I've pondered in the past how much we really know ourselves, or each other. Real-life heroes, for instance, seem to me to be born that way, and fate provided an opportunity for them to do something extraordinary that most people wouldn't do. The person who leaps between the subway tracks and puts his body over a child who fell down there wasn't necessarily trained to do such a thing. I don't think there's anything specific to their gender, ethnicity, racial background, or anything else that drives them to behave heroically. In that split-second, where most people's desire for self-preservation would have held them back, some individuals choose to do something with what we might describe as a very bad risk to reward ratio.
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Trading In The Matrix (by Market Sniper)
Most are familiar with the movie series The Matrix in which reality was totally divorced from perception. I believe we are faced with the same situation when we, as traders, engage the markets now.
Formerly relatively free markets have been replaced by The Matrix. Markets that, over a long period of time, reacted to fundamentals and over shorter periods of time reacted to supply and demand factors no longer exist. All of that has been replaced by The Matrix leading some to even question the validity of technical analysis.
Does it not seem that what used to work fairly well no longer does? Or works so sporadically as to call the usefulness of what we used to do into question? Does volume matter with the advent of dark pool trading and high frequency trading (HFT) machines? Does it seem that things no longer trend well at all? When you do identify a trend, it tends to end abruptly? Seeing a lot of chart patterns that used to work well fail more consistently than leading to the next technical expectation as to direction?
Playing It Dangerous(er)
I wrote in the post last night about how I was taking a conservative approach, having gone long five ETFs as a hedge (DBC, USO, XOP, SLV, TBT).
Well, these hedge positions did the two things that hedge positions usually do for me. Specifically:
(a) Jack; and
(b) Squat
I lost money on all five longs (and did so pretty much instantly at the open). Sometimes I wish, as a bear, I was a pure bear. This "long" business is for the birds.
A La Mode
Yesterday, while I was watching every asset class on earth explode higher, I was in Don't Get Killed mode. Given the fact that the bulls completely and utterly dropped the ball by this morning, I went back into the mode I greatly prefer, which is How Can I Make the Most Money.
In spite of that, I'm still playing it safe. I covered my large short positions, and I'm presently only about 35% committed with the rest in cash. I do have 20 new positions that are a single mouse-click away, which will goose me up to 50% committed, but I'm in Wait and See mode (who knew I had so many modes?) since for this particular moment – we might be shoring up for somewhat higher prices intraday.
The good news for me is that this whole Spanish Bailout was about as hugely successful as the Facebook IPO. This might be a sneak preview of the bearded one's announcement next Wednesday, which might – – as with Spain – – could turn into a very fadeable non-event.
Fear the Top of the World
Last Sunday, May 20, I read that in the span of three days, Mark Zuckerberg:
1. Took his company public, making him one of the richest men in history;
2. Saw his fiancee get her medical degree from UCSF;
3. Married the aforementioned fiance in a surprise wedding ceremony in his back yard, which is located just a few blocks from my own home.
As I read this, I confess I felt a little worried for the guy. But, wait a second, why would I worry about someone blessed with such amazing good fortune? Simple: because of all that amazing good fortune, particularly given its abundance and speed.
I guess it's the contrarian in me that worries that any situation which is so extreme is bound to reverse and at least revert to the mean (this same disposition gives me optimism when things seem awful).
And, even in the one week that has transpired since the trifecta cited above, we have all witnessed Facebook's value plunge by about 35%, and you know as well as I do that a mountain of shareholder lawsuits are bound to follow (particularly since, let's face it, the low price for the stock is probably a long, long way from here).
I seriously wish Zuck well in his marriage and his life, but whenever everything is coming up roses for someone, you should probably worry about what's next. It's sort of the "magazine cover curse" writ large.
