Swirling and bubbling
reflecting a mood.
Deep absolute void
capturing all light
Absence of color
cool slab of obsidian
pitch dark night.
Swirling and bubbling
reflecting a mood.
Deep absolute void
capturing all light
Absence of color
cool slab of obsidian
pitch dark night.
There is much that I don’t know but I do know about the power of a smile. My journey for truth and balance in life has taken many twists and turns. Struggles often outnumber achievements over the past few years. Bouts of depression and periods social isolation have taken their toll and the results have bubbled up to the surface of my psyche. My forays down the rabbit hole have led to some strange days and strains on my relationships. Some really tough lessons have been learned, and some really difficult experiences have been my life coach.
Honestly I am still a very flawed individual and at times it is difficult for me to love myself enough to overcome some of my hang ups. The identified problem is that I know that my self worth issues are holding me back from even greater progression as an person and as a soul. My challenge is to find effective ways to mitigate and lessen my tendency to be self destructive.
That is not to say that I am not actively working on my personal development, because I am. Between individual therapy sessions, group classes in behavioral therapy, weekly volunteer efforts, a renewed exercise regimen and a recently acquired part time job with a not for profit organization, I have been making progress in overcoming some of my bad habits and recurring self destructive tendencies.
Sometimes however the simplest therapy is often times the most effective. To over think can be to cloud the truth behind layers of unnecessary complexity. One of the greatest and quickest ways that I am able to uplift not only myself and also those around me to greet the world with a smile.
You would be amazed at how well this works if you don’t do this already. All that you need to do is to make eye contact with people and once you have that connection all you need to do is to smile. A nice wave and “hi there” or “hello” is great as well although it is not necessary if your smile comes from your heart.
You see, to smile is not enough in my opinion. If you want to make your smile impacting you need to feel love for the person that you are smiling at. Even if they are a complete stranger you can feel love for them. This is the same love that you can feel for a beautiful sunset, or for a warm evening breeze, or for the wafting smell of barbeque. The love I am talking about is just a simple love of what is. A love of the fact that we exist. The love of the wonder and beauty of the universe.
One of the greatest things about this simple exercise is the immediate feedback you receive. The reaction that refracts back to you from the individual that you greet with your love is instant and usually revealing and gratifying. Often times I get the distinct impression that I have made the day of that person by letting them realize that they are not alone in the world. They are part of a community of people and that they are loved and noticed. They are valued for existing.
This is powerful medicine for both parties. For me, this feedback uplifts my spirit and soul. It puts me in a great frame of mind and encourages me to continue to engage and interact with people on a spiritual level. The great thing about this exercise (I prefer to call it “the smile game”) is how you can play it at any time. For example my favorite time to play the smile game is when I am out for a run in my neighborhood.
As I am running I invariably run into folks such as the garbage collectors, or the postman, or the UPS driver that has his route in my area. These folks get a smile and a wave from me and now they smile and wave back as well. They know me and I know them now. Random strangers walking children in strollers, or the elderly man out for a walk that I always seem to see on a certain street have become less than complete strangers because we have connected and are now aware of each other.
My sense of community and my sense of the rhythms of the neighborhood have increased. My connection with those around me has grown and my sense of isolation has diminished. Spiritually the smile game creates an immediate mood enhancement since it is hard to be unhappy if you feel love for your fellow man.
The flip side to this is that when you are feeling down the tendency is to keep your head down and maintain the isolation. Some days I just don’t feel much like playing the smile game. Those are the EXACT days that I get the most benefit from forcing myself to play. If you can flip the switch and make yourself get past your own sadness and realize how great it feels to just love a stranger unconditionally and give them a smile from your heart then your own mood will lift as well and you are well on your way to turning your day around for the better.
In conclusion, please understand that I have not conquered my demons and am not some enlightened man. My flaws are still very much a part of who I am. That does not mean that I don’t have insights and that there is not a pure expression of love inside of me (as there is in everybody). The more that you can tap into that love the happier that you can become and the greater this vibration can spread to others in your world.
Try playing the smile game the next time you are feeling a bit down and watch the magic happen for you and for those around you. It is the power of a smile!
