This is just a reflective post, no trading ideas here :-).
Today was funny. It really was. Because so many people were so sure that this thing was going to tank today after FOMC meeting and loaded up, prematurely I might add, on shorts, only to, indeed, be met with an FOMC sell off that barely brought us close to yesterday’s prices after the sizeable gap ups it had.
And I saw a lot of doom and gloom, you know, like “I just can’t bullish in these circumstances” and “there is nothing to be bullish about”. But, without getting into too much details and personal disclosure, there was a time that I was in law school and there was a time that I was doing a criminal bail hearing for a ProBono thing as part of my third year and I stated my opinion while giving my submissions, only to be told, very kindly by the judge, “No one cares about your opinions.” I believe this to be true for the market. The market doesn’t care whether you are bullish, bearish or how you feel about a stock. Nobody cares where you think the stock “should be” in 5 or 10 years. All that matters is the facts, the chart right now and the numbers. Harsh, I know, sorry!
I did post yesterday as cautionary warning that my calculations indicated an impending bullish sentiment today. And, well, it proved right on. But I mean, I learned not to doubt the math, I just sometimes am skeptical and I was today, too! Thankfully I followed and it paid off. Congratulations, to me.
This brings me to the point I want to make with this post. Whether you are a quant trader, or a technical analyst, a fundamentalist or a price action trader, your strategy should be situated in a way that your opinions don’t matter. My opinions and biases on a stock don’t matter to me or anyone else. I am heavily short biased on TSLA, but who cares? I longed it today because that is what the math said. At the end of the day, not even you should care about your own opinions, because they’re probably wrong.
You need to employ a strategy that allows you to be objective. When I ran the numbers for today, I was shocked and surprised! It was telling me bullish and I was extremely bearish! But I followed the plan because the plan works, not my biases. I disagreed with it because I too was sucked into the bearish thinking, but my plan and strategy know more than me and my opinions do not matter.
I see a lot of people got screwed today because of their biases, and they found in their strategy some way to make the stock fit that narrative. “Oh its double toping” or “Oh, the Elliot wave says this” or “Oh there is heavy resistance here” etc. etc. etc. Don’t trade your narrative, trade your strategy. And your strategy needs to be unbiased and not contingent on what you think should happen or where you think the market is going.
I equally find it outrageous when people say things like Stock A is going to go from 800 to 20 in 5 years because of some squiggly lines I drew. I won’t say more about this, because a lot of people do this, I find it so outrageous and almost offensive in its disregard for basic intelligence but I don’t want to offend more than I already have. I’m Canadian after all 😉, But let me just say, if you coming to any type of severe hypothesis that far out, squiggly lines aren’t going to be objective enough. To do that, you need to conduct a fundamental analysis on what it is you are making these absurd claims about. Otherwise, you're just stating your opinion. If you are making these claims about SPY or another ETF, that’s nuts! There is no way for you to know the political or economic situation of the world that far out! The only way that is remotely somewhat reliable is math, and even that can be kind of unreliable that far in advance because it also can’t predict the external political and economic circumstances of the time. I did a whole post on explaining bear markets mathematically. Stocks have a natural trajectory. Along the way they can be influenced by external circumstances, but they continue to follow their natural trajectory and get back on track. A stock going from 800 to 80 would be a complete derailment from their natural trajectory and require severe external influence, aside from a company stock where the company goes bankrupt.
Anyway, this is my rant/post. The key take away here is don’t let your biases screw you over! Because they will. You must remain unbiased when you are planning your trades and have a methodology that permits you to approach each trade without a preconceived narrative or idea of where the stock will go.
As for SPY, it will come down for sure. How soon? Who knows. You have an opinion on it? Feel free to share ;).
Today was funny. It really was. Because so many people were so sure that this thing was going to tank today after FOMC meeting and loaded up, prematurely I might add, on shorts, only to, indeed, be met with an FOMC sell off that barely brought us close to yesterday’s prices after the sizeable gap ups it had.
And I saw a lot of doom and gloom, you know, like “I just can’t bullish in these circumstances” and “there is nothing to be bullish about”. But, without getting into too much details and personal disclosure, there was a time that I was in law school and there was a time that I was doing a criminal bail hearing for a ProBono thing as part of my third year and I stated my opinion while giving my submissions, only to be told, very kindly by the judge, “No one cares about your opinions.” I believe this to be true for the market. The market doesn’t care whether you are bullish, bearish or how you feel about a stock. Nobody cares where you think the stock “should be” in 5 or 10 years. All that matters is the facts, the chart right now and the numbers. Harsh, I know, sorry!
I did post yesterday as cautionary warning that my calculations indicated an impending bullish sentiment today. And, well, it proved right on. But I mean, I learned not to doubt the math, I just sometimes am skeptical and I was today, too! Thankfully I followed and it paid off. Congratulations, to me.
This brings me to the point I want to make with this post. Whether you are a quant trader, or a technical analyst, a fundamentalist or a price action trader, your strategy should be situated in a way that your opinions don’t matter. My opinions and biases on a stock don’t matter to me or anyone else. I am heavily short biased on TSLA, but who cares? I longed it today because that is what the math said. At the end of the day, not even you should care about your own opinions, because they’re probably wrong.
You need to employ a strategy that allows you to be objective. When I ran the numbers for today, I was shocked and surprised! It was telling me bullish and I was extremely bearish! But I followed the plan because the plan works, not my biases. I disagreed with it because I too was sucked into the bearish thinking, but my plan and strategy know more than me and my opinions do not matter.
I see a lot of people got screwed today because of their biases, and they found in their strategy some way to make the stock fit that narrative. “Oh its double toping” or “Oh, the Elliot wave says this” or “Oh there is heavy resistance here” etc. etc. etc. Don’t trade your narrative, trade your strategy. And your strategy needs to be unbiased and not contingent on what you think should happen or where you think the market is going.
I equally find it outrageous when people say things like Stock A is going to go from 800 to 20 in 5 years because of some squiggly lines I drew. I won’t say more about this, because a lot of people do this, I find it so outrageous and almost offensive in its disregard for basic intelligence but I don’t want to offend more than I already have. I’m Canadian after all 😉, But let me just say, if you coming to any type of severe hypothesis that far out, squiggly lines aren’t going to be objective enough. To do that, you need to conduct a fundamental analysis on what it is you are making these absurd claims about. Otherwise, you're just stating your opinion. If you are making these claims about SPY or another ETF, that’s nuts! There is no way for you to know the political or economic situation of the world that far out! The only way that is remotely somewhat reliable is math, and even that can be kind of unreliable that far in advance because it also can’t predict the external political and economic circumstances of the time. I did a whole post on explaining bear markets mathematically. Stocks have a natural trajectory. Along the way they can be influenced by external circumstances, but they continue to follow their natural trajectory and get back on track. A stock going from 800 to 80 would be a complete derailment from their natural trajectory and require severe external influence, aside from a company stock where the company goes bankrupt.
Anyway, this is my rant/post. The key take away here is don’t let your biases screw you over! Because they will. You must remain unbiased when you are planning your trades and have a methodology that permits you to approach each trade without a preconceived narrative or idea of where the stock will go.
As for SPY, it will come down for sure. How soon? Who knows. You have an opinion on it? Feel free to share ;).
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