Perception IS Reality

Here are some headlines from today:

- Oil hovers near $78 amid positive US economic data

- Asia markets fall as US recovery doubts linger

- Volatility returns to markets, pulls Dow off highs

A bit misleading if you read them all together. The writers of these articles can be typically out of school, need a job, and have to write about something. You can't really blame them I guess. When something happens in the marketplace, they always have to have a reason. I remember a few years ago when "market up because of surge in oil" and then, "heavy oil prices weigh on stocks". Or something to those effects. Obviously, the writers have to write about something.

So, be careful when reading headlines since you can't trade off of them, not really. There can be big themes, and you can keep those themes in mind. Also, the perception can become reality.

Perception IS Reality

In trading, you can trade on perception, but have the real reality in your mind, waiting for the opportunity of the real reality. Often, you can trade the perception, which is what we did when we shorted stocks to the very last day I believe (maybe we were a few days off... I can't remember) earlier this year.

The same was for internet stocks. Perception was reality when internet stocks were booming. The real reality was that it was ridiculous. But why trade the real reality? You have to wait until the technicals match up with the real reality, and then you can really have some great trades.

Good Trading,