As a postscript I wanted to mention that as of last week I had gained over 50 followers to this blog. While some of you big accounts probably get that many followers per week, this is a big deal to me and I am proud of the achievement. More importantly, I am heartened by the support and appreciate all of those who read my words, like my posts and who take the time to comment and interact with me.
A hearty THANK YOU to all of you fine folks and know that I am smiling at each and every one of you.
One of the great joys of living in a major metropolitan city are the varieties and flavors that can be sampled just from hanging out in different neighborhoods. Where I live out by the beach, there are many great trails and views of natural beauty, flora and fauna that continually amaze me and make me thankful for the lovely city I call my home.
However, just a short Muni ride from my flat brings me to whole new worlds with unique energy and their own set of values that make them special. Yesterday I found myself in San Francisco’s Mission District getting my brakes worked on and needed to kill a few hours. Besides enjoying a great lunch at at a lovely neighborhood cafe I shot a few photos of some of the street art and scenes that surrounded me.
The Mission is a vibrant and diverse neighborhood, but it’s history is firmly rooted in the Hispanic culture and street murals and street art abound that reflect those roots. It is amazing how many walls, buildings, parking lots and alley ways are lovingly painted. Worth noting is that these murals are never scarred by graffiti – there is honor on the street and graffiti artists respect the work of the muralists and vice versa.
Many of the murals have religious undertones and somehow that seems natural and right within this area. The Catholic church is a large part of the Mexican culture and so it makes sense that religion would figure prominently in these works.
All of these photographs were taken within a four block radius and there were many more murals and examples of street art that I did not shoot or that came out even worse than these pictures. (my phone is old and the camera sucks. Looking to update very soon so expect an improvement in the photo quality on my pictures soon)
The area is absolutely teeming with great subject matter. Perhaps I will head back to the Mission District soon to see what else I can capture with my lens. For now, I hope that you enjoy this glimpse. Enjoy the weekend!
As my feet hit the ground out of my bed I say a morning prayer:
Passing days, passion fades
intensity peels off in layers like onion skin.
Blunted, muffled, tamped down.
Stuffing cotton gauze in gaping wounds.
Hazy dreamy reality
smug, warm and content.
Nothing can penetrate the veneer
safe in the cocoon of ignorance.
Challenges to status quo rebuffed.
Never question, each day filled
with hermetically sealed and
Curiosity killed the cat.
Stay in bounds.
Color between the lines.
The in-laws are in town for a few days and we are heading out to tour the city with them. Here are some quotes about family for your reading pleasure (quotes from goodreads.com):
“Happiness is having a large, loving, caring, close-knit family in another city.”
― George Burns
“When everything goes to hell, the people who stand by you without flinching — they are your family. ”
― Jim Butcher
“Families are messy. Immortal families are eternally messy. Sometimes the best we can do is to remind each other that we’re related for better or for worse…and try to keep the maiming and killing to a minimum.”
― Rick Riordan, The Sea of Monsters
“That’s what people do who love you. They put their arms around you and love you when you’re not so lovable.”
― Deb Caletti
“You must remember, family is often born of blood, but it doesn’t depend on blood. Nor is it exclusive of friendship. Family members can be your best friends, you know. And best friends, whether or not they are related to you, can be your family.”
“I sustain myself with the love of family.”
― Maya Angelou
“You can measure the happiness of a marriage by the number of scars that each partner carries on their tongues, earned from years of biting back angry words.”
― Elizabeth Gilbert, Committed: A Skeptic Makes Peace with Marriage
“Strangers are just family you have yet to come to know.”
― Mitch Albom
Enjoy the day.
Our flight back to the States yesterday was a real stinker on paper. For some reason, there are very few connecting flights from Ixtapa back to San Francisco and due to this vicissitude our itinerary included an almost eight hour layover in Mexico City.
When we booked the trip I was dreading this leg of the journey, however as time drew closer the decision was made to make the most of the situation and find an appropriate way to explore the city for a few hours rather than camp out in a foreign airport (that turned out not to have free wireless – oh the horror).
