Lady Market and Intangibles – October 27, 2011

[Billy]

Forum Clusters 111027.xlsx

“Again, I’m just a trader…so what do I know? I would prefer a REAL market with REAL stock setups and REAL leadership, but for now, we simply have to make adjustments based on the intangibles and take what the market gives us. It’s what keeps this game interesting, right?”Joe Fahmy - http://joefahmy.com/2011/10/25/plunge-protection-team/

Don’t miss this latest blog post by Joe Fahmy. It suggests to me that being a disciplined trader (like the robot) is not bound to be much rewarded for a while… Intangibles are just too numerous at present but absent from any rational and historical framework of lessons learned from the past.

I’ve spent 30 years doing my best to become a consistent and profitable trader. It’s been all about systematically practicing good professional behaviors. Lady Market taught me to only try to kiss her when there was a high probability to be welcome, when she was in the mood and well positioned (setup) and near the exits in case she would turn suddenly angry at me.

Today, only bad behavior is rewarded. You just rush in impulsively, forget about all the rules and make a million overnight for raping the girl! Oh yes, Lady Market is not herself anymore, she’s become the toy of liquidity manipulations, intangibles and politicians.

The Brussels accords have, once again, just bought some time for rewarding more bad behaviors.

IWM is now in a position to go testing the 200-day moving average (77.89). Weekly R3 (75.90) is within easy reach with light floor selling pressure. The robot will respect his code of good conduct and stay in cash. Make your own discretionary adjustments if you wish to take what Lady Market is giving right now, but don’t fall in the trap of believing for one minute that she will be a good teacher for your future trading practice.
Billy