Posts Tagged ‘confidence’

THE STOCK TRADER’S RIGHT TRIANGLE MIND-SET

Courtesy of David at Crosshairs Trader

Successful traders are successful because they have developed the skills necessary to maintain self-control when in the heat of battle.  Self-control requires confidence in the face of uncertainty (such as we find in the stock market).  In turn, an uncertain environment is best managed with focus, patience, and discipline.  Without the proper skills developed via confidence, we experience any number of self-defeating negative behaviors such as fear, desperation, confusion, anxiety, and frustration, among many others, none of which contribute to the proper mind-set… or the bottom line.

Take a look at the following right triangle.  As confidence increases, negative behavior decreases, presenting opportunities.

Confidence grows when fed a diet of focus, patience, and discipline.  As confidence grows negative behaviors such as fear, desperation, confusion, anxiety, and frustration begin to diminish in opposite proportion.  This creates a mind-set that is open to any market opportunity that presents itself.  When negative behaviors dictate action, then we are not able to think and see as clearly as would otherwise be possible.  Market opportunities are then hidden behind the negative behaviors.

The right triangle mind-set, one of confidence, is built by developing the following skills:

FOCUS: Have you ever stopped to consider how many different trading strategies there are? How about time frames for each strategy? And what about the best instrument to trade that strategy within the time frame selected? What about the indicators? Which ones are we planning to apply to the strategy? If we were to add it all up there are literally hundreds, if not thousands of strategies, just in one time frame! And what about the other traders trading one of these strategies that may be designed specifically to trade the opposite of what you trade? There is absolutely no way humanly possible to master all, or even a large number of, the strategies available to us. Therefore, we must focus on a particular strategy and become a strategic specialist. In doing so, we defeat the ego’s need to know everything, which we know is impossible in the first place.  With focus, we can think clearly about our specialized strategy knowing when and where to enter and exit the market since we know exactly what the market is supposed to look like to do either one.  This focus helps eliminate the confusion and frustration we experience when the market does not make sense (which is…
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SENTIMENT TAKES A TURN FOR THE WORSE

SENTIMENT TAKES A TURN FOR THE WORSE

Courtesy of The Pragmatic Capitalist

Investor sentiment took a turn for the worse this week as most investors became increasingly bearish.  The Investor’s Intelligence survey showed a steep 5% decline in bullishness while the AAII‘s survey showed an even larger decline of 9.7%.   Although both surveys have declined dramatically in the last week neither is at extremes:

II2 SENTIMENT TAKES A TURN FOR THE WORSE

aaii3 SENTIMENT TAKES A TURN FOR THE WORSE

Charles Rotblut of AAII elaborated on the AAII results:

“Bullish sentiment, expectations that stock prices will rise over the next six months, fell 9.7 percentage points in the latest AAII Sentiment Survey. Bullish sentiment registered 30.1%, a six-week low. The historical average is 39%.

Neutral sentiment, expectations that stock prices will be essentially unchanged over the next six months, fell 2.7 percentage points to 27.4%. The historical average is 31%.

Bearish sentiment, expectations that stock prices will fall over the next six months, rose 12.4 percentage points to 42.5%. This is a four-week high. The historical average is 30%.

Bearish sentiment has been firmly above its historical average for 14 out of the last 15 weeks. Sustained volatility in the market, continued economic uncertainty, a negative year-to-date return for the S&P 500 and low bond yields are all combining to fray individual investors’ nerves. Confidence is likely to remain fragile until investors have a sense that a bottom has been established for stock prices.”

Source: AAII & II 


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CBO Director: A Somber Warning

CBO Director: A Somber Warning

Courtesy of Karl Denninger at The Market Ticker 

File this in the "no, really?" box:

With U.S. government debt already at a level that is high by historical standards, and the prospect that, under current policies, federal debt would continue to grow, it is possible that interest rates might rise gradually as investors’ confidence in the U.S. government’s finances declined, giving legislators sufficient time to make policy choices that could avert a crisis. It is also possible, however, that investors would lose confidence abruptly and interest rates on government debt would rise sharply, as evidenced by the experiences of other countries.

So let’s see…. if you buy bonds today there’s a chance you could lose some of your money, or there’s a chance you could lose a whole lot of your money.

That sounds comforting, doesn’t it?

But it’s the next sentence that ought to make you sit up in your chair:

Unfortunately, there is no way to predict with any confidence whether and when such a crisis might occur in the United States.

