still twisted...
http://www.village20...bsentometer.htm
bullishly-challenged are going to need a lot of luck here.
Well, at least the mindless "Rain Man" like parroting of bearish catch-phases has finally ceased after how many years? Hey, whatever happened to "Joe Six Pack" and "Mr Bagholder"? I guess they're on some exotic cruise around the world right about now 
Hi Vector,
That's an interesting link. It reminds me of a survey taken of people regarding the economy, how they were doing, and how they perceived the economy and others doing. The high percentage felt they were doing well, but also felt the economy and other people were doing much worse. Now, I read this a long time ago (a few years back), and only make the comment regarding the psychology of the poll, and how people answered. I don't know how people would answer today, but it does go to show that people see others different from themselves.
Your choice of words, "bullishly challenged" is also interesting. I'm not sure if you intend it this way, but it does have an aire of taunting about it. Is this your intention? If so, at least for now, I guess I qualify as "bullishly challenged."
I started lurking with increasing frequency over the past few months, (after abruptly stopping trading 2 years ago while dealing with the end of a marriage of 12+ years). I found a few things quite interesting with the board, namely a few of the regulars were still here, and the flavor of the posts, in general, seemed about the same, i.e., bullish vs. bearish calls, etc. I also noted that some taunting of the opposite side still exists, and in particular, there seemed to be an elevated level of taunting and irritability a little more than a month ago (which led to one poster being put on moderation).
Something Mark pointed out to the board a few years back: Irritability increases on the board near major market turns. So, this was the first clue I had that the market is indeed getting close to a turn, because the taunting was a little more it seems... at least, about a month or so ago. And it happened there was in fact a turn... from up to sideways (there are three market directions: up, down, and sideways).
Every trader must pick their strategy (of course), and be willing to pay for the risk that strategy brings. Of all the strategies, the two main ones I see are the top and bottom pickers (that's me) and the trend followers. It's just how a person percieves risk and can manage it that dictates the trading style, and because we all see things differently, and will disagree so much, that we all benefit by having a liquid market. As I'm sure you know, this is because when two people make a trade, they are betting they are right and the person they are trading with is wrong. So, trend followers risk entering when the trend is ending, or that the buy signal indicating a trend is now in place happens to coinside with the conclusion of a correction from the other direction, i.e., trend followers risk going long at the top, and short at the bottom. On the other hand, top pickers and bottom pickers look for exhaustion of the current move, and know that like waves in the ocean, there will be a rather predictible alternating of movements higher lower, higher, lower. These traders try to find the point at which the eb and flow of the wave will change direction, and capitalize on that change. Of course, missing this turn is how the top and bottom pickers pay for their risk.
So which is correct? Both, but each strategy will be rewarded differently. In fact, I read a few years back advise from a professional trader (maybe Linda Rathke?), that it does not matter which direction the market is heading, up or down. A trader can make money in either direction, long or short, and further, a trader should specialize in working one side only, i.e., the long side or short side, regardless of what the market is doing. Implied, of course, this strategy is for nimble traders. The advise was based on being a specialist with one market, and preferrably the way that market moved in the trader's preferred strategy.
A week or two ago, someone posted a link to another trading webside, and I read something very interesting from it:
The stock market moves up less often than people think. Over the last 50 years, it has gone up only 53% of the trading days. This means that 94% of the time the market goes nowhere. Focusing on each day, individually as an opportunity, is very rewarding.
http://stocmarket.com/methodp.htm
So, I thought about that after reading this post of yours, and pulled up a one month chart of the SPX. Now, before you go look, can you tell me how many days were up vs. down in the last trading month? To save you the time, I'll tell you: for 18 trading days, there were 9 white candles and 9 red candles. Looks like about 50-50 to me, at least for the last month.
Knowing that we're in a rather strong bull move, I also looked at 2 months: with 39 candles, there are 23 white, and 16 red, confirming bulls had more opportunities, but also giving the bears plenty of opportunity as well. And visually, what color is the largest candle on the 2 month chart? Well, it happens to be red, and that's before the top was in. So, my whole point is there are opportunities for both sides, and we need both sides to make a market.
