Wishful Thinking

Thank God for small mercies. Our belief in the immense powers and infallibility of the Central Bankers remains undiminished. The markets are apparently expecting the Central Bankers to pull another rabbit out of their collective hats from Jackson Hole, Wyoming and help the banks, markets and Govts respectively get out of the hole that they have dug themselves into. This expectations is again apparently the reason for the rally in the markets overnight and the strength we see in Asia today.

While we are at it, that is indulging in wishful thinking, we could also start expecting them to focus their attention on the other problems facing the world i.e. poverty, pollution, global warming etc. I am sure the only reason that these problems have not yet been solved is because they---i.e. the Central Bankers have been busy saving banks and the markets. Once they have done this, it is only a matter of time before these superhumans actually resolve all the other problems facing humanity.

This dangerous game of expectation and wishful thinking is the reason behind all the ills facing the world. Politicians spend all their time with their heads in the sand like the proverbial Ostrich, hoping that the problems will blow away or are at least contained until the end of their term in power. No one is therefore willing to take the hard decisions.

But then this problem is endemic. I can see myself indulging in that from time to time. As a trader, I keep wishing the market to move in my direction all the time. Even when it is going against me, I keep ignoring the signs and hope for a reverse into my direction. Taking the stop-loss is something that is difficult for me to do even now after being so long in the markets. Luckily, I do not trust myself to do the right thing and therefore leave the stop-loss orders in the system. If my stoplosses are hit, my orders are automatically executed without requiring me to pull the trigger.

As of now, I remain short. I will cut my short positions only if we move above 4994.