"Make Sure to Have Your A Game", you may not have it when you think you do

This year as regular readers of my blog know, I suffered a terrible loss of my favorite dog of all time, BOOMER. Here is a picture of my majestic 200lb dog I nicknamed "Shaq." Please forgive the cord on the porch here, we did not have the wiring complete for our fountain out front when this picture was taken, it looks a little "tacky." To think that all me and my wife do is rescue dogs, that were able to share the life of this incredible dog, was and will probably always be my most unique pleasure of my life. He was capable of running down coyotes on a full sprint at this size, and could jump out of the building. He also slept on our bed with us. He was the most unique combination of ferocity and loving qualities that I am sure I will ever experience in my life be it man or canine. We fought our battle together valiantly, until he finally succumbed to cancer. Readers may of know of the minor miracle I pulled off extending a good quality of life for an extended period of time by giving him some of the nutritional products I take every day. It will haunt me forever, that the miracle did not last. The doctors still are baffled by how I was able to do for him what I did.

Why do I bring this up in a trading blog? It is very important to have a good handle on emotional influences in one's life before going about trading the financial markets. You may think you have a good grip on something bothering you, but I can assure you that the most raw nerves get exposed quickly in this business. I have been without Boomer now for a couple of months, and the loss still weighs very heavily on me. It is not a coincidence that my trading has been sub par tracking it back literally to the day I lost him. I really thought I had a handle on this emotionally, and am now finding that I do not even now. I do not believe it is effecting my trading at this point, but on some subconscious level, it still might be.

There is no textbook for anyone to read as to how to handle difficult emotional influences. You could get involved in a divorce, have an illness, or have trouble with children. There are so many things that confront us all on a daily basis, that there is not one simple solution for how to deal with them. What I would suggest, and I take this just from my own experiences, I am not a believer in psychology books, is the following. I think it is correct to confront and acknowledge what is bothering you, do not suppress it. It may not help in the near term because it does makes things hurt a bit more. However, life is full of challenges like this and you cannot let them ruin you. Focus on the positives, and how enjoyable they are, and accept that there will be low points. Try and learn from the low points. At times of stress it seems you will never get through the bad times, but they do pass, and brighter times will come along.

Part of this post is just me doing exactly this, acknowledging the loss and the pain, and paying tribute to a truly unique being that I was lucky enough to have been able to spend time with before him leaving us. I try to honor his life in how I live mine and continuing to give back to the world by rescuing other dogs who need help. I am the guy who helps elderly people in parking lots, I look for ways to help others, please do the same. Just the look in people's eyes when you have helped them when they did not expect it is so rewarding I cannot tell you. Try it once and I am sure you will agree. I will never forget Boomer, I know it is very unlikely I will ever in the rescue world come across another dog like him. He will forever be my champion. I owe it to him to live my life fearlessly and passionately like he did for as long as I live and will do so.

I apologize to those who check in here to always see a chart on the latest market move. However, this is my personal trading blog and at times I do feel like posting things that may be personal, yet also do lend themselves to this main topic. The real heart of this blog is really a running inner monolgue of my thoughts anyway. I you find yourself in the middle of something trying, do not hesitate to push away from the computer for a time, there is always another trade. I wish I had done so, it would have saved me quite a bit of money I threw into bad trades when my head was in the wrong place.

As for the markets and where we are now, we have a couple of interesting things going on here. First, we made a new low in the VIX on Friday, which of course is logical with the launch in the indexes on another upward leg. Ironically now though, at least in the very short term, if the VIX were to reverse back up here in the next day or two, that is a sell signal for stocks. I am tempted to just ignore every single sell signal due to the FED's complete control of the stock market, but the signal is there. I do not have anything else that I watch supporting this sell yet, so I am not sure there is any actionable stuff to do in line with it.

What is truly unique about this chart is that I cannot find one single historical occurrence for 5 higher lows in my indicator, if this were to curl up now at a level higher that the #4 point. Since I have maintained for quite some time that this is the most unique rally in stock market history, this only adds to that view. In a normal world this would be a red caution flag 30 feet big. It is truly amazing that the FED is able to continue to control this so tightly, just beyond belief. It does also tell me though, that this is a time for caution not outright bullishness. This is a powder keg of trouble here at some point.

We also have something else very unique and also something I cannot find another example of which is on the following chart.

This is the 30 year Bond Market. The purple line is Larry Williams POIV indicator, and I have never seen this amount of divergence in this indicator. This generally has very subtle divergences which work very well. For it to be diverging this much is very interesting. Since there is generally a inverse relationship to stocks and bonds right now, this bullish setup is very negative for stocks. So we have the VIX giving us a stock sell signal, and bonds diverging historically bullishly,  hmmmm......

Again, with the artificial nature of what is going on, I am not sure how to view this. However, as I stated before, the signal is here. The Dollar appears to be rolling back over again just like the FED wants, so that is one inconsistency here. We would expect a stronger pattern in the Dollar to bring all this into sync. However, historically the dollar and stocks have positively correlated not negatively like they are now. I can't put 100% of my confidence in the Dollar Index, what if we are potentially falling back in line with what the normal relationship has been between stocks and the dollar? Since this is not perfectly clear, I think patience is required here, this is not a perfect storm, just one with some dark clouds off in the distance. Time to tighten stops and longs and see what happens, we may be setting up some type of reversal here, but it is not here yet.