As for my own trading, it just so happens I took my first trade on Friday (1/12) after being out of the market so long, by going short at 1438.75. This also happens to be my first ES trade (I traded different markets before). For this trade, I actually lowered my entry twice on Friday, to make sure I got in, first, from 1441.25 to 1439.25, then again to 1438.75. My last three attempts to go short the market missed by an average of 2 to 4 points, because the fibonnaci targets I had were not achieved, which to me is bearish. My first attempt to short was the day of the recent 6 year high, my entry was 1447.5, and if I remember correctly, the high that day was 1444.5. I did not post that entry, but I did make a post with targets on a subsequent attempt:
http://www.traders-t...?...st&p=263460
With that post, I expected the recent previous high to be tested, but did note a lower resistance level at 1428.25. From the post:
That said, there is confluence of resistance in the 1431 area (matching flat line resistance with the previous high). VST there is another confluence area of resistance at about 1428.25.
I looked at the higher targets in that post to enter, particulary, because I felt concern about bullish seasonality, and also paid (perhaps too much) attention to the bullish calls, so I decided to stretch the entries up a bit to reduce risk (have a closer entry to the stop out), and missed getting in for nice moves both times. (We get paid for risk, and often trying to reduce risk also has a cost of lost opportunity.)
The high the day before that post (12/27) was 1427.72, within half a point of the lower fib target identified in the post. On 12/28 I did expect follow through from the strength of the previous day (which was up about 10 points, and 16 points the past 2 days). The day of my post the high was 1427.26, missing a full point below the lower confluence area of 1428.25, as there was no follow-through from the previous day at all. Then, on January 3rd, that resistance area was tested again, this time exceeding the lower confluence area by 3/4 point, again missing the retest of the high, and the market subsequently closed down on that day.
From that same 12/18 post:
The opposite scenario occurs (i.e., showing weakness) when the expansion targets are missed (and retracement levels slightly exceeded), showing weakness in the impulsive move (main market direction) and the increased potential for a reversal.
The market was showing it's weakness by missing upside targets since the day of that post, and did not test the December high until Friday (1/12/07). But the new targets for the recent move Thursday and Friday were a little higher.
From my post Thursday, 1/11:
If the 1421.21 low after today's earlier high holds, then the contracted .618 target is 1433.48.
http://www.traders-t...?...st&p=265566
For yesterday's trading (1/12) I found confluence of resistance at the 1433.5 to 1436.5 area, and expected the market would break the previous high from December, but only marginally. The first target implied a new high, and calculating for the spread premium between the SPX and futures, I placed my order to go short at 1441.25 at the market open on Friday. When it looked as if that order would not get triggered yet again, I lowered the entry to increase the probability of entering during the trading day, and got filled during the last hour of trading. Without lowering the entry, once again I would have missed the trade by about 2 points. So at least for now, the market again is showing weakness at the top by missing the lower target by 2 points. Maybe that will change on Tuesday, but for now, that's not the case.
So, does this bearish play for the next couple of days make me bullishly challenged? Maybe so. However, I have found there is enough reliability for these short term fib targets to build an edge, so that's the basis of my own top-bottom picking strategy that I like to use. Perhaps this 4th attempt to enter will now be the time the market breaks out to the upside... perhaps. But you've got to play the odds, and the odds favor 5 pts of upside risk, vs 20+ points dowside potential profit... or more. I'll take those odds.
And finally, when I do see posts that do appear a little to be taunting the other side, I remember quite well what happened to a good trading friend of mine, a friend who was extremely bullish during an extended market move, and who just could not understand my top picking strategy (and argued with me as such)... as I kept getting flushed out of trades. He said, "I really feel sorry for you, because I know you will never, ever make money trading." Perhaps by remarkable coincidence, he made this call about my own personal trading the very day the market put in it's high before a substantial correction, for which i went on to make 50% in my account by that summer, and for which he has ever since, suffered the fate he once predicted for me. I think deeply about that whenever I start feeling a bit too confident about any call or analysis I've made, just to be sure not to allow over-confidence cloud the fact this is all probability based, and no matter what the call, or how good it looks, it can be wrong. I would never taunt the other side for selfish reasons: I don't want to put my psychology on the line this way, as that will create an additional bias (over making the trade) and cloud judgement with no financial upside for that additional bias, as now there is a "vested interest" other than making money for being "right" about the call.
And looking at the posts on the board, I come away with the sense that it does appear that this time... when I've finally entered my first trade, the trade will go south, as bulls are quite confident, there are plenty of calls for a top in February or later, and there are other posts showing nervousness with some short positions. But, what does that say about sentiment?
I won't post often, but will post what I see from time to time offering a little different type of analysis, as a way of thanking the board for all the great information that's generously offered up every day. The psychology of trading is very facinating to me, and I believe mastering trading psychology is the key to success in this business, so I do like to post about this topic from time to time as well.
Edited by Net, 13 January 2007 - 02:58 PM.
