Twenty-Ten has arrived, and of course I wish all Slopers a Happy New Year. I had a pleasant – although typically quite tame – celebration, and I'm going to spend the day packing up and taking the long drive home.
If there's one graph that, in a nutshell, captures the essence of 2009 for me, it is the one below. It's nothing fancy – just the UCPIX mutual fund, based on the double-inverse of the Russell 2000. It nicely expresses how 2009 was a fantastic, virtually uninterrupted, bull run.
But there's another graph with meaning for me. Yesterday, when I was involved with something else, I glanced across the room and happened to glance on my big screen a graph of DIA (the Dow 30 ETF). It was almost like a cheesy romantic moment ("across the room, their eyes met…….") because I was absolutely struck at what a marvelous graph it was. More on this in a moment.
OK, the moment has passed, so I'll continue: if I had been simply dropped into January 1, 2010, having missed 2009 altogether, I would look at a graph like the above and start doing handsprings. I'm a chartist. I rely on them for my decisions. And a chart like the one above is a slam-dunk, jumping up-and-down, scream it from the rooftops short.
Now, since I did not in fact give 2009 a miss, it's a little awkward expressing these sentiments, because just about every bearish notion and postulate in 2009 led to little more than looking and feeling foolish. But, even with all the ruckus last year, I am trying to see things clearly. And I really, really like what I see.
Added to which, it agrees quite nicely with my long-term chicken-scratch about the market, which has been spot-on since I scribbled it together 20 months ago (newer readers, please note the date axis is meaningless). I am entering the new year with 50'% of my capital committed, virtually all of it to bearish positions. I intend to augment the positions that do well as time goes on.
Now, I don't get real hung up on any kind of magical meaning to the new year. Those people that pledge to lose weight? Most of them will stay fat. Those folks who want to kick smoking? Most of them will keep puffing away. Personalities, habits, and dispositions are difficult to change, and human nature isn't known for its strength and determination in the face of inertia.
Likewise, just because 2009 was brutal for the bears doesn't mean that 2010 is destined to be great for them. But I'm cautiously optimistic, and if I may offer my own attempt at a resolution – in spite of my cynicism about the tenacity of such things in general – it is to more fully accept responsibility for my trading successes and failures. I think I've been pretty good about this, but I could definitely do better, and I think such a frame of mind is healthy for a trader.
So with that, I will commence a long day of packing and driving. Enjoy the long weekend, and I'll be back on the blog first thing Saturday morning.
