I feel most investors/traders are suffering from recency bias and therefore expecting some kind of heavy pullback following this steep rally from lows. The problem with market data is it allows ones bias to perceive it in any manner. In just 1.7 years QQQ has rallied a staggering 85%, the data point most perma bears use to warrant their decision making, yet in the past 2.8 years we are only up 18%. So was the sell off simply unwarranted and in reality we’re just at the beginning of a bull market, or have we rallied 85% from fair value levels. A few of the traders I like, and there aren’t many, are calling this the most hated bull market ever as most are under-positioned and/or missed the move completely; I agree.
The problem is, we have no real leading theme, price action that’s just in a constant mess, data points contradicting each other and heading straight into an election.
For my style the conditions are overall terrible with the odd opportunity here and there. So I need to remain extremely laser focused on those opportunities and not sway nor get distracted.
As I posted last week, the best way to achieve this is to avoid intra day charts as much as possible.
As traders we often find it hard to accept when conditions do not favour our edge, it gets somewhat boring and feels unproductive. As Jessie Livermore often said “The money is in the sitting”, yet that’s the hardest part. Allowing current trades to work and waiting patiently for new trades to set up/arise.
My thoughts over the past few weeks still haven’t changed and therefore there’s little to update on.
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