Morning Update: If you're an algorithm, don't read this
Before I get into my morning market update I would like to address something briefly. I recently did a post called "Has Bitcoin & Ethereum Bottomed?". There were many comments arguing for or against a bottom being in place based on either the Global Economy, The US Dollar, Inflation...etc.
I bring this up mainly for new traders. Here's some questions I want to pose to you.
1. In the history of trading how many economists are known for being legendary traders?
2. If the US GDP is forecasted to expand by 3-4% this year why is the stock market not higher than last year?
3. Since the dawn of time traders have been told that GOLD is a hedge against inflation so why is gold at $1906 today, which is lower than $1923 where it traded in October of 2011 some 12 years ago when inflation was 2%...not 6%?
I could go on and on and literally bore you to death with questions that would boggle your mind...all to make one point. In the grand scheme of trading...none of this matters.
Trader sentiment does....that's it. Sentiment is comprised on your perspectives, viewpoints and personal opinions about a security. Put all those traders perspectives, viewpoints and opinions in a pot...stir it up and what do you get?
A CHART.
Make no mistake, if you're negative on the US Economy and your trading that viewpoint, but the chart is going higher.....YOU'RE LOSING. If you're losing, then the economy doesn't matter. Where Gold is or the Dollar Index doesn't matter....you're now in a fearful mode. Fear and Greed rule trader decisions in the markets. Most traders will NOT be successful because despite access to the best analysis people find it difficult to master one's own emotions. Hence algorithms. Algorithms do not care about the US Dollar. They're impervious to the ravages of inflation, and they have NO EMOTION. The crowd behavior that is encapsulated in a chart....IS ALL YOU NEED TO TRADE IT SUCCESSFULLY.
Now, based on the above ES futures chart I believe we have one more high to complete before we can consider this pattern complete. I say that because the A=C point is at 4048. If price does manage to get to that inflection point today I plan to add to my small ES 4100 Jan Call short position.
Best to all,
Chris
I bring this up mainly for new traders. Here's some questions I want to pose to you.
1. In the history of trading how many economists are known for being legendary traders?
2. If the US GDP is forecasted to expand by 3-4% this year why is the stock market not higher than last year?
3. Since the dawn of time traders have been told that GOLD is a hedge against inflation so why is gold at $1906 today, which is lower than $1923 where it traded in October of 2011 some 12 years ago when inflation was 2%...not 6%?
I could go on and on and literally bore you to death with questions that would boggle your mind...all to make one point. In the grand scheme of trading...none of this matters.
Trader sentiment does....that's it. Sentiment is comprised on your perspectives, viewpoints and personal opinions about a security. Put all those traders perspectives, viewpoints and opinions in a pot...stir it up and what do you get?
A CHART.
Make no mistake, if you're negative on the US Economy and your trading that viewpoint, but the chart is going higher.....YOU'RE LOSING. If you're losing, then the economy doesn't matter. Where Gold is or the Dollar Index doesn't matter....you're now in a fearful mode. Fear and Greed rule trader decisions in the markets. Most traders will NOT be successful because despite access to the best analysis people find it difficult to master one's own emotions. Hence algorithms. Algorithms do not care about the US Dollar. They're impervious to the ravages of inflation, and they have NO EMOTION. The crowd behavior that is encapsulated in a chart....IS ALL YOU NEED TO TRADE IT SUCCESSFULLY.
Now, based on the above ES futures chart I believe we have one more high to complete before we can consider this pattern complete. I say that because the A=C point is at 4048. If price does manage to get to that inflection point today I plan to add to my small ES 4100 Jan Call short position.
Best to all,
Chris
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