The New York Stock Exchange traded well for a Friday. I don’t know if it’s the Santa Claus rally or what but it looks like we are in for a strong week ahead. There are too many indications otherwise. However, with that much anticipation we could all also get a big nothingburger. I will keep this post short and sweet since – as you’ve noticed – I haven’t been getting all that much time to post in the time slot that I want to.
The cash open was ok for me (wow!). I actually got off some good trades and made the necessary reads on the market that I needed to make. It looked, for a minute, that we were going to get dragged down by gravity but a couple of minutes into the open, the buyers firmly seized control of anyone even joking about shorting. There were opportunities to be made short and I got one of them but overall, you needed to get long and stay long. I only traded one other asset today and that was the British Pound. I didn’t get as much as I wanted to from the trades but they were enough. It was a semi-productive day for me only because I didn’t make what I thought I could make.
I am now fielding calls from relatives and friends about cryptocurrencies. You’ll recall that I highlighted how important it was in one of my previous posts how the CME was planning to list bitcoin futures. Even if all this hype doesn’t pan out, bitcoin will be one of the most hotly anticipated trading listings of all time. It is what forex was 12 years ago, and it will be complete with the hucksters and shills. Personally, I can’t wait for the commercials but that’s not why I’m typing this. I’m typing this to remind, not only myself, but others who may read this that this is what tulip-mania was like in the Netherlands. Of course, tulips aren’t an economic barometer and frankly, I’m not here to split nose hairs between that and, let’s say, the tech boom of the late 1990’s. What I am here to say is that there is a commonality between the two and that is: speculation. The nature of speculation will never change. Look into the endings of both tulip mania and the 1990’s tech boom. In fact, look at the endings of the U.S. baseball card industry and to a lesser extent, the housing craze of the mid 2000’s. They all bear the same signs: people going crazy to get into the action, creative commercials and weird advisory businesses popping up as a result, and a seemingly endless optimism about prices.
I’m not going to go into specifics but if experience has taught me anything, it’s that:
a.) this will all stop, and when it does many people are going to get hurt. I’m just going to create an informal distribution bell here and tell you that for each 10 people you know that will get into the bitcoin market, only 1 will actually make money and when I say make money, they will make anything from a dollar to anything beyond that AFTER commissions. 2 people will NOT lose money, meaning that AFTER commissions they will still have their pants on. the other 7 will have losses ranging from the “well, at least I tried” variety to the “if my wife finds out what I did with this years vacation money, i’m dead!” type.
b.) this craze will get us all attacking our rational selves as the price of bitcoin goes up and more and more people talk about it. I know that I will probably have more people talking/debating me about the merits of getting in but I have to stand my ground. You see how I regard trading in general and if you haven’t, then you should know that I find it to be one of the shittiest businesses out there – if you can call it that.
I am thankful today that the PnL was positive going into the weekend. I don’t know what I would have done if I suffered a loss. I got so happy that I basically ordered a celebratory Chinese food meal from the local delivery place. I actually could have banged out this post sooner but after a chicken with broccoli combination and egg roll, I needed to just sleep it all off. So here I am, the food is all digested and I’m kind of semi-awake. Again, it feels good that I’m going into the weekend on a positive note and I can only credit God for that. Now, it’s time to look ahead for my last trading week of the year.