“What do you make of these markets?” I asked.

“Well, the VIX is all over the place, the market looks vulnerable to a further retrace back to the Fibonacci support level so maybe we’ve found an area where the change in breadth is more contrarian positive than negative. But the SKEW and level on the DXY don’t confirm so there is likely a window of divergence confusing the signals, we’ll have to watch the On Balance Volume and put-call levels. This isn’t a time to be complacent, it’s time to be very active but at the end of the day, I don’t know.”

Have you ever had a conversation with an expert like this? It sounds very impressive, all those technical terms; one would assume this person must really know what they are doing. With any profession, there are people who know the price of everything but the value of nothing. It could be a mechanic telling you that your flux capacitor is shot or a plumber telling you that your kinetic dynamic filtration condenser is toast. There is beauty in simplicity. The most important part of this snapshot of where markets are, was the last three words; “I don’t know”. Warren Buffett said “You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ.”

There is no such thing as a magic set of rules or a formula or a bell that goes off sending the all clear signal. While there are experts that can use all the jargon and truly use the minutiae of data to come to conclusions, the best of the best take the information and distill it down to a simple, concise explanation. One of the best at this was Peter Lynch, author of “One Up on Wall Street” and former manager of Fidelity’s Magellan Fund, his wise words were “never invest in an idea you can’t illustrate with a crayon.” Many regrets and mistakes could be avoided by understanding what you know, what you don’t know and staying within your limitations. When you’re being baffled with big words and technical phrases that might as well be in a foreign language, remember the Crayolas.