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Tackle Today: The Nightmare Before Christmas 🎄

December 18, 2018

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≈ Santa Claus is not coming to town. ≈

Bad news + Market is up = Strong market › The Bulls are in control.

Good news + Market is down = Weak market › The Bears are in control.

Only a few things in life are certain, like death, taxes and the affirmation above.

Market participants don’t look into the past to find solid reasons to sell or to buy. They look for neither strength nor weakness in the lines written in the Book of Life.

However, they don’t look into the future either. By nature, the future is… well, the future is opaque, it’s never landed, it is no matter, it’s not in the elemental chart.

So how do market participants make their decisions?

Let’s say they work on the edge of tomorrow. They see things that are about to happen, things that must happen or are already happening and no one is seeing yet.

Financial markets are a complex system: millions of participants (including robots), multiple variables and uncertainty plaguing on each and every corner.

“I got my bag, run right home
Then I find I’ve got the number wrong.”

— One after 909 (The Beatles) —

There’s nothing wrong in being wrong, as long as you diversify, buy insurance against your own convictions, and acknowledge the fact that you can be wrong.

These simple rules kill overconfidence and keep you in the game whatever the market goes.


Chart of the Day

A WORLD GROWING APART

Coach Mark wrote yesterday about the world not growing in unison. Here’s how much apart countries are growing (or shrinking). (Source: IMF & Signal)


Video of the Day

Exiting Adjusting or Hedging a Bear Call Spread gone bad

Coach T answers a question on how to handle a Bear Call Spread that is moving against you.


Today’s Lineup

TALES OF A TECHNICIAN

The Nightmare Before Christmas

If you’re wondering if we’re in a “bear market,” we are. If you’re wondering when it will end, nobody knows. If you’re wondering where Santa Claus is, stop it. He’s been eaten by bloodthirsty and unholy bears. And that means his rally likely isn’t coming. Unless, of course, Jerome Powell spontaneously sprouts a beard ala The Santa Clause and releases a flock of doves tomorrow.

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