Category Archives: Psychology

The Financial Pugilist Part Two

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Boxing is a primal and brutal sport.  It is human conflict boiled down to its most pure essence.  Two men enter a ring and one exits as the winner.  In order to win the boxer must hurt, pummel, and assault his opponent more then he himself is hit.  There are no metaphors, similes, or descriptive comparisons for the imposition of one man’s will over another.  Boxing is a real, literal, and primal example of one man beating another into submission.  And this is what makes boxing a perfect sport to learn from as a trader.

Trading is one of the most simplistic ways of making money.  Every trade ends up as either a profit or a loss.  A trader extracts money from the market or the market deals the trader a loss.  Very simple.  Hit or get hit.  A trader has two choices: take money from the market or have it taken from them.  There are no do-overs, there are no mulligans, there is no way to spin result.  Every trade either makes money or loses money.  Brutally simple.  Hit or get hit.

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Negative Interest

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We are well into the eleventh year of Slope of Hope, and I think part of the appeal of the blog has been that I write from the heart. I’ve debated today whether I should write this post, but I’m just going to go with the same instinct that I’ve always had and write what I’m feeling.

Specifically, I am starting to wonder if I’ve completely lost interest in the markets. My life still revolves around U.S. equities, watching the charts during market hours and keeping an eye on the ES and NQ after hours, as well as FOREX. But, I’ve got to tell you, the past six years have transformed my disposition toward the markets from excitement to frustration to despair to disillusionment to sheer tedium.

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History is Fact, Part 1

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By Biiwii

In writing this post I came to realize that its subject matter is too expansive for any single post. So consider this an introduction to a series of posts that I’ll probably do in the coming months, as facts come to the fore and lend themselves to historical analysis. Two examples are presented below.

You might not be the type who needs or cares to subscribe to commercial market commentary/advice/trading/management services, but one thing we all can do is work through the freely available stuff calling itself ‘analysis’ flying around out there at warp speed and cull what is based on facts or honestly produced analytical work from the other garbage that is all too often based on ego, bias or agenda.

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Crude Market Forecasts

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The news scams and crude market forecasts are becoming even more crude.
You can read last week’s Bloomberg article quoting the helpful folks at GS here:
Bloomberg: Goldman Says $40 Oil Call May Be Too Low as Demand Surprises

Then, you can enjoy this chart showing what appears to be a nice Distribution Zone, followed by a 10+ sigma, 7-handle move to down.  Please enjoy the custom selected colors:

Crude Reality

Long live 50s!   Errrr…. 40s!

If you really wanna have a blast, join the fun at #RigCountGuesses.

Where’s the Fear?

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The market has fallen a little over 3% since it hit its highs and in the new bull fed supported market this is considered a crash, there is an overall lack of fear this decline compared to the last declines. Looking at the chart below you can see that the VIX index rallied at least 40% before the market bottoms. The stepper the decline the larger the drop but on average the VIX climbed 86%. So where are we now. Well the market has declined around 3.9% and the VIX has climbed about 35%. So what does this all mean, well it means there is a strong possibility that the market has another 2-3% decline and the VIX has another 5%-10% rally before we can start thinking a bottom has been put in. Of course the markets can prove us wrong but history does repeat its self. Click the chart to zoom in. (more…)