[Copernicus]

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The thing is equity/commodity et al markets are irrational, not rational.

This means that at certain points they will have either to much fear or to much confidence. The idea is to buy when there is to much fear and sell when there is to much confidence. Easier said then done of course, but doable non the less.

This is not something you can do in the short term.

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Its not something the "experts" have been able to do consistently for the long term either. Market timing strategies don't raise returns net of expenses. Simple dollar cost averaging into index funds (or their historical construct before they actually existed) beats 95% of the market timers for every 5,10, 15 and 20 year period since the depression, and none of the 5% appear in more than 2 consecutive such periods. Obviously the more recent results are more credible, since the data is much more robust, and there may be some bias from the strong bull markets,but you would expect a legitimate strategy to show at least a few consistent succeses.

Short term plays obviously can work, but they are too infrequent and require moves that are too big for large scale investors. Eg when the Dow was close to 14000 I closed out all my long positions since numbers like that are often ceilings that the Dow bounces off of. (More psychology than anything as OAFK noted.) I got back in a little too soon apparently but I did get back in close to the floor and its just been bouncing around since then.

A large fund cant make moves like that and my plans for early 08.