Right.

This is what history tells us.  It is also what I have been trying to amplify now for the past three years.  The reason is this graph:

What I find amusing is that the CBO is flapping its jaws over only the government’s liabilities.  It, by the way, is also looking only at the debt held by the public (and not the games played with FICA and Medicare):…
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Small Business Owner Confidence Plunges

Small Business Owner Confidence Plunges

Courtesy of Mish 

Jewelry store employee with grand opening sign

Although the Fed and most economic forecasters are all looking ahead to the recovery, small business owners do not seem convinced. Please consider Economic Confidence Plunges; Low Expectations for the Holidays.

Economic confidence among America’s small business owners plummeted in November, as more owners cited serious concerns about cash flow and saw economic conditions for their own businesses getting worse. The Discover Small Business Watch index fell 12 points in November to 76.5 from 88.5 in October.

November Highlights:

  • The mood of small business owners generally has soured in November for three straight years, as economic confidence dropped from October to November in 2007 and 2008. The November 2008 index of 67.5 is the low point for the Watch since it started in August 2006.
  • 52 percent of owners say they have experienced cash flow issues in the past 90 days, up from 44 percent in October. Forty-one percent of owners say they have not experienced cash flow issues, which is the lowest response in this category since the Watch began. The remaining 6 percent said they weren’t sure.
  • 53 percent of small business owners see conditions getting worse in the next six months, up from 43 percent in October; while 19 percent report that conditions are improving, a sharp decline from 29 percent in October; 23 percent see conditions as the same, and 5 percent weren’t sure.
  • 62 percent of small business owners rate the economy as poor, an increase from 55 percent in October; 30 percent rate it as fair, and 8 percent say it is good or excellent.
  • 53 percent of small business owners think the overall economy is getting worse, up from 44 percent in October but still significantly lower than the 69 percent of owners who felt that way in February 2009, the last time the Watch index was this low. For November; 28 percent say the economy is getting better, down from 35 percent in October; 16 percent see it staying the same, and 3 percent are not sure.

A majority of small business owners think the economy is getting worse, not better. And if small businesses are not confident, then they are not hiring.

Odds are increasing that Congress will need to pass yet another stimulus package but if so, it…
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Stock Market Rally: Shenanigans Abounding

Stock Market Rally: Shenanigans Abounding

Courtesy of Jesse’s Café Américain

This is just an opinion, and it could be wrong, as all opinions may be.

To be long US equities at this point seems risky, bordering on reckless, for anything but a daytrade. And there is plenty of that going on.

The US markets in general have every mark of a maturing Ponzi scheme in the steady run ups on weakness, and the ramps into the close with the selling after hours on weak volumes.

But why?

Thursday is option expiration, a quadruple witch as we recall. September is one of the big ones, often setting up declines in the month of October. Further, we have Rosh Hoshanah beginning at sundown on Friday September 18. As the saying goes, Sell Rosh HaShana and Buy Yom Kippur.

The government is anxious to encourage ‘confidence’ to the extent of skewing the statistics to create hope in the public, the consumers. The banks are flush with liquidity, but really have no place to put it but for a minimal return at Treasury, or in some hot money trades.

Where is Goldman Sachs business revenue and profit coming from now? How much real investment banking is being done? How much M&A activity and IPOs are there to sustain it at this size, unscathed by the recent market downturns?

Obama and his team have NO credibility for reform on Wall Street after their handling of Goldman Sachs and the AIG payouts. We hear that Goldman had shopped the idea of those derivatives to them, became their biggest customer, and then managed the 100 cents on the dollar payouts from the government even as AIG became hopelessly insolvent.

Bonds, stocks, metals, sugar, cocoa, and oil are all moving higher, while the dollar sinks. Is the dollar funding a new carry trade?

The markets are increasingly the flavor of choice, and if the markets do not show a way, they will make one. Volatility is a screaming buy. Put vertical spreads are remarkably cheap.

Be careful. October looks to be the stormiest of months, if we hold out until then. The market is overdue for a correction, which can be up to 20%. Given the distance we have come on thin volume, what may make this correction shocking is the speed with which it will come.

Watch the VIX.

We remain guardedly ‘optimistic’…
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IT’S ALL ABOUT LIQUIDITY!

Have you wondered, is it true, is the rally really due to tons of money lying around with nowhere else to go?

