I've talked before about the Emotional Decay pattern in the market.
Maybe with continued weakness in oil/dollar strength. for the next few days we will see a nice up-move, and the decay will continue. I'm talking about a decay of the Bear emotions, and a Build to a Bullish sentiment, that would make a good place to "Short".
The green and red line up there just shows negative vs Positive market... we have now established a pattern of 3 down days and 2 up days.....Will that continue? or will my trading Axiom of "Something that works twice doesn't work 3 times.
Today we had a return of the "Financials are going to kill us, it's never going to end... the national nightmare is not over."
I expect that emotion to decay as time goes on. Till we hit some Euphoria/Bear Capitulation.
But I don't want this to go on for more than tomorrow. Also, that pattern is a 5 wave pattern... but it does break some of the astrology Mojo. For those Generals fighting the last war This is how the 90 recession ended..... similar pattern over 2 months....
Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.
J. P. Morgan
Thursday, August 7, 2008
Emotional Decay.
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