Tom Scollon

Most of us of course like trending markets. They have long moves – up or down – and are easier to identify and invest into and we generally sleep better at night. But we can’t have our way all the time and sometimes markets have insufficient buying or selling force to move them strongly in one direction.

As I search to fathom out the melee of the last couple of weeks I try and contemplate likely scenarios. I say likely as to talk of just possible scenarios is really just sitting on the fence and I am not good at that. Nor can I say I am good at picking short term moves. I say ‘moves’ as I am inclined to think a short term ‘trend’ is almost a contradiction of terms. I do not aspire to pick the short term moves but only to understand them as a foundation to at least the medium term move ahead.

Perhaps chaos is slightly too strong a word for what we have experienced in global markets in the last few days. However it has caused some consternation, otherwise we would not have seen this kind of action:

In some recent editorial I have referred to methodology and making sure whatever system you use is well founded and has been successfully tested. I would like to elaborate a little more on this.

Late last year I talked about ‘sticking to your guns’ when you believe in your strategy – despite there maybe being some headwinds. This of course assumes that your strategy was well founded in the first place and has been successfully and repeatedly tested. This is all part of having a proven methodology which you use over and over again.