My initial intent was to focus on the number of major equity indices near their all-time highs or attempting to break out of long-term ranges, and how their behaviors around those prior highs over coming months will likely offer significant insight into what comes next. It’s evolved into something else, which I will share with you here. Making Sense of the Stock Market’s Randomness I am convinced that most market fluctuations are random, mostly untradable noise. Yet most who work with the financial markets for a living must translate meaningless behavior into a continuous narrative for clients and employers. Importantly, once a narrative is publicly expressed, the analyst/trader becomes entrapped in that narrative, and all the resultant behavioral biases that being identified with a view entails. Working in the institutional setting, my solution was to focus on longer timeframes. When patterns occur at the proper position on the chart, they…
