Anyone reading between the lines of this blog knows that I heavily employ psychology as well as the already obvious technical analysis. Anyone subscribing to the newsletter knows that psychology and/or sentiment is reviewed nearly every week.
Why? Well, because I am and always have been hugely interested in human psychology, especially collective psych. I am fascinated by herding and group behaviors and, beginning about 20 years ago when I discovered the Jungian Shadow (both individual and collective within a society), I became fairly terrified of same because the collective will to do or accept evil - all under the banner of a given jingoism of the day - is always potentially there in crowds; especially in upset, frightened or charismatically swayed crowds.
Ignorance is also reassured in crowds. If the next guy's not concerned, why should I be? The herd feels okay and I would rather feel okay than not okay. "I am sheeple, hear me baaahhh."
Anyway, this stream of consciousness post is triggered by this article at Tech Ticker, which I checked out as I was reviewing my brand spanking new short position (QQQQ via QID): Another Reason Most Day Traders Are Deluding Themselves.
The article makes some really good points about da crooks we love to hate; our friendly troubadours who exist in the concept we like to label 'Wall Street'. Reading some of the author's views, I said to myself "duhh, no wonder you keep it clean and stick with the technicals and the herd's sentiment."
It's nothing most of us don't already know, but in frenzied and euphoric markets especially, it is good to be thinking about who's on what side of a given trade; who's feeling good and who's wink winking and nudge nudging.
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