Thursday, February 07, 2008

A Few Good Ideas for a Thursday

* When Selling Sentiment Can't Push the Market Lower - Above we can see the S&P emini futures and the NYSE TICK. Note the selling bouts in TICK, with raw levels in the -1000 range (blue arrows). Despite these selling squalls, prices held above their early AM lows. When intense selling sentiment can't push the market lower, we usually get a bout of short-covering, good for a short-term trade.

* The Many Causes of Misjudgment - Thanks to a very sharp trader who sent this my way. It's a must-read from Charlie Munger on "The Psychology of Human Misjudgment".

* Addictive Trading? - Thanks to a reader for bringing this NY Times article to my attention. I continue to believe that addictive trading is a topic no one (exchanges, educators, coaches) want to go near; it brings in too much business. Here's a post designed to assess possible trading addiction. Here's John Forman's advice on pursuing trading in a responsible manner.

* Biological Consequences of Stress - Excellent post from Sharp Brains on how stress affects the brain.

* Gloom, But Not Doom - Gallup finds consumer confidence in the economy on the wane.


Anatrader said...


I refer to the Market Profile post at

which indicated a Neutral Day close in the lower quadrant represents a 'free exposure trade'.

When the market opened last night, the morning's gap down open for ES did not violate its low formed during the first hour, and so the long trade looked good, but for an intra-day move.

It came to pass that buying at the close on such a day was a better strategy than buying at the open!

The volatility did whipsaw the instrument, and it really depends on one's time frame, risk tolerance, and capital to go long last night.

I was too tired to stay up for a short run,as it was past 1 am my local time, and it being the first day of the Lunar New Year.

On waking up this morning, I see my hunch of the market movements was quite good.

SSK said...

WOW!~ thanks Brett. That speech by Munger offers a lot of examples and things to ponder. Do you know the name of Bob Cialdini's book that he references in his speech? Any thoughts regarding it? Thanks agian for all you do. Steve ~SSK~

Adam said...

Brett ~

In answer to SSK's question, I believe the book by Cialdini that Munger much admires is "The Psychology of Influence." I'm a fan/follower of Munger and have heard him mention it before. I haven't read the book.

Along the lines of Munger's well-circulated Harvard Law speech is the little known volume, "Seeking Wisdom From Darwin to Munger," by Peter Bevelin. Despite a few glaring typos and its text-book quality exterior aesthetic, most strongly recommended. It's avaialable from Intermountain Books.

Intermountain also sells "Poor Charlie's Almanack ~ The Wit and Wisdom of Charles T Munger." One word review: Fabulous.


SSK said...

Thanks Adam, I will try and find both! Steve ~SSK~

Brett Steenbarger, Ph.D. said...

Thanks for the recommendations, Adam!