We caught a cab downtown to the historic Centro and did the Turibus for a few hours, then hopped off and grabbed some lunch at a fairly upscale shopping district before catching a cab back to the airport. Not a ton of time to see the sights but I was left with some distinct impressions and some photographs to remember the moment. Please allow me to share a few of both with you in the brief paragraphs below.
Chipped paint flakes off rusted bars.
At one time this french balcony was surely the scene of a romantic interlude.
Time has reduced the building to a mere shadow of it’s glory.
A pack of feral hounds rip apart a plastic garbage bag.
Bells tinkle from the ice cream vendor peddling his wares
as children play with a soccer ball in a nearby dusty alley.
Twisting turns emblazoned with graffiti and street art interspersed with regal promenades.
Well kempt medians with palm trees painted white.
There is a certain pride displayed in the way the citizens of the poor neighborhoods
stride with heads held aloft.
Travelling to the west one cannot help but see the royal and cultured bones to this sprawling city.
Jazz music plays in the taxicab, public parks are plentiful with modern art and statuary paying respect to new artisans and past patriarchs.
Once within the historic center, there is even more pomp and circumstance.
Workers are dressed immaculately, far nicer on the whole than in American cities. Even street vendors and bodega owners wear shirt sleeves and crisply pressed slacks.
Women are light skinned and beautiful, men are dapper and worldly. My outfit of khaki shorts, flip flops and golf shirt left me feeling shameful. I changed into long pants and shoes.
Buildings in the business district were yet ever more impressive and there was a vibrant energy that invited one to explore the shops, restaurants and museums.
I found myself wistful that I only was allowed a seven hour interlude in this fair city. Unsure if or when I will ever return, but left wondering what other treasures were left unerarthed and that I may never know in Mexico City.
As I sit in the airport in Ixtapa waiting for the first leg of my journey back home to the states I reflect on my love for Mexican food in general and fish tacos in particular.
How can there be anything greater than a fish taco? After all it is bite sized, healthy and delicious.
I humbly submit the following ode to the fish taco:
Oh happy day.
“For why?”, you say.
But the reason is clear,
as before me my dear
are a wonderful plate
of fish tacos with a date
to be eaten poste haste,
with a smile on my face.
Do not shed a tear,
I will down them with beer.
And when I am done,
I will verily run
back to the grill
for another plate to fill.
You must realize
that you don’t need fries
as a complement to
fish tacos and brew.
They would just, as they say
get right in the way.
When hunger comes to call
and the sun starts to fall.
You know where to go.
Don’t walk, that is too slow.
Fish tacos and beer
is a meal you cannot fear.
To be truthful they are
my favorite by far!
Just some thoughts I put on paper, I hope you enjoy them.
My flight leaves Thursday morning for Mexico. That leaves me plenty of time to pack a few pairs of shorts and some t-shirts. I really need to use this trip to get my head back in order.
Today feels lighter, and I am going to seize that energy and try to bottle it up to buoy myself and move forward. No use in dwelling in the shadows longer than necessary. Things get heavy all on their own, if I make it worse it just compounds and magnifies.
So a little sun therapy will do my soul good. I will be off the grid as well, which could be coming at a beneficial time for me. It’s likely that I will not have any meaningful access to the internet for five or six days and that may be a blessing. Funny how sometimes the Universe provides just the medicine that is needed at just the right time.
The last few trips have been hard to get that excited about. Something about my unemployment makes me feel slightly guilty about taking more time doing nothing. Also I will be off my exercise schedule and that can mess with my inner peace a bit too. All that said, I will do my best to embrace the experience and be truly grateful for the opportunity. I am blessed with so much to be thankful for and I need to remind myself of this at times.
When I return, things will get a bit challenging though. In-laws are staying with us in our cramped flat and they have kids. Did I mention that I am an introvert? Fun times. I’ll manage, but between the lack of my Twitter security blanket, the travel, and the house guests I can imagine there could be a few interesting days ahead of me mentally.
I’ll check back in before I leave (probably several times…), but for now enjoy the day and here’s a live version of Mexicali Blues by the Grateful Dead from 3-16-73 :
You use your feminine wiles.
Sticky honey to snare,
knowing full well the power.
