A Note About Integrity

A good trader's loyalty is not to the bull side or to the bear side, but to the data. Conducting analyses with an open mind and faithfully following one's independent judgment is a form of integrity--one demanded by shifting markets.

In practice this means that I must remain true to the market data that I track each day, whether I like what the data are saying or not.

Right now, at the moment I'm writing this, the data are not supporting the bull case. We're seeing an expansion in the number of stocks making new lows, not a contraction. We're seeing weak sectors get weaker, not attracting longer-term value-oriented buyers. Advance-decline lines are making new lows, not sustaining divergences.

Tomorrow AM, I will summarize some of the data and some of these concerns. There's an old saying about the importance of knowing when to be concerned about the return on your capital and when to be concerned with the return *of* your capital. When weak markets don't attract sustained buying--and continue to weaken--my foremost concern is capital preservation.

Above all else, do no harm. It's an oath that works for physicians and traders alike.