Clinton Lost

It has begun. Donald Trump has accumulated enough electoral votes to secure the victory and already I have seen videos of people marching through various streets of America chanting, “not my president!” Therein lies the difference between a spoiled expectancy and coming to grips with reality. Hillary Clinton lost this election more than Donald Trump won it. However, Trump is a lifelong salesman who is accustomed to asking for and closing a sale. Clinton expected the win and so did everyone who sided with her against Trump, never really asking for the sale but expecting it because the alternative was so reviled.

I am old enough now to have experienced more than a few of these Presidential elections. I was unhappy with the result in 1992 when Bill Clinton won with significantly less than a majority, and also when he repeated the feat in 1996. At no point in time immediately after those elections or subsequently did I ever mutter the words, “not my president.” I sincerely wish that the people (mostly celebrities) who threaten to leave the country, like spoiled little crybabies who stamp their feet when they don’t get their way, would actually follow up with their threats and hit the road, Jack!

A lot of blame has already fallen on the wrong shoulders. The emails did not do her in. Protectionism did not drive him to victory. I think the populous, and most of the unemployed and underemployed who have yet to recover from the Great Recession, were and still are angry that no one from Wall Street has suffered at all following a mortgage and debt catastrophe that was created inside those investment banks. To make matters worse, Hillary Clinton received several $225,000 speaking fees from those very investment banks that created the housing disaster. In the eyes of the lower middle class in this country, those speaking fees look very much like advanced bribes to continue to create more “financial innovation” while Hillary potentially looked the other way; but that’s conjecture on my part.

The “rednecks” who drove Trump to victory in their dirt covered elevated trucks and jeeps wanted a genuine outsider to go to the White House. Hillary was and still is anything but an outsider, and she downright sucks at closing the sale.

How Much Better Can it Get?

That’s what market participants and election pundits needed to be asking themselves at two significant points in this fiasco otherwise known as this summer’s election cycle. I borrowed a couple of screenshots from Nate Silver’s website, 538.com. Have a look:

augusthillarylead

octoberhillarylead

I put two arrows on the chart of the S&P500 to show exactly when Hillary Clinton enjoyed her biggest lead(s) over Donald Drumpf.

screen-shot-2016-11-04-at-11-05-14-am

As I write this today my prediction is that Hillary will win. However, I dislike the both of them.

Two Wrongs

Two Wrongs

Anyway, the time to hedge against a perceived worst case scenario was when Hillary had her largest lead(s). If Drumpf pulls an upset on Tuesday, I have no idea what to expect from the market, but my perception is that all of the hedging and/or selling has already been done.

Stay safe out there.

Attachment is the Origin Of Suffering

According to Buddha, the basic cause of suffering is “the attachment to the desire to have (craving) and the desire not to have (aversion).”

Every morning I watch and listen to a youtube video provided by a professional trader. I call him my mentor even though I have had very limited contact with him; mostly via twitter. His name is Morad and he goes by the handle “@futurestrader71.”

We are unable to let go of what has happened and to look at it for what it is.
You have to look at each day in its own discrete outcome.
Each day has a 50:50 chance of winning regardless of your historical expectancy.
Each new day is unknowable as we approach it.
Recognize that each new contact you have with the market is unique.
I am not defined by the next trade, a series of today’s trades, this week, month, etc.
Just trade your plan and stick to your risk rules.
This requires an incredible amount of self awareness and self discipline.

We spend a lot of time avoiding loss because we want every trade to be a winner.
We attach ourselves to the outcome of a trade.
Instead, we must look for a measured loss that is balanced with a profit target for every trade, and our job is to take every trade.

Focus on deliberate, repetitive consistency.
Is your execution in line with your plan?
What is your expectancy, as measured in ticks and not dollars?
If I were to walk by your desk right now and ask, “What are you working on this week, or today?” – You must be able to answer without hesitation.

This post sat in draft form while I worked on transitioning to profitable trading by way of focusing on my process. I have been successful.

