Category Archives: Psychology

The EKG Market

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When the powers that be are doing everything that can to keep the dance music going, the moves are going to get more and more violent. What we’ve seen just in the past couple of days is a sneak preview of the absurdity ahead: waterfall drops (AKA reality) and explosive up-moves (AKA desperate bidding from the big boys). My motto? Three words. Sell into strength.

0415-es

Silent Scream

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It’s obviously more of a kick when things are falling, but looking at today’s action, we have seen this movie before. In fact, we’ve seen it multiple times lately. The unicorns are cavorting once more in the meadow, and everyone is bidding assets up. But one glance at the past couple of months on the ES simply screams “short me!” even though it’s virtually impossible to do so on a day like this and feel good about it. It only feels good after the fact. That’s why hardly anyone does it. “Sell into strength” are three of the easiest words to say but most difficult to actually execute.

0414-es

Happy Little Trees

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I can’t draw. But I’ve always been fascinated by people who could, and part of the reason is a feeling that I’ve never discussed with anyone before.

It’s not that it’s particularly embarrassing or anything. But as a child I distinctly remember what would happen when someone would go up to the chalkboard and carefully draw something out. Or perhaps I’d see a television program in which someone was painting. Anytime anyone was slowly and carefully doing something illustrative, I got this……….funny feeling. (more…)

Short Palo Alto

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My town has changed. When I first came here, in 1984, it was a pretty standard college town. Sure, the houses were kind of pricey, but the look and feel of the place wasn’t that much different than you’d probably get in any other town next to a big, well-known college.

But things have changed a lot lately. And I’ve got to say, the kinds of changes I’m seeing weren’t really apparent during the Internet bubble. For some reason, the self-importance and money-worship didn’t really take root until recently, after the financial crisis. (more…)

The “FROTH” Awaits…

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Since my last post of March 1st, the ES has made a new high, after experiencing a tremendous amount of volatility, as shown on the following Daily chart.

You can see that price nearly reached a 100% Fibonacci Extension level on Thursday, before declining on Friday. This extension was measured from the 2012 lows. For the most part, price has remained within the lower half of its channel from those lows. (more…)

Gold Contrary Indicators

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gold.barThe gold sector is peopled by a high concentration of contrary indicators because it is a relatively (to the vast world of equities and bonds) small market that offers refuge from some of the damaging aspects of the spectrum of investment products that are supported by the manipulation of interest rates and printed (and digitally created) money supplies. Thus, gold has moral high ground if an asset can be thought to have morality.

More accurately, the people bullish on and promoting gold take high moral ground and that is where the emotional power comes from in this market. This power feeds upon the desires of regular people to not suffer the consequences of the ‘evil’ actions of those running a system that many do not agree with. Readers of this site know of course that I certainly don’t agree with the setting and manipulation of interest rates by decree of man (and woman) in service to engineering desired outcomes in financial markets. (more…)