Sunday, March 23, 2014

The Weekly Outlook - Grin and Bear It vs. Bare It ~ $DJIA $SPX $NDX

*****So we wonder how it will come to end. The bull market, not the world. Truth is that the bull market never really ends it just takes a pause from time to time and changes direction once in a while. Just study the charts since the beginning of it all and you'll see that most of the time we are the bull and less of the time a bear.

That fact aside, we talk as if when the bull market changes to a bear, the world will come to an end. A change in direction, when not planned for, is usually unpleasant for us when we are merrily traveling on a taken path toward a goal. But change is inevitable whether (or weather) we like it or not. Causes can be many but direction is not. It's a down direction on the charts when the bear awakens and comes out to hunt.

The real question is how we as traders and investors approach the change. Investors tend to grin and bear it traders on the other hand most likely grin and bare it. The difference being a passive stance vs an aggressive one.

To an investor or long time-frame trader a temporary downtrend change means to hold on, keep smiling and bear the change. They know that it is only for a short time and for the long run they can use the opportunity to add to a bull position; hence, they can grin and bear it.

To a day-trader or a swing-trader, aka short-term trader,  the opportunity is to change direction with the market, flip the trade and take advantage of the weakness; hence, they grin and bare it. Bare can mean the baring of teeth as animals do when taking an aggressive stance which short term traders have to do in order to take advantage of market changes. Sharpening ones horns or baring ones teeth mean the same thing to traders only the direction is different.

A grin can be a broad smile, like on the cat that ate the canary, or it can be a grimace, like on a skull. When the bear market hits, whether you'll  "grin and bear-it" or smile and work through the pain, or "grin and bare-it", grimace and bare those pearly whites in aggression,  knowing how you will approach change will reveal and define your style and your approach to the markets.  Just remember that the bull never really goes out to pasture, but it's the nature of bears to hibernate.

Happy Trading, Living and Dancing

The Weekly Outlook - $DJIA $SPX $NDX

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