Wednesday, June 22, 2011

The Daily Note - Played or Playing?

The inevitable question we all must at one time or another ask of ourselves is whether we are playing or are we being played. Paying too much attention to the many opinion mills available tends to cloud the issue to the point where we may wake up on the wrong side of this bed of nails.

CNBC, CNN, FOX all spout an agenda, so do most politicians and especially the various hearings they hold. You will also find much misinformation along with good information on all streams of social media and of course you can read a billion blogs and find the same. You can drive yourselves and others crazy in the long term and certainly confused in the short, but one thing you need keep in mind along the way is the question of: who has got what on their list of desires for the outcome? It will help your sanity if you want to trade the news.

I have found years ago that what most news outlets tell you in the headline is either misleading or plain wrong. Reading about 2000 headlines per day during a 5 year period made me some sort of expert on the subject. Pick up any tabloid and it becomes obvious, pick up the NY Times and it's almost subtle or at least it used to be. Read Reuters, UPI, AP headlines and read the meat about 2/3 of the way down and you'll get the idea. Inevitably along the way I realized it was no accident. Making others alert to it is quite another matter but I keep trying. The alternative would have been to stay dumb and become numb, which is not in line with my style.

Also inevitably I had to realize that I could play or be played. Since I prefer to make up my own mind I chose the former so in the end I had to become the trader I am today.

The best way to play the head games they play is to become part of the stream. "Be the ball" "Go with the flow" which in the long run allows you to anticipate and act in near unison. Rather than be contrary, which I can be often enough just for the debate, I prefer to anticipate and go along for the ride. Am I being played? I've found myself on the nail end of the bed at times but, I'd like to think, not nearly as often as before; but when one is sure of something is when they are most vulnerable to being played. Keep it in mind when listening to the Fed, and all the players next time, that they too can be played if you hold your own thoughts clear and take THEM for a ride.

Happy Trading, Living and Dancing

The Daily Pick - $ES_F

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