of trying to develop this characteristic, just let the market do the work.


Markets always react before things actually happen.  Now I am not saying that "markets are always correct" but markets in essence already have great intuition.  A market is all of the 'brightest' minds making the decision for the price at that very moment. 

Let's look at GE over the past few weeks.  Now today they just raised their dividend and we saw a 3% move just today.  We saw a 12% move in the past two weeks.


Early month break of opening range against prior months pivot.  Is this market intuition?
 

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