The markets on Friday rebounded however the late plunge from the highs does not bode well for the market short term.
We are looking at a small gap down this morning but we are well off the overnight highs and are heading back to test the lows.
So its looking like more chop for the short term. Medium term however the market has a positive bias. In addition October is the transition month for the best 5 months of the year historically.
I still have not decided if I am going to go the portfolio route this year as last year was a complete failure for that technique in no small part because I jettisoned the portfolio before the system end date.(almost always a mistake). And yes I make them from time to time. I try to fashion myself like “Spock” however my human side gets in the way quite often:)
For those of you that have been following me for any length of time know that the “human” element is probably the most destructive variable to making money gambling. I have gone over it in detail over the years and it makes some interesting reading if you have the time to go back and read about it.
A good example of the “human” side getting into the way of winning is our presidential election. 1. The republican party had an easy win for the presidential election this year. All they had to do is nominate a middle of the road republican that would be attractive to the majority of republican, independent, and moderate democrat voters. But no, that was too tough of a task and 17 people ran for the nomination thereby diluting the field with the result of Trump getting the nomination. Some attribute it to just plain stupidity but that is far to simplistic. Its the human element taking victory into defeat.
Now we get to Trump who regardless what you think of him is taking a overwhelming blasting from what is supposed to be a “neutral” press. But to his credit without spending much money he manages to stay close until the “human” element trips in and he goes off the reservation with poll damaging conduct. Why does he do this when the result is known that he is going to take a hit. Human nature again at work.
So the point of all this is not to make a political statement. To the contrary I could give a solid argument for either candidate. I could give a solid argument against either candidate. Remember I have many hours in the courtroom trying complex cases. So do not infer any bias on my part either way on the election. Only take this for what it is designed to show….No matter what area you are in “Human Nature” will always intervene and sabotage success if allowed to.
Its a rare person that can control this most powerful aspect of being a human. So what is one to do? The best approach is to take life, trading and most everything else as statistical problem solving. View it perhaps as the Matrix, where to be able to reason about every day things you have to have a logical, statistical model to place it into. If you do that things will become clearer the more you get used to the process.
The mind is an interesting organ. It adapts and learns if you let it!!! Many do know let it.
Well….this is the result of no baseball to handicap this morning. My mind has gone off on an interesting tangent.
Today in the markets depending on the first 15 min or so I will be taking most breakout trades again for quick profits. Until we get a good trend to the upside I will stay in this mode.
The market moving event this week is WikiLeaks. Supposedly this is the week another document dump will be coming. If its as damaging as many are predicting (Oliver Stone) the market is going to go into a short free fall. So be aware of this event. It was supposed to happen on Tuesday but was canceled for “Security Reasons”. Looks like Assange is getting nervous. And most likely with good reason.
If we do get the news and the drop it will be an excellent buying opportunity. However the timing might be a bit tricky.
Good Luck Today
RickJ’s Handicapping Picks