Why do you choose to torment,
to torture me so?
Never a direct acknowledgement of my presence
yet always alluding.
What laws of nature prevent basic human kindness?
Preclude a gentle interaction?
A mere touch here and there is all I long for.
Just to know you think of me.
Why must I always make the first move?
Slavery to my emotion
dictates that no matter the consequence
I must trap myself time and again
in your devils snare.
Will you not take pity this time
and release me?
Free me to spread my wings
in soaring flight.
We can glide together
on the warm upwellings.
Effortless, peaceful, graceful.
A stranger in familiar environs
words only make things worse.
Causing hurt and misunderstanding,
leaving in their wake pain and destruction
as the tides recede.
Stench of death, rotting bodies.
Things will never be as they were.
A baby cries, looking for mother.
Nothing can bring her back.
Life is forever changed.
One of my wife’s favorite radio stations is NPR or National Public Radio. The quality of the programming is quite good at times and one of her favorite weekend shows is called Radio Lab. This show typically has brief snippets or interviews on varied topics.
This weekend we just happened to be tuned in as we were driving back home from an errand and a story came on that was fascinating to me. It described a study by a gentleman by the name of Walter Mischel to test willpower in four year old children. The concept for the study was shockingly simple: put a kid in a room with a marshmallow (or later on, Oreo cookies), and tell her if she can resist eating it for 15 minutes, she can have 2 marshmallows (cookies). It turns out after tracking the children in the study over many years that the kids who could delay gratification at an early age were much more likely to be successful as adults as defined by education, SAT scores, careers, income and even body weight and overall physical wellness.
Is there a correlation between the ability of a four year old child to delay gratification and your future life? Are there ways to combat these tendencies or is fate written into the stars? This fascinated me and horrified me at the same time. The implications were that if you had certain genetic tendencies then you were likely to be successful and if you happened to have others you were screwed.
The good news was that towards the end of the snippet there was mention of the fact that children who performed poorly on the test could be given tools to help them to combat their tendencies. If these tools were taught to the children, they could learn to exhibit better control over themselves.
This was a relief but also a bitter pill. I say this because in reflecting on my upbringing, it is apparent that I was not given some of these crucial tools that may have helped me to better cope with the demands of life in a way that would have left me with higher functionality.
It is not that my parents lacked the tools themselves or even that they purposefully neglected to teach me these valuable lessons. Rather, I believe that due to their own upbringing, with parents that were very strict and disciplined that they preferred to have a more hands off approach with their children.
While the intention was not to smother or suffocate me, the end result may have been less than satisfactory. Spare the rod and spoil the child? It was not just discipline, it was the lack of practical tools to overcome natural childlike tendencies. Often times there was no repercussion for bad behavior. This led me to feel that I could do what I wanted with impunity, but also that I was on my own to figure out how to live my life.
That is a lonely way to grow up. Could this have led me to my introverted tendencies? Hard to say. As I got older, my brother started having difficulties with his mental health and again I chose to not make waves and stay out of the limelight. Never asking for help, forging my own way as best I could. By this point, I was already using marijuana and drinking as a way to self medicate and this likely created it’s own set of problems.
The set of tools that one has at ones disposal are crucial in my opinion, because as the study illustrates there are many different responses to a given stimuli, but society rewards only certain behavior. The tools help to create responses that will allow a person to cope with their unique makeup in a way that is healthy and productive. Without the proper tools, you end up spinning your wheels trying to gain traction. That is how I have felt for much of my life.
Here is the podcast in case you are interested in listening. Have a great day and feel free to leave your thoughts and I will answer:
As introverts go I am pretty extroverted. But don’t get it twisted, I am an introvert at heart. I crave periods of solitude. Some of my favorite parts of the day are extended periods of time when I am totally in my own mind. Deep down in the primordial sludge.
It is not wholly constructive for me to stay in the rabbit hole for too long. I can get lost down in there. Trust me. The shit I am thinking about ranges from the mundane to the metaphysical. I can slip down the hole at the strangest moments. I don’t even need to be alone for it to happen. Many times I have “gone there” in the middle of a grocery checkout line or as I wait for a red light to turn green.
