Category Archives: Psychology

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…)

Relativity

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Friday was a very interesting trading day for me, and I thought I’d share my memories of it since I think it is instructive about both risk and emotional management.

As most of you would probably guess, I came into the day completely short. But I wasn’t just short: I was Herve Villechaize short. So short I could jump off a nickel. You get the idea.

In spite of the fact that Monday registered the highest closing price in the 13 billion year history of the universe for many indexes, including the now-Apple-laden Dow 30 Industrial Average, I’m a dauntless bear, and I spent the week shorting, shorting, and then shorting some more.

Before I go further, I should explain a couple of elements of my trading that are important to this story. First off, since I’m a constant-as-the-Northern-Star permabear, I judge my own performance inversely. If the market is down, I certainly want to be up. And if the market is up, I know I have to tolerate being down.

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Tilting at Golden Windmills

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dq.windmillsThere is a writer we’ll call Don Quixote who is tilting at something that no longer really exists… the evil gold promoters that used to be taken seriously by innocents to the tune of near total destruction of their portfolios.

Don once went on about the gold cult and I even highlighted his post because I had been going about the gold cult as well. The cult-like aspect of the gold “community” (← a dead giveaway) was real, and the group-think that the 2001-2011 bull market fostered was very strong and really damaging to those who did not question it tenets until it was too late.

But here’s the thing… it is now 2015 and nobody takes gold bugs spewing about a $2,000 PoG (if there are any of them left) seriously. But still Don tilts at the active promoters he imagines around every corner. Methinks Don is creating a niche of his own, firmly within the new phenomenon that has manifested in Martin Armstrong’s wake. Behind Marty have come a growing number of those who would save us from the evil promoters.

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