New Year’s Eve is the absolute worst night to party, even when I wasn’t a boring old fuddy duddy. Someone always gets too messy; things are always double-priced and getting home always sucks. So, I just don’t do it anymore. And as a consequence, I love the 1st of January. Truly my favorite day of the year.
Without getting all soppy, I’ve been thinking about some interesting stuff I read in this article about failure. It’s about how you can predict future success from the way people fail in their previous ventures. Apparently if you dust yourself off and have another crack immediately after failing, and learn from it, you have a far better chance of succeeding in the end. Waiting before making another attempt is a strong predictor of failure. And truthfully it is our failures that shape our character, not our successes, anyway.
Few of you know, but when I was a scumbag, I was successful at it. I learned not a damn thing from winning at life… but struggling through my many failures turned me into a better version of myself. And when I think about my failures in trading, except for my early embarrassingly stupid ones, I was sequentially moving in the right direction the whole time. Firstly, doing real system trading. Then learning how to build objectively good systems. Then learning to trade them mistake-free. Then building better and better systems. I don’t know if there’s anything useful you can take from that, but if, like me, you were stuck for a long time in a stage where you were actually pretty good, but still not consistently profitable, maybe assess your progression in failures. I guess what I’m saying is that if you are stuck at a point where you know enough that you SHOULD be making consistent money and you aren’t… now is the time to do some deep reflection on getting past that sticking point.
Enough of that, I know you want to see charts. Today I’d like to do something different and cover YEARLY charts of a couple of markets. Buckle up! The first chart I’m really excited about is Gold.
You can see clearly, we are in a secular bull market since 1976.We have just completed a 5-bar pullback, and the last three consecutive years price has been unable to break the yearly low. Unequivocally bullish, especially with the triggered RTV pattern.
The other thing that jumps out is the lack of a blow off top indicating that there is a decent probability of another leg up.
The big deal is that the stock markets all painted the same bar. Open at the lows, close at the highs, expanded range.
Anytime you see that shape of bar, especially after a pullback, the odds of continuing gains are very high. The stock market has tipped its hand. The powers that be are going to pump it. Rates are going to stay near zero, and the Fed is going to throw gasoline on the fire. From a fundamental and technical perspective, the highest probability narrative has become clear. We are looking at a final glorious fling of the bull market to sucker all the boomers that cashed out in ’08. Markets like this don’t end because they are overbought; they end when everyone has piled back into stocks. The next crash will likely be one for the record books, but for now, the music is playing, and you ought to be getting up and dancing. Sigh. It straight puckers my butthole to buy stonks at these inflated levels.
All the absolute best for the coming year.
Scott
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