A big change for me...but little has changed with market action

I am now a proud father of an absolutely beautiful and healthy girl. Wow! I was just getting used to being called a husband and now this! I cannot fully describe the type of connection I felt when I locked eyes with my daughter for the first time which was about 10 minutes after she was born.


Here's a picture of her just after that moment of connection

The best way perhaps to describe it was that I felt I was looking at myself (even though she looks more like my wife!) because I feel my child is literally a part of me the same way my arm and leg is and there's nothing I wouldn't do for her.

Although I'm exhausted I'm also ecstatic at the same time! It's a huge life change no doubt...probably the biggest I'll ever have. Much has happened to me in the past 4.5 years. I met a girl, moved in with her, quit my job to trade, got married, bought a house and now I'm a dad! Such huge life changes in a short span of time which at times feels overwhelming...but that's life. You don't always get to determine the pace of such major changes because opportunities and circumstances are often out of your control.

Ok, so let's get to markets. As you may have guessed, my attention has been a lot less on the markets and more on other things lately. But throughout it all, I was able to briefly take peaks at how the market was doing intraday. We got the dead cat bounce I expected to fill the gap and then some. Unfortunately, this rally yet again has been almost exclusively done via gap up and morning strength action which is indicative of bear market type bounces that eventually get entirely retraced. Such bounces can be quite sharp and can even carry on for weeks. Whenever we get sharp drops or rallies you tend to see market technicians harp about "breadth thrusts" which are supposed to be indicative of major trend changes. Well, I don't trust such notions in this day in age because of the dominance of program trading. Such program trading has led to an increase in market noise/false signals. The more "automated" and technically oriented market participants are the less likely that traditional technical analysis is going to work. This may seem counter intuitive. The reason I believe this is so is because if so many are acting on the same buy/sell signal there are few left to be the "greater fool" that will allow all these technicians to unload their positions onto for a profit and is them who become the fools!

Now, one very good thing going for the bulls from a sentiment perspective is that the AAII bull/bear ratio (as of last Thursday) is showing very extreme bearish sentiment. It's almost 3:1 bears vs. bulls which is a 15 year low! That's very good news on IT basis. The Rydex cf ratio also sank to an extreme 1.2 last week which is also very good news. In an ideal world for me I would like to see the market retrace this bounce and start acting like a bull market again i.e. flat/weak opens and strong closes to give me the "all in" buy signal I'm looking for. But more often than not the market doesn't give me all the things I look for. Sometimes during the initial move of a bull run you get the shitty upside action (a gap up and run day) and then market action improves. But we haven't seen that yet. Practically all the upside has been done in a shitty way since the recent low of last week.

Bottom line: more patience still for longer term traders/investors but some there’s some really encouraging sentiment figures that favor the bulls here on an IT basis. The market has basically gone nowhere for 9 months but that’s going to change soon. To the ST traders...this market is for you now.