Weekly Review

A weekly review that is not really weekly, nor is it much in the way of a review. I have been sitting on my hands watching a wildly overvalued market drift sideways with its price action for most of the summer. My last post on the topic is easy enough to find because I have not written much else lately that I would consider worth sharing. Here is the snapshot:

20160906SPX

I’ll describe the action since my last update succinctly as possible. The S&P500 is higher by a whopping 18 points, or 0.83%. The risk to the downside has been tremendous while earnings and economic indicators have been continuing to decline and the stock market is higher by less than 1% since July 25th.

There’s your update.
Stay safe out there.

Weekly Review, Post-Brexit

I just realized that it has been a month since I posted anything to this blog, which means that it has been a month since Brexit. The world was coming to an end, at least in the European Union, and we were on tenterhooks awaiting to see how the fallout would affect the United States and the rest of the developed world. If you look at the stock market for your barometer then all is well. Here is what has happened since:

20160725SPX

Meanwhile, the market is still wildly overvalued on a fundamental basis and I will look for opportunities to profit like the capitalist pig dog that I am regardless of what the market does.

Cheers, and stay safe out there.

Weekly Review, Brexit

A wild ride to nowhere, that’s what this year has given us. Here is the picture of the S&P500 year-to-date:

BrexitBar

From the previous weekend to Thursday afternoon the stock market was pricing in the wrong outcome of the British referendum to leave the European Union. Last Thursday night, our time, reality started to set in and the futures market started collapsing. I watched the S&P500 futures contract, the e-mini, go from a high of 2119.50 to lock-limit down at 1999 shortly after midnight when trading was halted. As the retail trading hours approached the S&P500 rallied but then the rally faded late in the afternoon to finish -3.60% on the day and sending the price into negative territory year-to-date.

Brexit

I saw the arguments from both sides of the referendum before the vote. I think the hatred that is being directed toward the majority who voted in favor of leaving is unwarranted and mean-spirited, especially when it comes from voices here in the United States where we will feel little-to-no impact from that vote; except the British Pound was devalued in the aftermath so traveling to London just got more affordable for almost everyone else on the planet who has ever wanted to travel there.

I also think the main reason that most of that hatred exists is based on one thing and one thing only, that the “leave” crowd did want more control over immigrants making their way into the United Kingdom. I was only focused on the economics of the situation. Getting worked up about it makes about as much sense as someone from another country being upset about who we elect here in the United States. Speaking of meddling in other’s affairs, have a look at this picture that landed in my twitter stream this morning (from @zerohedge):

obama tells brits what to do

I remember watching President Obama’s speech to the Brits and also the CEO of JP Morgan Chase, Jamie Dimon, having some sort of town hall discussion with the Brits, and my thought at the time was, “If the president of another country and a ceo of one of its largest investment banks was trying to convince me which way to vote, I’d tell them to fvck off.” That chart is evidence that many Brits grew just suspicious enough about Obama’s and Dimon’s intentions and what it meant for them after they received the sales pitch. Nice work, gentlemen, you may have helped convince the Brits to do the right thing, even if you think it happened for the wrong reasons.

The most disgusting thing about Mr. Obama’s speech was his idea that the Brits would have to stand “in the back of the line” to trade with the United States if they passed the referendum, as if national trade deals are the be-all, end-all of trading with another country. Nonsense. Countries may trade with each other but businesses and consumers make most of those transactions. Now we should not be surprised if other countries get more vocal about who we elect in this country or what decisions we make about our own future.

What now?

I have no idea but I suspect we will see more selling to start the week, and perhaps we will see increased volatility for the rest of our election cycle; but those are guesses. I still think the market is overvalued and looking for an excuse, so to speak, to start dropping in price to find more buyers. Clearly any buying that has happened over the last 18 months has come with just as much enthusiasm to let shares go as the market kept trying to make new highs. Here is the picture of the last 18 months:

20160624spxWeekly

Not only has the market gone nowhere this year but it has gone nowhere for the last year and half, except down and back up again. Maybe the next trip down is the one that really gets shares shaken out of the weak hands and the market trades once again at reasonable valuations instead of the wildly overvalued status it currently holds. We shall see.

Stay safe out there.