Yesterday I sold and closed all my long position in the face of a massive upturn and I myself doubted my action. But in the end, we have to follow the methods and rules and not be ruled by emotions. Stock market is almost like playing a game of Texas Hold’em. We have to keep the nerves and win. It was a good call to sell yesterday and I got a better entry price today apart from locking in the profits. I immediately Twitted my readers; http://bbfinance.blogspot.com/2011/12/trading-journal-december-20-2011_21.html . By the way, did I tell you that today was a massive T bill sale by the Fed, the last one for the year?
Also, yesterday I wrote; “Do I think that the rally is over? Heck no! There is more to come. But as of now, the index is over stretched beyond imagination. Like the elastic band, it has been pulled too far too soon and it has to come back to equilibrium before it can start its journey again”. Exactly that is what happened. The markets came down, correct the overbought situation and allowed us a better entry. Thank God for such mercies!
From the SPX hourly chart you will note that it reversed from the 23.6 Fibo retracement area.
So which stage of the market sentiment are you now? I think most are somewhere near “See, what did I tell you?” stage. People still don’t believe in Santa! And that disbelief is after years of parental guidance about the yearly gifts that Santa brings in! Really, such a lack of faith! I am shocked, shocked.
OK, you don’t believe in Santa, but do you believe in the greed and manipulative power of the TBTF banks and money managers? Don’t these poor fellows deserve some yearend bonus for beating the index? Come on guys. I would like to show you a follow up on the analog which I posted on Monday, December 19. This is courtesy Eric Swarts of Market Anthropology. May be now you will believe in Santa or the money managers or both!
Now I am back in my long position and I don’t have much to do for the next eight days. So I can get on with my life doing things that need to be done and enjoying the spirit of Christmas. I travel a lot and in the next few days I plan to write my take on various European countries. I would appreciate very much if you, my dear readers, also participate and send your comments and experiences. Writing about the European countries would be fitting end to this year, which has been consumed by all things European.
I also would like to write about the four horsemen of the apocalypse. Those, who are constantly beating the drums of impending doom. If GS and other TBTF bankers wanted to buy cheap and sell high, they could not get any better help. These doomsday drumbeaters have created such a fear psychosis that every rally is a sell and the end of the world is round the corner. Even a broken watch is right twice a day. These folks have been predicting doom since 2008/9 and every time there is a major correction in the stock market, they jump to it and proclaim victory. I am sick of these people. Why don’t they accept that stock markets go up as well as down and when the stock markets go down, it is of no particular credit to these doomsday soothsayers.
Wish you all a happy Hanukkah. Hope you are enjoying the market commentaries. Once again, thank you for following me in Twitter.(@BBFinanceblog) I know lots of you have great following, so please retweet to your friends and followers. Let more people benefit. Visit http://bbfinance.blogspot.com/ regularly and profit from the World of Finance.