Negative Interest

By -

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.

To be sure, I’m not alone in these feelings. A number of my closest trading acquaintances have, in one form or another, divorced themselves from the market, or at least their former style of trading. Three flavors of transition spring to mind:

  1. Adaptation – These are folks who have decided that the old style of trading doesn’t work anymore, and they’ve taken a totally new approach to the markets. One chap in particular (you know who you are!) has become his own high-frequency trader (or at least something closer to that), making hundreds of trades a day, seeking to capture tiny profits on each. Molecool has built an entire company around his new trading system. Some folks have switched to binary trading. Regardless of the change, this category describes people who have dumped traditional analysis and trading (which I still am engaged in) for something radically different.
  2. Treason – I use this term jokingly, but these are people who have changed from permabears to permabulls (again, you know who you are!) Their prognostications are just as passionate as before, but instead of sounding like mouthpieces for ZeroHedge, they sound like mouthpieces for Jim Cramer. Not to say this is foolish – – let’s face it, the market just keeps going up – – but I can’t help but feel a twinge of betrayal.
  3. Abandonment – Finally, here’s the group that has simply said “f*ck it” (which isn’t easy, considering the difficulty of pronouncing an asterisk) and stopped trading altogether. Our beloved BDI is a shining example of this, and good for him for giving up on these absolutely ridiculous markets and focusing on his new line of work. I’d be lying if I said I didn’t envy him.

Well, if I’m so unhappy with the markets, why not follow suit? Well, let’s take them one by one.

Adaptation seems the noblest of the above three. After all, don’t intelligent, thoughtful people change their style to fit new conditions? Isn’t that the entire basis of evolution? Yeah, it is. But there are plenty more opportunities in life than trading.

For instance, I gave binary trading a try. I was pretty excited about it at first. But, for me, it’s ungodly boring beyond all measure. The folks at Slope who successfully trade binary refer to it as “working in the salt mines”, since they’re quite aware that it’s a drudgery, albeit a profitable one (for some, at least).

“But, Tim, making money is what it’s all about. Don’t you want to make money?”

Ummm, no, I don’t. Not that way. I don’t handle boredom well.

If I was offered half a million dollars a year to sew buttons on shirts, that would be a fantastic offer, but I wouldn’t take it. I need my mind to be engaged and my creative urges satisfied. Sewing buttons doesn’t do it for me. Neither does binary trading, or executing hundreds of trades HFT-style. I’m a swing trader at heart, and I choose not to change.

Well, how about becoming a raging bull? No, thanks. I think the 15,000 posts (literally) I’ve written offer up a respectable argument on that count.

OK, how about just leaving trading completely? Well, one problem with that is that I’ve spent over a decade of my life building out this little corner of the Internet. It actually doesn’t take that much interesting motion in the markets for me to find charts I really like to share. But I know myself well enough to know that, unlike Bob Prechter, I can’t simply cease trading and discuss charts purely on an intellectual level. I’ve got to have skin in the game. I’ve got to actually be in the mud to care about this stuff.

So I feel a bit stuck, and I’m not quite sure why I’m in this funk. I think it’s just the tedium and monotony of markets lately. Over four months ago, the S&P was at about 2080. Right now, it’s at about 2090. Surely there must be better uses of our time than a market like this.

From time to time, I’ve alluded to the secret “project” I’m working on. I think I’m almost hoping for the project to catch such fire that I would have no choice but to leave the markets (although I’d move heaven and earth to make sure Slope Plus kept going, since I feel a great debt of gratitude to those readers). I actually feel a bit of pity for “the project”, since I’m putting a lot of pressure on it to liberate me. If it’s a flop, well, God almighty, I’m just going to be stuck here.

So, ahhh, heh, this isn’t exactly an actionable post chock full of trading ideas. It’s just a sharing of where I’m at. Perhaps some of you feel the same and can garner some relief in knowing you’re not alone.

I’ll be reaching out to Slopers in the near future to sign up some early testers of my new creation. Who knows, maybe the markets will get interesting again, plus the project sizzles, and I can have the best of both worlds. I’d love to stay fully engaged on all fronts. But if these markets just keep doing what they’ve been doing lately, I really need to get the hell out of here.