2016 has been a groundhog day of sorts. Every day we seem to be stuck in the same circle jerk, ultimately leading us lower to a timely and sudden death. If you are unsure of what I speak about, let’s take a peek inside your mind:
If we gap up it goes like this:
9:30 am: “Sweet, looks like we will be making some money today. The open looks strong.”
10:30 am: “Damn, we faded a little bit, probably a good time to add a little on the dip.”
11:30 am: “Why the fuck did I buy the dip?”
12:30 pm: “My wife is going to divorce me for losing our nest egg.”
1:30 pm: “Should I jump out the window or live another day?”
2:30 pm: “Ok, maybe I overreacted a little bit. It looks like we are finally basing.”
3:30 pm: “OMG, there is a God. Thank you Ramp. Thank you.”
4:00 pm: “Well the market went from up 1% at the open to down 2% by lunch to down 1% by the close. Feels almost like an up day yet all of my stocks are still down 5-10%!”
If we gap down it goes like this:
9:30 am: “God damnit, China.”
10:30 am: “God damnit, oil.”
11:30 am: “God damnit, biotechs.”
12:30 pm: “God damnit, Janet Yellen.”
1:30 pm: “God damnit, Gartman. God damnit, CNBC.”
2:30 pm: “God damnit, oil.”
3:30 pm: “OMG, there is a God. Thank you Ramp. Thank you.”
4:00 pm: “Well the market went from down 3% at the open to down 2% at the close. Feels almost like an up day yet all of my stocks are still down 5-10%!”
Even in a bear market there will be rallies. But, all of those rallies are relative to the larger decline. They make you feel like you win even though you are losing. They mess with your psyche. By the time you finally take a step back and look at the damage that was caused, you are down big and have to dig yourself out of a massive hole. Don’t dig your own grave.
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