Two economists are walking down the street and seeing a $20 bill lying on the sidewalk. The first economist says, "Look at that $20 bill."
The second says, "That can't really be a $20 bill lying there, because if it were, someone would have picked it up already."
If the street was crowded with PHD money finders, the economists might be wise to assume that it’s a fake bill.
The first scoffs and reaches down to grab the bill, but can only watch in dismay as the kids around the corner reel it back on fishing wire.
They would be right to find the $20 bill suspicious. Arbitrage exists in the real world, but it doesn't last long.
Holding cash? I don’t think so.
actually the opposite is true, I do want to advertise it so that "savy" traders follow a predictable pattern making the market move in the same predictable way. People who just buy and hold will continue to provide a floor. What I basically described is a way to buy low and sell high since the majority of technical indicators are based off of moving averages.
What you're describing is just a basic Bollinger Band strategy. Everyone and their cat IS already using it. It seems to work fine despite this.