Category Archives: Long-Term

Bear Markets Are Hard

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Bear markets in particular have a way of wearing on you. Sure they look great in hindsight, leaving little doubt about how you one could have easily banked millions. And quite frankly there is actually some truth in that (we’ll cover that later), but in reality most traders usually get chopped to pieces trying to time the endless preceding gyrations, only then to watch the tape run away without them.

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You Ain’t Seen Nothin’ Yet

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the_penguin_and_the_polar_bear_by_lt_general_cao

I seriously doubt that the average market participant realizes the magnitude of the devastation that lays ahead. It is our human nature to project forward based on recent events – a common cognitive bias which can easily lead to painful losses during regular market conditions. But what we are facing over the coming weeks and months will register several standard deviations beyond current worst case scenarios, at least based on activity/pricing I’m currently seeing in the option chains.

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My Dream W.A.G.

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I am typing this hours before GLOBEX opens on Sunday, so I continue to have no clue what kind of follow-through (if any) will exist from Friday’s selling. My dumb guess for this week (or hope, at least) is to wrap up the selling Monday/Tuesday, get the Fed announcement, rally firmly until the year is almost over, and then start slipping again to begin what promises to be a really amazing 2016. I remain only in short positions, but half as committed as I was Friday morning, and I intend to trim with gusto before Yellen and her bizarre voice commences Wednesday.

1212-wagtw

Historical & Statistical Yearly Perspective

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(Editor’s Note: below is a post that Retracement Levels submitted. For reasons that will become clear as you read it, I’d take issue with some of the points made, but I frankly think there is plenty enough room here for divergent opinions. I appreciate the post. – Tim)

Since the first time, I have been on this blog, in 2006, (at the time it was hosted on blogger), I have always been mesmerized by the observation of the desperate attempts that all the various market analysts, gurus and forum posters made at predicting long term trends in Bull and Bear Markets.

Most people seem to be convinced that if you analyze a very large amount of information, including all sort of possible market predictions (plus your personal bias, never forget that, and some astrology and psychology to sprinkle it all up), they will come up with a verdict about where the market is headed.

It is a truly entertaining show.

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