It's in "psychology" because it involves denial, delusions of grandeur, and tunnel vision. This may eventually be the mother of all tops. There has been NO day since 2003 when the S&P has moved 2% in either direction. The quiet before the storm. Rising wedge is a fairly reliable pattern, and bearish at that. VIX will eventually be a reliable indicator again. Earnings growth has peaked. "As General Motors goes, so goes the economy" an adage from the 1930's Change of guard at the Fed. Hmmm. Bernanke would make a good fall guy. Inflation will resume. Massive debt on federal, state, municipal and consumer debt will have to be inflated away. Corporations in genreral are flush with cash relative to debt loads. No where to put it. Hmmm., buy backs? Initiate dividends? Flat yield curve. No premium for holding 28 more years I could go on (and have a feeling I eventually will) but to use a rough analogy, the Dow first hit 1000 in 1966. Repeled off it more than once (including the go go years and a stagnant war) and didn't successfully breach it until August 1982. Secular
GM smee em. any company that gives away products then later says 'in hindsight that was a bad move' doesn't mean a thing economy wise. they were screwed regardless of economic conditions but yes things are shaping up for a rough 06.
"It's in "psychology" because it involves denial, delusions of grandeur, and tunnel vision." Are you talking about the bears ? Who is in denial here ? Market has been going up since 2003. So if you are a true bear you missed out on the rally or worse lost money. All the things you say may be true or appear so for the time being but it doesn't matter if the market goes up. And btw wedges are no more reliable than head and shoulders and double tops. They often simply don't work hum as expected... to the bear's great dismay. As I said even if the market made a top here, bears would STILL be wrong. The bears thought the market would stay down or go lower .
Foremost, why did you start such a topic in a psychology forum? I always have both long and short positions. That doesn't make me a perennial anything. I'm not interested in being right or wrong. Those adjectives are the results of my endeavors (and errors) in striving to extract profit.
This is not a so much a thread about the future direction of the market as it is a thread about the psychology of the bears- not just the perennial bears- but all who short stocks for other reason than pure hedging purpose more often than they should. The traits that spell failure for long term bears are the same that often cause debilitating losses to traders. The danger of not recognizing the urge of trading against the natural upward bias of stocks- often because one missed the move- is a problem traders rarely discuss , the preposterous argument that one has to play both sides of the stockmarket to be successful takes over.
WOO HOO !! what a day in ER2! any bears left ? it sure looked ugly yesterday didn't it? no bears aren't always wrong but today they were on the wrong side btw I love this quote from Niedrhoffer http://alternative-investor.net/
"the preposterous argument that one has to play both sides of the stockmarket to be successful takes over" Why is shorting preposterous? Last time I looked at a stock chart, prices went up and down. So from your logic, trying to take advantage of a downward movement in prices is preposterous. I guess guys like David Rocker are preposterously rich. How ridiculous of them. Aren't you the same guy who had his panties in a knot on Monday night because the S&P futures were down over 10 points? What exactly is your point? Do you even trade?