The market is digesting the gains of yesterday but that does not mean we are done with the flight to galaxy. Thursdays have been most bullish so far and tomorrow we may see another attempt to break through 1400 in SPX. I don’t think anybody knows what is going to happen short term but everyone is scared to short. Today was a bearish reversal day but TA has not worked well lately, so not much to read into it.
We have assumed control…
"Do not attempt to adjust the picture. We are controlling transmission. If we wish to make it louder, we will bring up the volume. If we wish to make it softer, we will tune it to a whisper. We will control the horizontal. We will control the vertical. We can roll the image, make it flutter. We can change the focus to a soft blur or sharpen it to crystal clarity. For the next hour [undetermined], sit quietly and we will control all that you see and hear."
Well, I've probably raised a few eyebrows with my obsession with Broadway musicals, but now I'm going to up the ante and hold up Rudy Galindo, the men's figure-skating champion from 1996, as another model of human triumph.
This young man had endured horrible tragedy in his life. Having grown up in poverty, and barely able to make ends meet, he also lost his father and a brother within a year of the National championship, and his former pairs partner, Kristi Yamaguchi, had dumped him.
The 1996 tournament was pretty much his last chance to shine. At 26 years old, he was ancient by ice skating standards. He had taken third place after the shorts program, and as the final competitor in the longs program – – in his home-town arena – – the pressure couldn't have been more tremendous.
Watch the clip below and witness someone who takes an excruciating, risk-filled situation and turns it into something magical. Tears still well up every time I watch this clip. Maybe you can learn something about it that can inform your life as a trader, especially during difficult times.
Yesterday was an odd one here on the ol' blog. First off, I think the best way to keep a pulse on the psyche around here is via the comments section, but due to the demands of my schedule, I only get to read about 2-3% of the comments that are entered in the first place, so oftentimes I – of all people – am somewhat out of touch with the nuances of what's going on with people here (mercifully, seven straight years of blogging have created a self-sustaining community, so this is one of the few places where the blog's owner doesn't have to prod people into saying something!)
But, Slope being by and large a bearish blog, it's not surprising that its readers were in a funk (although, interesting, traffic grew about 25% versus the day prior). What struck me was a handful of people had decided to basically isolate themselves from blogs altogether, since I suppose they felt it was causing them a harmful bias.
I suppose I can see some logic in this. I hang out here and at ZeroHedge most of the time, so I understand that I can be subject to more than a fair bit of confirmation bias.
But I think there are a couple of flaws in putting one's head in the sand.
First off, we as traders know how convenient it is to blame an outside entity for our own problems. If you lost money, perhaps it was the fault of Ben Bernanke, or Goldman Sachs, or Brian Sacks, or some other sacks out there that I've forgotten. It's just as easy to blame a web site or a blog for your bias. So placing the responsibility for any bad trade on anything outside yourself is an error. This is not to say I am above such things; it's something I combat within myself all the time!
Second, I believe that there is much more benefit from the learning that goes on here than any detrimental effect of group-think. Indeed, there is a healthy number of very outspoken bulls that are perpetually on the comments board, and I think they do a very good job not only of offering excellent ideas but also tempering some of the tin-foil-hat nature that would be apt to running rampant were it not for their presence.
In short, I hope we see some of these lapsed Slopers return to the fold. Judging from some of the emails I got from people directly, as well as some of the comments, it seems a lot of folks "snapped" yesterday. Here's hoping they heal and return.
So far the market is holding its gains from yesterday quite well. We might be slightly in the red, but there isn't a sense of profit taking from the masses. In terms of news that could shake a market at its core, soaring oil prices, four more fringe European countries ready to belly-up, Middle East tensions and heightened inflation risk domestically doesn't seem to be worrisome to the bulls. So what else possibly could?
LONG: Fifth Third Bancorp (FITB)