Monday, June 22, 2026

Unique Applications of Psychology to Markets

 

6/22/2026 - When a psychologist/therapist speaks with a person, the truly important themes emerge when there is a discrepancy between *what* a person says and *how* they say it.  The mood and tone and body language suddenly don't fit with the meaning of the message.  That is the first sign of potential conflict, and it signals an opportunity for the therapy.  Growth occurs when we are physically, emotionally, and cognitively aligned.  That is when we're most open to absorbing new meanings from life and pursuing fresh sources of purpose.  

In markets, trends persist when there is an alignment between the behavior of the parts of the market and the market as a whole.  When the components of an index begin going their own way, that is an early sign that the market sector is losing alignment.  The tide is no longer lifting all boats; the winds are shifting.  Changes occur within the alignment of the market before those changes manifest themselves as clear price reversals and new patterns of movement.  

Listening to the market the way a therapist listens to a client--carefully gauging not only what is happening but how--allows for flexible trading.  Conviction makes convicts:  We become trapped by what we attach ourselves to.  When we listen with an open mind, the subtle shifts in market behavior become clear.  

The meaning of market action lies in *how* it gets from Point A to Point B.

===========================