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The Futility and Stupidity of Permabearism

Now that I’ve written this headline, the contrarian in me recognizes that this is probably a sure sign that we’re in a major top. But I need to get this off my chest. If you know me, there’s nothing new here. You’ve heard me moan about this for years. But if you don’t know me, here’s my beef. Again. 

Look, I’m a born bear, ok? You all know that. But these permabear analcysts who fight the trend every step of the way, constantly complaining, are missing the point.

Don’t fight the Fed!  Don’t fight the tape! Aka, “The trend is your friend.”

We all learned that shit in third grade. Rule Numbers 1 and 1A.

I mean WTF people! There’s money to be made. Who cares what direction!

And don’t give me this shit that TA doesn’t work.

I saw somebody write yesterday that traditional TA no longer works.

BULLSHIT.

There are many methods of TA, but the oldest and best known is trend following. How fucking hard has it been to follow this trend? OK, maybe not in March at the bottom, but the bigness of the turn was patently obvious within a few weeks, once the trillions in QE kicked in.

In TA, we always need to be aware of context. In this case, context means what the Fed wants. Because what the Fed wants, it gets. The Fed tells us what direction to go. The charts are the roadmaps.

The point is that THERE’S MONEY TO BE MADE. Maybe not long term investing wise. But swing trading? Day trading? ABSOFUCKINGlutely. My swing trade chart picks in Technical Trader using my brand of TA are doing just fine, thank you. Picks that go both ways, by the way, although there have been far more longs than shorts for months and especially in recent weeks.

Meanwhile, as I semi self quarantine here in Croatia (where I decided to stay last Spring when the US Government panicked and told all travelers to get the hell home), I’ve had a lot of time on my hands. So I’ve been building a personal day trading model.

Simply by watching intraday technical indicators using common technical rules and some semi esoteric indicators that I like, yesterday I set up 9 long trades in the afternoon between 2:33 and 3:00 PM. I set both the buy and sell side triggers based on a TA trend following technique using a type of moving average, adjusted to my taste in timing. I won’t go into the details for obvious reasons.

About 40 minutes later those sell triggers started to get hit. One after another. Kaching, kaching, kaching. By using TA I made enough coin in 45 minutes to take the rest of the week off.

OK. I’m living in Croatia, and it’s cheap here. 😄

But my point is simply this. To all you bear side analcysts, cut the shit that TA doesn’t work. Quit making excuses. Rules Number 1 and and 1A still apply for the long term. TA still works in any time frame. Being a permabear and complaining about how unfair it is all the time, do not work.

There are guys who have missed the entire secular bull market since 2009. You know who they are. If you know the Fed’s rules, and we all do, then what possible sense is there to fight them? It’s fucking moronic.

That said, I hope the market breaks today and stays broken. It’s much more fun making money on the short side. Those were joyless profits I took yesterday. It feels dirty to play on the side of the scumbags running this shitshow. But it’s just dumb to fight it. If you can’t beat em, join em, right?

Maybe I’ll be late by a week or 3 in recognizing a major turn, I don’t know. But it does not matter if we’re a couple days or weeks late. Good trade management rules will limit losses, and also help us recognize when conditions are, in fact, changing. If good bullish setups start failing in droves, that tells us something.

In due time, the indicators will turn, when “in God’s good time, the New World, with all its power and might, steps forth to the rescue and the liberation of the old!” 😁

And I can promise you this. When they do, I will be there to shout it from the mountaintop.

Go bears!

But play to win. Take what the fucking goddamn Fed driven market gives you.

And now, a word from our sponsor.

Bullish Signals Abound

Scheduled liquidity data has told us for a couple of months that October would be bullish. That played out like a charm in terms of the technical analysis last week. We also know that liquidity only gets more bullish this week. The technical picture confirms that outlook. We must give the bullish factors the benefit of the doubt.

My stock pick screens confirm that. I’m adding 7 picks from those screens this week, 5 long and 2 short. That will leave 13 open picks, including 11 longs, and the 2 new shorts.

Four chart picks were stopped out last week. Needless to say, all were shorts. The two older picks had nice gains, partly offset by small losses in the short side picks from last week.

The list performance improved sharply last week as the average holding time increased a bit. Gains doubled from an average 3.2% to an average of 6.4%. The average holding period last week was 20 calendar days, up from 17 days the previous week. The average holding period has ranged from 16 to 22 days, or just over two to three weeks.

Technical Trader subscribers, click here to download the report.

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Past performance doesn’t indicate future results. There’s always risk of loss. Chart picks are for informational purposes only. These reports are geared toward professional investors and experienced individual traders. Do your own due diligence before trading.

Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also publish LiquidityTrader.com, and was lead analyst for Sure Money Investor, of blessed memory. I developed David Stockman's Contra Corner for Mr. Stockman. I’ve had a wide variety of finance related jobs since 1972, including a stint on Wall Street in both sales, analytical, and trading capacities. Prior to starting the Wall Street Examiner I was a commercial real estate appraiser in Florida for 15 years. I was considered an expert in the analysis of failed properties that ended up in the hands of bank REO divisions, the FDIC, and the RTC. Remember those guys? I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. I'm not some Ivory Tower academic, Wall Street guy. My perspective comes from having my boots on the ground and in the trenches, as a real estate broker, mortgage broker, trader, account rep, and analyst. I've watched most of the games these Wall Street wiseguys play from right up close. I know the drill from my 55 years of paying attention. And I'm happy to share that experience with you, right here. 

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