During my time away it didn’t escape my attention that you guys very much enjoyed Scott’s excerpts on tape reading. As you all know I am very much a systemic trader at this point but at the same time still enjoy following a variety of charts on a discretionary/analytical basis for three reasons: First I happen to be good at it as my thinking process follows a mixture between the analytical and the creative. Second it gives me opportunities for campaigns I would miss out on just focusing on my systems. Third reading the tape actually gives me ideas for building new automated systems. For all these reasons and more I decided to do one post exclusive to tape reading every [...]
Trying to predict what the stock market will do is for dumbasses. A proper analysis of the big name stock tippers and analysts shows that they are all significantly worse than random.
This is a spreadsheet built by Tim Knight tracking Gartman’s predictions, running at a 22% correct rate for the year. What Tim fails to mention is that his own predictions are every bit as bad.
Predicting markets sucks, and it induces a whole bunch of mental baggage where we make a prediction and all of a sudden want it to be true. We cheer it on like a horse at the track.
There is a bug in our mental wiring where we only remember the correct calls and cannot remember the [...]
Like dominos, one by one, the doves at the Federal Reserve appear to have fallen over the past few months. The final and most important one is widely expected to at least tilt a little later today at 1:00pm when Fed chairwoman Janet Yellen is scheduled to deliver her much anticipated speech. Equity markets have responded accordingly which brought a final end to one of the longest lasting rallies in which I had the pleasure of participating in my trading career.
A slowing of the trend in the S&P 500 over the past few sessions has evolved into a more pronounced sell off overnight, and by the time you read this my ongoing E-Mini long campaign may have already met its maker. And that would be perfectly fine as we’ve been riding this rally way beyond expectation. And I mean that in a strictly technical sense and not an emotional one. A 3R or 4R winner is considered a very good run these days, especially given the increase in intra-day volatility over the past few years. More than double that should always be considered the rare exception, rather than the norm. That fact of course does little to prevent most retail participants from [...]