Last week in the market was an argument between optimism, pessimism, oversold, overbought, supply and demand, and cause and effect all in one.
Friday showed how VIX, and the complacency the market had felt, was far from true; instead, a pent up consolidation continued to erupt.
The market hit theoretical Dow lows Friday of 9797, only to close at 10,012, or 10,042 on the theoretical. For months Floyd has provided projections, and discussed what is called a Fibonacci retracement. This ancient mathematician used his numerology analysis to predict that from the "lowest low" of something it will rise 38 and then 63%. The market did just that and we predicted hesitancy and confusion at 10,746. We've been doing so for months. As the market reached this, and a slight step above it, we began to see the faltering. Fibonacci and chartists typically see a 10 to 20% pullback from the new 63% highest high. This would put the Dow at 9671. Friday we came very close to this bottom before ending the day, psychologically important, 10,000 mark.
“We are not human beings going through a spiritual experience. We are spiritual beings going through a temporary human experience.”
This great quote came from subscriber Johnny K, our trader with a life threatening brain tumor that speaks with me daily.
We must learn this experience as we trade. Trading is a human art, and a form of discipline.
Many of us are on a search for God; others of us believe we are spiritual beings going through this temporary human experience when we only “know what we know” and often think "that is everything.”
As traders much of our experience must be getting past what we think will occur.
Or, more importantly, what we are “theorized” is the issue.
Here’s an example:
The world now thinks Paulson’s 585 billion first bail out while the Cowboy and the War Monger were still in office was a fraud…. but when one reads what Immelt, CEO of GE, told Paulson during this time we can see his concerns of a “total monetary breakdown from the insurance derivative betting” a whole new picture begins to arise.