The feeling is of warmth and contemplative relaxation. Time slows to a standstill. The more I embrace the feeling the deeper I go down the hole. It is hard to reverse because it feels so good to me. My only wish is that these moments of reflection would result in more permanent positive feelings for my overall mental outlook.
Alas, that is not always so. In fact, sometimes these deep thought sessions sometimes trigger a bout of moodiness as the real world usually proves far harsher and less stimulating to my mind. That is why I need to be careful how much time I allow myself to play in the rabbit hole.
The mundane bothers me. I would so much rather think about any philosophical or spiritual or scientific thought than spend one ounce of mental energy on pablum. That is why I don’t watch television much or even read common media sources. It’s not that I am so sophisticated or smart or anything. It’s just that my tolerance for lowest common denominator, formulaic, propaganda or anything herd like is just very low.
This creates some interesting results. For one, I have a very low IQ for what is currently “hip”. I have no idea who current stars of the movies, music, television are. It horrifies my wife how little I know about popular culture. I am not cool, or with it. The funny thing though is that I am frequently told that I appear youthful or younger than my age not just in looks but in attitude. Possibly this has to do with the fact that I am always questioning conventional thinking to the point that many consider my attitude churlish or argumentative. This is not how I feel to myself, but it’s more that I always like to play devils advocate and look at things from the less conventional point of view.
Are there others out there who are of similar temperament? If so, I would love to hear from you. To learn how you deal with the temptation. The craving to lose yourself in your own mind.
The mines lurk just underneath the surface.
Ever present reminders of explosive danger.
To navigate these waters takes the utmost care, and cunning.
One slip and it all could implode.
Don’t let it happen on your watch.
I plan on posting more later today, but in honor of the 50th anniversary of the Beatles Ed Sullivan appearance I thought it would be appropriate to put the full Abbey Road album up for your Sunday listening enjoyment.
My love of the Beatles and of the solo work of Lennon, Mc Cartney and Harrison is a large part of who I am.
It is somewhat shocking that the Beatles were only together for seven years. The sheer volume of incredible songwriting that came out of those years is a testament to their talent.
Enjoy, and come back later for something more substantial from me.
Here are a few thoughts I jotted in my notebook this morning. Reflections of my mood, my feelings at the moment. Normally, I would have spent the morning thumbing through my Twitter feed, so perhaps the positive take away is that the lack of Twitter is encouraging more creativity to blossom in my life.
It is a rainy day in Northern California and this has something to do with the tone of my words below. A bit of melancholia today, but that is to be expected. I don’t handle changes in my routine very well.
The funny thing is I am writing these words, but barely anybody is actually reading them. Does this bug me? Perhaps a bit, as my ego has gotten used to the attention of hundreds of followers reading my material. Hopefully this is a good thing for me, a pure expression, not predicated on impact or appeal but only coming from my soul. Anyhow, for those few out there reading…thank you and I hope that you continue to come back. Feel free to leave me messages and I will answer. Enjoy your weekend.
Puddles, rings of concentric circles.
Dampness, dull thud.
Creaky bones and cranky mood.
Missing the familiar.
Wondering if I am missed in return.
A mere speck of lint.
So easily flicked away.
The build up in my mind
is so much greater then the reality it appears.
Why does the ego create stories?
Spinning yarns that are nothing more
than Aesop’s fables.
It is human nature I suppose
to want to feel important, to matter.
In nature no one matters more than the other.
There is comfort in this truth.
I do matter, just not more than
that speck of lint.
If I can accept this and embrace
the truth in this, I can feel peace.
Yesterday was a bad day. We all have them. So I wrote a bit, posted a little ditty and it’s out there in the Universe now. No regrets. However since it has been so long between yesterdays post and my last one from September I did want to give you a bit of an update of sorts.
To quote the Grateful Dead: “What a long strange trip it’s been”. Indeed.
Since September much has happened in my life and much has changed for me. Some for the better, and some for the worse. Firstly, I have not been trading at all in recent months and recently had not even kept up much of an eye on the so called “markets” since they were frankly such a big bore.
