Category Archives: Psychology

In Perpetuity

By -

I am not a stranger to disappointment. There have been plenty of times in my life when reality did not meet expectations. This probably gives me plenty in common with other fellow humans. It’s certainly not like things always go my way. Far from it.

Being a trader, this is a phenomenon that is almost universal. People anticipate what they think is going to happen, they position themselves for it, and reality dictates whether or not they profit or not. It’s the nature of the beast.

October was an extraordinary month. It was tremendously exhilarating for the first half, and it was soul-crushingly difficult during the second (this is from a bear’s perspective; flip the descriptors for bulls). As deeply oversold as we were on October 15th (and with the VIX in excess of 30), I certainly expected some kind of bounce – and I made no secret of it – but I absolutely did not expect a bounce of this size and vigor. (more…)

Pushed to the Brink

By -

October is turning out to be far more “trick” than “treat” for equity bears.

At the midpoint of the month, things looked sensational. Stocks were breaking down left and right, and it seemed that we had finally encountered a sea-change in the market.

Since then, however, stocks have exploded higher with a gusto that I underestimated. I certainly expected a bounce, but nothing of this degree. Much worse, it seems that the cessation of QE (announced yesterday) has done nothing to slow the equity bulls down.

This kind of environment can really mess with one’s head. Let’s take a look at the past couple of days on the ES: (more…)

Revisiting Truth’s Moment

By -

Way back on August 30, I did a post called Past Fear, Present Fear, which offered up an analog of the VIX (please read it if you don’t remember; it’s a pretty good post). I would daresay it was one of the best posts I did in 2014, and things certainly unfolded as I hoped they would (although today was no fun for me). I followed up on October 9th with my Moment of Truth post, which was just before the markets started really falling hard. Thus – so far, so good. (more…)

When Confidence Crumbles

By -

Once again we awake to an array of seemingly contradictory news and reports across the spectrum. Whether it be Ebola, the financial markets, or just plain ordinary life in general. It seems everything is once again in turmoil.

The issue at hand is migrating from worrisome to darn right alarming. And that’s not counting the general public at large. That speaks directly to the very one’s trying to re-establish confidence.

Today, what was once presumed as “a troubling situation in competent hands.” Now appears more inline with the space between “in” and “competent” being a typo. (more…)

When Nothing Matters – Until It Does

By -

It would seem to anyone that’s been in business before the financial crisis of 2008 not only had the rules changed, but rather they changed so much even Alice would find our current looking-glass far more surreal.

It also seems that it wasn’t all that long ago where one thought that maybe, just maybe, to understand the craziness around you; you needed to ever so grudgingly accept the nonsensical mindset of “bad is now considered good.”

So, you adjusted your investing theses, your business plans, your whatever as to try to navigate these  uncharted waters. Waters that emanated via the Federal Reserve opening (if not destroying) the dam and flooding the financial markets with liquidity so deep even Montana thought it had a new water view. To then suddenly all you bought into (literally) all you’ve been told. All of it – falls like the house of cards you tried to will (wish) away as if it weren’t true. (more…)

The Moment of Truth

By -

First, a bit of shameless commerce – – for those of you potentially interested in joining Slope Plus, remember that this month I’m running a special (the first I’ve had in about half a year) in which you can use the service for free for a month. Just enter the coupon code trickortreat on the Subscription page, and voila, a virtual $29.95 is in your hands!

Now, on to my post………

Back on August 30, I did a post called Past Fear, Present Fear which, it seems, turned out to be really, really, really prescient. I urge you to give the post a glance, but in short, it drew a powerful parallel between the volatility leading up to the financial crisis and the volatility we were witnessing through this summer………. (more…)