Tweet *****Has everyone given in yet? Have all the shorts capitulated? Is there only one way that these markets will forever go? It's amazing and amusing and we won't know where it'll end. So all eyes are now on earnings reports for the confidence boost and support.
It has long been said that a watched pot never boils. It's almost true in the sense that when we wait for something to occur because it is "long overdue", we may wait longer than a lifetime. Preparation for doom backfires for those to whom it never happens, but when a disaster hits, everyone deems the prepared person as having wise foresight. Then there are those people for whom all warnings go unheeded and never consider that the disaster can ever happen. They are known as "victims" in today's world, but considered as being "fools" in the past when survival of the fittest was regularly challenged
In trading as in life, survival is the key to success also but how we prepare for disasters. If we are overly pessimistic we tend to view situations with a weary eye toward the worst outcome and may not note the positive pressure. If we are overly optimistic we may think that we'll be able to react to a disaster as it occurs and need not take any preliminary action. In both scenarios a trader can be squeezed out beyond their expectation. So best to build a shelter, be it another vehicle for hedging or daily cash close or a firm grip and management of actual hard or trailing stops. With these tools we can still suffer a loss but keeping most of what we have is more likely than total loss.
Happy Trading, Living and Dancing
The Weekly Outlook - $DJIA $NDX $SPX
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