"Writing a book is an adventure. To begin with it is a toy, an amusement; then it is a mistress, and then a master, and then a tyrant." - Winston Churchill (British statesman, 1874-1965)
This quote appears to bear little relevance to trading, but if blogs are like books, then I'm still in the nascent stages of amusement. In my naivete, I do not see how a labor of love turns into a tyrannical endeavor, but that is a secret time may reveal.
Thursday, January 22, 2009
Manic Markets
The market continues to churn in a wide range, but there are some signs of change.
Hedged trading has begun under performing the underlying index, signaling short term bullishness. Volatility is falling, but remains high, so stay cautious.
Tuesdays selling may be a capitulation point considering the ratio of down/up volume.
Up/down volume on Wednesday is in an uptrend, so look for markup and accumulation.
The NAMO has stopped falling, and though it remains below 0, it could turn bullish fast.
TBT has showed impressive strength in the last few days, even during the sell off. This is my favorite long candidate, target ~50.The weakness in the VIX is encouraging, but one day does not make a trend. I'm still very cautions, and more liable to sell rips than buy dips. Nevertheless, if Treasuries continue to fall, I will begin to get long.
Tuesday, January 20, 2009
Quote Critique
"People become attached to their burdens sometimes more than the burdens are attached to them." - George Bernard Shaw (Irish dramatist, 1856-1950)
Revealing wisdom by reversing the order of words is a tried and true method, and the technique borders cliche due to its prevalence. Nevertheless, Shaw hits on an excellent point that relates to trading in a tangible way.
You get what you want out of the market. This is true for gains and loses. The propensity for individuals to ride a cratering security to zero belies an unconscious desire for emotional stimulation. Complaining about loses is a symptom of cognitive dissonance, and it echos Shaw's sentiment; many are unwilling to surrender that which ails them.
Revealing wisdom by reversing the order of words is a tried and true method, and the technique borders cliche due to its prevalence. Nevertheless, Shaw hits on an excellent point that relates to trading in a tangible way.
You get what you want out of the market. This is true for gains and loses. The propensity for individuals to ride a cratering security to zero belies an unconscious desire for emotional stimulation. Complaining about loses is a symptom of cognitive dissonance, and it echos Shaw's sentiment; many are unwilling to surrender that which ails them.
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