I have never made two bones about the fact that picking market tops or bottoms is a hare-brained exercise in futility. It’s for retail jackasses who enjoy racing downhill in oversized shopping carts. That said, in my never ending quest for market domination I may have come across something that may actually have some use for you chronic BTFD addicts.
A funny thing happened on the way to the recent Federal Reserve board meeting. U.S. treasury yields fell despite the latest policy meeting minutes showing that it was preparing to taper bond purchases before the end 2021. Apparently after years of dangling the specter of a more hawkish stance market vigilantes are finally prepared to call the Fed’s bluff. As the saying goes: Don’t ever bullshit a bullshitter.
Diminishing returns, also called the law of diminishing returns, describes the phenomenon when increasing production or an increase in effort results in progressively smaller, i.e. diminishing, increases in output or results.
It has become my sincere belief that the worst market environment for retail traders in fact are low volatility bull markets. Yes you read that right: NOT high volatility bear or endless sideways markets – it’s low volatility bull markets that wears the most on them.
I’m well known for my ability to take a punch from the markets… but I gotta say… boy oh boy, the last few months of crypto trading have left a few marks. And it’s not that I haven’t been through the wringer many ties before, so I sort of knew what to expect. But it sucked big time, not gonna lie.
A dam breach is considered a catastrophic event and when one occurs in this day and age you rarely ever hear the end of it. Everyone’s focus is suddenly on the underlying reason for the dam’s failure and of course who or what is responsible.
A few action items came up over the weekend and rather than writing a longwinded post I decided to put together a video for your erudition. Since I have a face for radio I never really enjoyed filming myself but I think I’m slowly getting the hang of it.
When analyzing a market the most important consideration is whether you are looking at a trend (up/down) or a trading range.
Who wins a race? Not a fair race though, rather an anything-goes if you ain’t cheating you ain’t trying hard enough kind of race. Probably the guy who leaps first, all else being equal, right? So you get advanced warning on who the BIG winners are going to be because they take off early and they are relentless in fighting for the win.
Look it’s not your fault but you are doing it all wrong. Don’t feel bad, it’s simply that nobody ever taught you how to do it the right way. No I’m NOT talking about that thing your spouse complained about the other day – your secret is safe with me. I’m talking about trendlines and specifically the right way to draw them. And how to profit in the process of course!