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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