In the face of insurmountable bad news coming in daily, markets are levitating. I don't understand why people are buying stocks. In my eyes there are zero bullish catalysts. Forward EPS estimates have fallen off a cliff. Energy/commodities crashing, the BDI is at all time lows. There is immense turmoil in the world with Greece, Europe, the Middle East, etc.. Obama is now saying that he wants to put troops on the ground to combat ISIS. QE is over, American economic data has been soft... Why are people buying stocks?
Here's what you need to realize: In this new world of internet trading, technicals rule above all else.
I want to believe that eventually fundamentals win out in the end. But in the day to day skirmishes, when the market marches ever forward in the face of potential Greece default and Eurozone disaster, not to mention more weak US economic data, It sure is easy to come to the conclusion that fundamentals are a load of bullshit. Yes, eventually the cool heads who were predicting fallout with the dot.com and housing booms were eventually rewarded but many of those people were predicting disaster years before the actual crash event occurred. Following their advice prematurely would have in many cases lost you money...
There is no 'reason' why the market should be going up at least not that I can see but when I watch CNBC all I see is an endless array of clowns being marched out in front of me ranting and raving about the 'recovery' and how great the economy is and how bullish the markets are and how wonderful cheap oil is and how wonderful expensive oil is and how you need to buy buy buy no matter what. It's maddening to somebody like me who actually watches the data, has seen the macro charts, knows the facts of the matter. But if these people that I see represent the Wall St. majority, then wall street is buying the fuck out of this market with a seemingly unlimited supply of ammunition. They have been able to buy up and take us violently higher on every single microblip the market has encountered for the past six years.
None of this macro news that has been coming out recently has been in the least bit bullish for stocks yet they continue to march higher relentlessly...
Perhaps my greatest folly is being concerned with the 'why.' Why the market does what it does is impossible to answer. You can study psychology and speculate but nobody knows why the market does what it does. This is why I am considering removing all macro and fundamental inputs from my trading strategy.
Clearly, there is a divergence between the way I think and the masses that make up the market. I need to remove any biases I may personally have from my trading decisions because by nature, I am a contrarian.
To be successful in navigating the day to day business of markets it is much more profitable to be a sheep. Be a robot, follow charts like a robot, manage risk like a robot, trade like a robot. There is no room for error in this business and the business of being a discretionary trader leaves far too much deviation.
In summary: Do not concern yourself with the 'why.' That is a path that leads towards madness and ruin.
Concern yourself only with the 'what.' What is the chart showing you, what's price doing right here, right now?
Here's what you need to realize: In this new world of internet trading, technicals rule above all else.
I want to believe that eventually fundamentals win out in the end. But in the day to day skirmishes, when the market marches ever forward in the face of potential Greece default and Eurozone disaster, not to mention more weak US economic data, It sure is easy to come to the conclusion that fundamentals are a load of bullshit. Yes, eventually the cool heads who were predicting fallout with the dot.com and housing booms were eventually rewarded but many of those people were predicting disaster years before the actual crash event occurred. Following their advice prematurely would have in many cases lost you money...
There is no 'reason' why the market should be going up at least not that I can see but when I watch CNBC all I see is an endless array of clowns being marched out in front of me ranting and raving about the 'recovery' and how great the economy is and how bullish the markets are and how wonderful cheap oil is and how wonderful expensive oil is and how you need to buy buy buy no matter what. It's maddening to somebody like me who actually watches the data, has seen the macro charts, knows the facts of the matter. But if these people that I see represent the Wall St. majority, then wall street is buying the fuck out of this market with a seemingly unlimited supply of ammunition. They have been able to buy up and take us violently higher on every single microblip the market has encountered for the past six years.
None of this macro news that has been coming out recently has been in the least bit bullish for stocks yet they continue to march higher relentlessly...
Perhaps my greatest folly is being concerned with the 'why.' Why the market does what it does is impossible to answer. You can study psychology and speculate but nobody knows why the market does what it does. This is why I am considering removing all macro and fundamental inputs from my trading strategy.
Clearly, there is a divergence between the way I think and the masses that make up the market. I need to remove any biases I may personally have from my trading decisions because by nature, I am a contrarian.
To be successful in navigating the day to day business of markets it is much more profitable to be a sheep. Be a robot, follow charts like a robot, manage risk like a robot, trade like a robot. There is no room for error in this business and the business of being a discretionary trader leaves far too much deviation.
In summary: Do not concern yourself with the 'why.' That is a path that leads towards madness and ruin.
Concern yourself only with the 'what.' What is the chart showing you, what's price doing right here, right now?
To make matters worse, this chart doesn't even look very bullish to me. It appears to be at the top end of a range, a potential short entry even. If it goes higher and starts to break out I may be forced to turn more bullish however because well if price is going up, I better be long with the herd, extra sheeple. BAAAAH
If I am going to remain so biased to the Bear Camp, I am going to wait until the technicals show signs of a legitimate breakdown before I push my luck. It looked so good for bears with four downward thrusts, but the bulls just will not give up...
The chart says Bullish, if it doesn't reverse soon it may be time to swallow the pride and join the herd logic and pride be damned!
The truth is, it has been proven that charts aren't really predictive but they do at least show you what has been going on with price. I'm not sure that I can realistically ignore all the fundamentals that have been flashing bright red for quite some time now, but I owe it to my brokerage account to try if what this market wants to do is shoot the moon. Who knows? I don't know why it would, but only time will show what actually happens...
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