Bedrock of Optimism

Risk and Reward Hope Ratios

It is generally accepted in all quarters that optimism is the one best underlying quality leading to successful strategies when competing with hope and risk in the markets. 

Charts are cool

Once Charts were Considered Craziness by Many

Then Computers Released Them

Charts' are cool but the tape is hot. It is hot because it is moving, even when prices are identical. It is instinctive, we watch anything that moves even as do all organisms.

There is nothing like a chart to bring everything into perspective. A good chart will show where price congestion is, the support and résistance areas. 

The best charts are candlestick charts, used in Japan more than 500 years now. They show the opening and closing as well as the high and low price and whether it was up or down at the close and the open. Shown is a Stockcharts.com chart of Apple. These are the best charts I've ever used. 

Charts developed, from my understanding, in the U.S. are called point and figure charts. The Xs are up prices and Os are down prices but only if they have made at least a three point change. P&Fs are also good, like candles, showing congestion and support/resistance areas. 

The worst thing one can do, in my mind, is to use decimals as in dollars, instead of charts. Fractions are best and are being brought back I've been told. The reason fractions are best is that they take the awareness of money (meaning fear and greed) out of price movements.

Attracting weak hands

Always two sides to the market 

Up markets attract weak hands. Nobody can buy unless someone sells. This is so simple it is odd so few understand, or so many forget it. Thinking in terms of the crowd encourages that. Better to keep your own book.  

Weak dollars usually means stronger stocks.

Rounded out small position since I am bullish and investing for  dividends. I am no longer in growth, but market looks sticky from my view as it is nearing the resistance area where market broke down last year over the pandemic. Still, not selling so it looks like greed is alive and well. 

Patterns point the way...

 Charts, from my experience, used to be held in total disregard in all quarters, mostly I think by brokers. Today there are more charts and systems flying around than anyone could conceive. The smell of money does things to people. It is not just money, it is more money. It is a way they keep score.

Unfortunately for me, I never had an adequate desire for more than I could use at the time. Later, I would regret that. But I am now used to a restricted life style. Success can destroy your privacy.  Privacy is worth more than mere money anyway. How can one have a frank discussion with someone if servants are hovering over you?

But I got off my track. I'll have to try again another time. Sorry about that.

Gridlock equals goldilocks

Charts tell the truth

From what I can make out of things as they stood, at least recently, is that the market sentiment believes the Republicans will win the Georgia run offs. This will mean gridlock. That means certainty, And certainty means trading will proceed without sidelong complications to suddenly upset the market.

Nothing More Meaningless Than Old Chart

Alto market views normally look six months out, the view six months out can change on a dime. Of course, the vaccine is providing a lot of fuel for the upside. My view is that widespread fear will direct more money to dividend payers. That is my view naturally, because I am in a list of dividend payers. 

Weak Hands Trader

One trader on television, upon asked what he was going to buy said, innocently faced, 'Oh I can't tell you, I haven't bought it yet'. Then he will presumably reveal that since he is holding stocks is no longer buying, and is therefore a seller. Hope no one is surprised?

Decimals are hot....

Trading in the age of fractions was easier than today because when I realized how much money an eighth of a point was in decimals it brought out beads of sweat fractions never did. 

Fractions were cool....