Bullish herd mentality, h/t B. Rich / Hedgeye
“Irrational behavior is, ironically, the most predictable behavior.”
— Chris Carolan, @spiralcal
The human behaviors of buying and selling drive market price movement. Human behavior is often emotional and a herd mentality can kick in.
Market price tends to climb a “Wall of Worry” and slide down a “Slope of Hope.”
You saw it last week, the previous week, and you’re seeing it this week. You’ll likely see it over the weeks ahead, as well.
Geodesic dome, h/t R. Buckminster Fuller Estate and bfi.org
“I’m not trying to imitate nature. I’m trying to find the principles she is using.”
— Buckminster Fuller
Often, patterns of market price movement resemble fractal patterns found in nature.
The thing for traders to keep in mind is that there is never certainty, only probability.
I hope your week gets off to a bright start.
“Point drops in any index, be it the DJIA or the S&P 500, are meaningless. All these ‘3rd largest (point) drop in history’ stories are meant to mislead and scare you. Don’t let them. The only thing that matters is by what percentage did an index or stock decline or advance.”
— Jim O’Shaughnessy, @jposhaughnessy
“For technicians, there’s one thing to remember. If prices are going up, there are more buyers. If prices are going down, there are more sellers.”
— Larry Pesavento
Daily candlestick chart of Beyond Meat by Steven Sarnoff, h/t stockcharts.com
“Parabolic advances usually carry further than you think, but they do not correct by going sideways.”
— Bob Farrell
I get a kick out of the wild success of Beyond Meat’s IPO sparking scorn from analysts excoriating the “fake meat” company’s market cap exceeding that of larger and more established enterprises like Conagra.
Hah, they don’t see the future of food charted clearly before them.
For you, the animals, and the planet, Go Vegan!
Subscriber Note: We’re on the road and offline much of this week, headed up to the mountains for some fresh air and apple pie.
Chart by Steven Sarnoff, h/t stockcharts.com
“Folks using intraday charts to call the top of a gold move that is unfolding on monthly charts is hilarious. Y’all are doing it backwards!”
— Chris Carolan, @spiralcal
Options Hotline Update, FYI: Our recommended Father’s Day call on Barrick Gold Corporation (GOLD), emailed Sunday evening to our subscribers, triggered 06-17-19 at $85 with GOLD at $13.86, traded 06-21-19 at $206 with GOLD at $15.68, +142% in 4 days on a 13% move in the underlying shares, with an always known and strictly limited risk!
That’s the Superleverage power of my method on display. If this is the type of options action you’re looking for, subscribe to Options Hotline today to see how we stay a step ahead of the crowd.
The character of the behavior of price movement in gold is telling us a big longer-term breakout is in play. Former resistance (supply) now represents underlying support (demand). The strong red candles on my weekly chart above depict this vividly.
It’s important to view price movement from different time perspectives: monthly, weekly, and daily. Consider the lines of average price movement, along with price movement irrespective of time and you begin to approach a complete picture.
Options Hotline Update, FYI: Our recommended call on Barrick Gold Corporation (GOLD) trades +131% in 3 days, on a 12% move in the underlying shares, with an always known and strictly limited risk.
Market moves accelerated following a friendly Fed statement. Falling Treasury bond yields are weighing on the US dollar. This is helping boost stock prices and it benefits gold, as well.
“A lot of what we call signal is noise.”
— Nassim Nicholas Taleb, @nntaleb
True. But sometimes signal is signal. Discerning the difference is part of the art of technical analysis.
Options Hotline subscribers are seeing the application of that art pay off this morning, as gold is getting going. Our option recommendation on Barrick Gold Corporation (GOLD) triggered 06-17-19 at $85 and is trading 06-20-19 at $190, +124% in 3 days, with an always known and strictly limited risk!
“Investor emotion-sentiment always swings from extreme to extreme. On the edges…this is where the successful investor waits patiently.”
— Ian Cassel, @iancassel
Two men whipsawing lumber in British Columbia circa 1898 h/t Eric A. Hegg
“Consolidations are traders’ markets, in both directions.”
— Steve Rhodes
Markets move between areas of support (demand) and resistance (supply). In a large market consolidation, whipsaw action is not unusual. It provides opportunity for nimble traders to profit from moves up and down.
Option buyers are the only ones who possess the Superleverage power of unlimited profit potential with an always known and strictly limited risk.
Good luck in your trading!