IT’S ALL ABOUT LIQUIDITY!

liquidityCourtesy of The Pragmatic Capitalist

Is the real economy rebounding or is this just a liquidity/stimulus driven rebound? David Rosenberg has an opinion:

IT’S ALL ABOUT LIQUIDITY, ROSENBERG!

This is what we are hearing. The fundamentals take a back seat because there is so much liquidity to be put to work, and it all must go into equities. This reminds us of all the liquidity talk during the bubble peak of late 2007. The reality is that the mountain of money is no higher or lower than it was when the market was plumbing the depths through 2008 — money market mutual funds back then were $3.5 trillion and guess what? Today they are $3.5 trillion. Go figure.

So you see, liquidity is a catch-all term when nobody can really explain why the market is going up. This rally is based on a lot of hope that we are going to see a V-shaped economic recovery in the U.S. The S&P 500 is priced for 4% real GDP growth. We don’t see it. Try 2%, which is what the investment-grade corporate bond market is priced for. If we get 4% GDP growth then the equity market is fully priced, but that sort of economic expansion would take Baa spreads of U.S. Treasuries down another 100bps to 200bps, if historical relationships were to hold. But if we see 2%, then at least you will clip your coupon in the fixed-income market. The S&P 500, which at one point would have licked its chops over such a possible outcome (back when it was priced for -2.5% growth last March), would now see 2% growth as a disappointment and would correct down towards 850, again, based on our models.

I would argue that it’s all about psychology really.  As the global economy began to fall off a cliff last summer and fall investors began to worry.  When we saw some of our most prominent financial institutions vulnerable investors panicked and sold everything.  Now, we’re seeing the return of rational thinking and cooler heads.  The government has certainly helped to steady the markets, but what has really returned to the market is some semblance of confidence.  What the government needs to start worrying…
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Zero Hedge

Housing Starts Collapse Continues - Worst Annual Drop Since 2011

Courtesy of ZeroHedge. View original post here.

Well this should steal the jam out of the green-shoot-brigade's donut. Housing Starts and Permits unexpectedly tumbled in March.

Housing Starts fell 0.3% MoM (against expectations of a 5.4% rebound) and to make matters worse, February's 8.7% plunge was revised down to a shocking 12% collapse...

This is the weakest level of Housing Starts since May 2017...

...



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Phil's Favorites

Mueller report: How Congress can and will follow up on an incomplete and redacted document

 

Mueller report: How Congress can and will follow up on an incomplete and redacted document

Morning clouds cover Capitol Hill in Washington, April 12, 2019. AP/J. Scott Applewhite

Courtesy of Charles Tiefer, University of Baltimore

The release on April 18 of a redacted version of the Mueller report came after two years of allegations, speculation and insinuation – but not a lot of official information about what really happened between the Trump campaign and Russia.

...



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Insider Scoop

Uber To Sell Minority Stake Of Its Autonomous Vehicle Unit To Japanese Consortium

Courtesy of Benzinga.

Uber Technologies is planning to sell a 14 percent stake in its autonomous vehicle unit to existing investor Softbank, Japanese automaker Toyota, and auto parts manufacturer Denso ahead of its much-anticipated initial public offering (IPO), which is expected to happen in May. Though...



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Digital Currencies

5 Cryptocurrency Tax Questions To Ask On April 15th

Courtesy of ZeroHedge. View original post here.

Authored by David Kemmerer via CoinTelegraph.com,

Depending on what country you live in, your cryptocurrency will be subject to different tax rules. The questions below address implications within the United States, but similar issues arise around the world. As always, check with a local tax professional to assess your own particular tax situation.

...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Thursday, 18 October 2018, 05:33:01 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Why The Stock Market Is Heading For Disaster youtu.be/Gubf0A5pHL0



Date Found: Monday, 29 October 2018, 12:55:07 PM

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Comment: Ross Beaty: We Are Star...



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Kimble Charting Solutions

Silver Bear Market Faces Big Price Support Test!

Courtesy of Chris Kimble.

When silver, gold, and the precious metals industry were red-hot bullish in the 2000’s, investors could do no wrong.

You could buy SILVER at just about any price and it would go higher.

In today’s chart, you can see three large green bullish ascending triangles from the 2000’s that lead to big gains. But that was the bull market before the current bear market.

The tables have turned since the 2011 price top. Silver quickly formed a bearish descending triangle and fell another 50 percent when that broke down. This sent a vicious bear mark...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Reminder: We are available to chat with Members, comments are found below each post.

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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