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Only someone blessed with my amazing mental gifts could reach a conclusion so pithy: making money is a lot more fun than losing money.
I had the same result today – – my IRA at a new lifetime record. My heavily hedged big account somewhat damaged. And my all-bearish personal account torn to ribbons.
I'm commencing the long drive home. There won't be another post until late tonight. Adios!
I like FAZ today, by the way, due to banks' relative weakness to the other indexes.
The most fervent hope I have for myself as a trader is to one day be as good a bull as I am a bear. On a scale of 1 to 10, I'd give myself an 8 as a bear (I shave off 2 points for getting out too soon), but a 3 as a bull (and I'm probably being terribly generous).
One challenge I have is expressed in the chart below; here is STP, which I own……..
This stock is up 100% from where I bought it. Now, for a short, that is the theoretical limit, but a long could obviously go up more than 100%. The challenge for me is that, as a person reliant on stops, the stop on a chart like this is so far away it would constitute most of the profits. And second, my bearish tendencies let me see things go down easier than up. I guess in the case of STP, I could probably convince myself to hold as high as 30, where serious resistance exists.
Let me introduce you to my best friend right now:
Although the bulls have a government on their side which is willing to sacrifice the future of the country for some very short-term gains, there is something the bears have on their side as well: an astonishing amount of overhead supply.
The market put on its rocket boosters from 666 to 825 because there was very little standing in its way. The fall from 825 to 666 was swift and virtually uninterrupted. The market, being a two-edged sword, had little trouble moving the other way (a few trillion dollars in freshly-minted currency helped, too).
The point is that, even if sometime this year we do keep pushing our way higher, it's going to be quite a slog. The chart doesn't require interpretation – – – the cold fact of the matter is that from 825 to 1025 there is a giant slime pit of overhead supply that is going to make every point higher a struggle.
