This is the most bullish on the market I have been in awhile.

I am bullish on the market but I do not know where it is going.  To say this break wasn’t needed or even predictable is to ignore the writing on the wall.

Fear vs uncertainty

NFP came out really awful.  The market sold off (and then popped). But it starts the healing process and that is why I am bullish on the market.  Fear should only be on one side of the market.  When both sides of the market are fearful, that is uncertainty.  Uncertainty makes you do irrational things, it makes you see things that aren’t there, and it makes you do less.  That is if you catch it before you run out of money.  Looking at money flows is nauseating and my go to people in other markets have never been more confused.  If they want to create a good survey/index they should make one based on confusion.

Traders slow down first

You can protect yourself from fear but the only way to eliminate uncertainty is to decrease your bet. When there are periods of sustained uncertainty than traders scale back first.  Technicals become more difficult, ie the market moves without meaning.  An indicator is only as good as the quality of the participants.  The market closes below a MA and some funds get out because that is what they do. The next day it rallies. We have been rocking back and forth between major technical areas.  Eventually investors get tired and do less.

When prices matter

When prices matter everyone wins.  The people who were right get money and those that lose get evidence they are wrong.  Losses force a change, wins should too, but losses provide more motivation.  When prices matter the death is quick instead of a slow painful one.  People can learn and move on instead of pretending nothing is broken. The market needs closure as much as humans need it.

For the record, I have been wrong about this before. Will this time be different, it is still the early stages.  I prefer my market participants to be fearful not uncertain.  I do not know where the market is going but this week it is at least fearful (maybe).

( ) = edits as I started writing in the morning and finished it afternoon.

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  • I totally get this, great post. 
    My other shoulder is also telling me that sentiment is also not really ugly enough yet for this correction to bottom, if it is then why is the VIX not doing more? 

    • Thank you for getting it, as many did not judging my the hate mail.  ha ha.

  • Sharonanncrayne

    “I am bullish on the market but I do not know where it is going…”No offense, but the # of market participants relative to volume is very small. As long as they perceive “uncertainty” about the termination of QE, then “you” will perceive uncertainty and remain confused because they are confused.

    Try to minimize the “mumbo-jumbo” quotient in your prose.

    • This pots was about the shift of irrational to rational markets and how it heals.  It is like waiting for a verdict or whatever, no matter the outcome it is uncomfortable for either side.  

  • My mind is playing tricks on me.  This is how I “read” your recent post  http://bit.ly/j0puYI —-> http://bit.ly/kS7BXI  My interpretation may be saying something about my current mindset after a rough week trading.  Or maybe, I just need to make the text bigger on my phone.  More importantly, this was a good post.  Thanks! -Bill

  • >>I do not know where the market is going but this week it is at least fearful (maybe).<<

    ..meaning you yourself is also uncertain:-)

    • As a trader you are always asking yourself is this a trend or an aberration.  As I am proven right or wrong, I will act accordingly.  True about everything in my life.  

8 Responses to This is the most bullish on the market I have been in awhile.

  1. Nicola says:

    I totally get this, great post. 
    My other shoulder is also telling me that sentiment is also not really ugly enough yet for this correction to bottom, if it is then why is the VIX not doing more? 

  2. Sharonanncrayne says:

    “I am bullish on the market but I do not know where it is going…”No offense, but the # of market participants relative to volume is very small. As long as they perceive “uncertainty” about the termination of QE, then “you” will perceive uncertainty and remain confused because they are confused.

    Try to minimize the “mumbo-jumbo” quotient in your prose.

    • Eradke says:

      This pots was about the shift of irrational to rational markets and how it heals.  It is like waiting for a verdict or whatever, no matter the outcome it is uncomfortable for either side.  

  3. Bill says:

    My mind is playing tricks on me.  This is how I “read” your recent post  http://bit.ly/j0puYI —-> http://bit.ly/kS7BXI  My interpretation may be saying something about my current mindset after a rough week trading.  Or maybe, I just need to make the text bigger on my phone.  More importantly, this was a good post.  Thanks! -Bill

  4. Charlie says:

    >>I do not know where the market is going but this week it is at least fearful (maybe).<<

    ..meaning you yourself is also uncertain:-)

    • Eradke says:

      As a trader you are always asking yourself is this a trend or an aberration.  As I am proven right or wrong, I will act accordingly.  True about everything in my life.  

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