I have to trade and invest in the markets that I have before me and not the ones that I desire! Therefore, I must be able to approach the market place from a completely ‘unbiased’ perspective. I do not care if the markets doubles in price, or if it is cut in half. I take advantage of moves in both directions by using my ‘short term spikes’ which I have shown you, over the past couple of weeks, in order to lock in profits in as short a period as 48 hours.
I implement my longer term cycle analysis to take advantage of moves in both directions which last several weeks or months.
Today, there are two ‘psychological’ situations that lead to big events within the markets. They represent ‘mirror images’ of one another.
The first issue is ‘overconfidence’. Whether this is ‘overconfidence’ in a market, a strategy of oneself, ‘overconfidence’ leads to carrying the largest position at the most inopportune time.
The second issue is ‘indecision’. There are times, when a market approaches critical levels and yet the trading population appears ‘uninterested’ or even ‘frightened’ to respond. In either case, ‘indecision’ leads to fewer participants, while ‘overconfidence’ leads to too many.
Currently, my focus is the examination of a ‘very bullish’ net commercial trader position in the face of the lowest commercial participation rate since the economic collapse of 2008/2009.
I may frequently reference the ‘net commercial trader’ position and ‘commercial trader momentum’, in my analysis. The total position is really only meaningful at its’ ‘extremes’. The most important factor to keep in mind, while reviewing the following charts, is the mathematical relationship between the ‘total and net positions’.
The ‘net commercial trader position’ is measured by subtracting the reported short positions from the reported long positions, of the given traders. Long contracts minus short contracts equal the ‘net position’.
