Daily Archives: January 11, 2017

Politics, Psychology and Investing

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shadow

Robot-48x48There are 3 Things in the title.  Thing 2 is a big key to managing markets and being successful at Thing 3.  Thing 1, while a consideration to the extent that it affects policy and structural macro issues, can get people all screwed up with respect to Thing 2, thereby hurting their chances with Thing 3.  As noted in an article last April, it is vital for investors to deprogram themselves, especially when it comes to politics.

To the extent I went over the top with the theatrics after the election, making light of fully erected Trump Towers (vertical stock charts of the ‘Trump plays’) and whatnot, I got out of line with my normal mode, which is to tune it all out.  But hear me now; the Trump phenomenon was very good for me because it opened up a wellspring of psychological inputs I can work with.  The gentle, firmly entrenched Obama whispering lullabys to us for 8 years?  A snooze fest.

With Trump, politics are not involved in my market view but psychology surely is.  Fiscal (Trump admin) as opposed to monetary (Bernanke/Yellen Fed under Obama) economic manipulation may work or it may not.  But it is just a different form of government policy trying to will an economy to do what they want it to do.  I’ll just stay open minded because… psychology. (more…)

Could The Miners Have Provided The Ultimate Fake Out?

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by Avi Gilburt, ElliottWaveTrader.net

First published Sat Jan 7 for members of ElliottWaveTrader.net:  This past week saw a very nice move higher in the GDX and gold, but silver has seriously lagged, which does dampen any outright bullishness at this time.  But, let’s review where we stand overall.

Several weeks ago, as the GDX broke down below its .618 retracement, many were throwing in the bullish towel, and everyone seemed to adopt the “clear” heads and shoulders pattern presenting on the daily chart, while pointing to target levels below the January 2016 low.  But, it just seemed too obvious to me, and it seemed like the market was setting everyone up.

In November, well before we broke the .618 retracement and well before we broke the neckline of the seeming heads and shoulders pattern, I wrote the following:

In our Trading Room at Elliottwavetrader.net and in my live video sessions with our members, I have noted several times over the past weeks that the perfect bottoming set up would begin as the market recognizes a heads and shoulders pattern setting up in the GDX.  And, many this past week were pointing to this “perfect” pattern, which they view as setting us up for new lows in the complex.  In fact, it could be “too perfect” since the entire market seems to now be hyper-focused on how it is going to take us to lower lows.

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Wild Morning

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We’re only a few hours into the trading day, and there’s already a lot happening. I’m watching the Trump press conference right now, and his words are definitely pushing sectors around, including, notably biotech. My Mexican short idea, shown below, continues to break down nicely, and the core failure (that long red horizontal line) is very much intact.

0111-EWW

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Baby Huey

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I’ve been accumulating DUST every day for the past four days. It’s showing a small profit at this point, and if miners break down the way I hope, this could be a great position. The gold bugs index, shown below, is slipping beneath the lower portion of its topping pattern. Nothing definitive yet, but we’re moving in the right direction.

0111-hui

Georgy Girl

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My Tesla had a couple of technical “events’ yesterday, one bad, one good.

The bad one was a sudden loss of power steering. The reason wasn’t what you’d expect, like some fluid leakage or other proletarian predicament. No, no, this is Tesla. The software needed to be fully rebooted. I can tell you, though, when it decides not to offer power steering, it was virtually impossible to turn the steering wheel. I felt like I was trying to spin the steering on the Titanic after resting on the ocean floor for the past century.

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