Read a very entertaining thread at Tradertalk. It started out about sentiment but evolved (disintegrated?) into rationalizations.
The crux of it is whenever a trader is on the wrong side of the charts… ..there must be a reason.
The Bear Rationalization: Rallies are a result of Fed, ECB, QE, POMO, Repo, Twist, Dollar debasement, Goldman. Any temporary down-drafts in the markets are heralded as the return of free markets and vindication of old school TA, only to followed by cries of manipulation when the reversal occurs. Even on a technical basis most rallies are either on fumes, breadth not confirming, volume MCO lagging, VIX too low, too much complacency, overextended/parabolic, divergent, dangerously topping, three peaks and domed house, hindenburg omen, imminent pole flip, dangerous planetary combinations, et al. And when the technicals are too strong, the fundamentals which are in a perpetual gutter, are always there to help. So there is always a reason to suspect any up move in the markets
The Bull Rationalization: blaming the Fed or the ECB for not doing enough when there are major sell offs or crashes. There’s Naked shorting and no regulations and it’s all a rigged game by the big boyz. And, we can also throw in excuses like the “Fat Finger” and computer glitches and flash crashes. All sell offs are buying opportunities because there’s a lot of money on the sideline, stocks are cheap, it’s a market of stocks, I’m a long term investor, and the return on T-bills won’t beat inflation.
A really good trader named Jess Livermore once said “when the facts change, I change my mind”
Sage advice indeud