How exciting is it to watch a steady grind up day after day? Good news, bad news, no news it mattered little as the daily liquidity injections sloshed around in the market blood stream like caffeine from your morning cup of coffee. Things are starting to look a little different lately but for now lets just put that aside. I can certainly come back and post on the markets again, just not today.
Today’s post is about mindset. About finding things to be appreciative for and to put those things out there into the Universe. Why bother? Why today? Because I need the positive energy to help me overcome some short term difficulties I am facing.
I am in the process of trying hard to learn to love myself again. That sounds easy, but for me at least it has been amazingly difficult. The biggest reason I want to love myself is so that I can have the capacity to love the Universe and everybody in it, and to make a difference to those around me in my community. You see, I have come to the realization that I am at my most happy when I am helping others.
A few months ago as part of a therapeutic regimen, I began to volunteer at the San Francisco Food Bank. It has been an incredible experience and my time spent helping to feed my community is the highlight of each week without fail. We do great work at the SFFB and it is my intention to continue to volunteer there for a long while. But I can do more, and I will do more.
Anyhow, in order to put myself in the proper mindset to magnetize positive effects from the Universe, yesterday I compiled a list of things that I am happy and grateful for. Some are currently in play for me and some are things that I intend to come into my life through my purposeful thought.
It matters little, for what I am learning is as long as you treat things as if they exist and have already come to you, they will eventually. This goes for positive and negative thoughts so you need to be careful what you wish for in life. Below is my list and while it may not impact you to read it I know that it will benefit me to put it out there so that is what I am doing.
As a closing thought, it is my intention to do more writing here. I regret the long gap between posts and I’ll likely explain further the why’s and wherefore’s of this in future installments. For now, I wish you all a great day, happiness, and gratitude.
Perplexing layers of complexity.
Foul odors emanate, noxious fumes choke.
Love is the way, but I find ways to push those who love me most away.
Could this be the final straw?
I am the biggest liar ever, I know no other way to be.
Fatal flaws eventually kill.
Who would put up with such behavior forever?
The irony is that I want to be a better man, for the right reasons.
Somehow I cannot find the internal strength to claw my way out of darkness, into lightness.
Please, oh please universe. I beg of you to save me.
Take me and hold me in your bosom, and tell me it will be alright.
You all already know where I think this market is headed. However, the twitter streams are full of folks that are ready to declare yet another rally to new higher plateaus. Most investors don’t seem overly concerned about things. I certainly have not detected any real panic in either the sentiment readings or in the price action of the market.
There are still some pretty serious technical issues afflicting the market that have not been alleviated by the recent pullback. A myriad of indicators such as Put/Call ratios, Bullish Percentage indicators, volume studies, et cetera, are indicating weakness to come. I believe that the path of least resistance is to lower prices, and that the process has begun. Those are my personal opinions however, and that plus $3.50 will get you a Grande Soy Latte at Starbucks.
Anything is possible short term in this era of daily Central Bank injections of “monetary morphine” in the form of POMO. This stock market “crack” is in essence creating yet another asset bubble, this time through mispriced risk premiums in both equities and bonds. The chase for yield in a lower bound interest rate environment is the catalyst, but that is not the topic of today’s post.
You see, bubbles can go on for longer than even the most stubborn contrarian may be able to wait. Timing such reversals is treacherous at best and suicidal at worst. That’s not my point either. My topic du jour is of the incredibly obvious, yet to-date not talked about fact that the Fed’s open market operations since 2009 have created a unique moral hazard. This will act as dry tinder to the next real correction in the markets, whenever that may happen – and it WILL happen.
In the study of Psychology there is a theory of operant conditioning that was formulated by B.F. Skinner. Skinner’s theories were based on principles such as reinforcement, punishment, and extinction. Skinner created experiments using rats that would provide positive and negative stimuli creating learned behavior responses. His Law of Effect was in essence that responses producing a satisfying effect in a particular situation become more likely to occur again, and responses producing a discomforting effect become less likely to occur again.
I would argue that the Fed has done the same with us folks in the investor class. Just like rats we are conditioned that buying any dip no matter how small will be rewarded with profits. Conversely, selling stock short or betting on stock prices to fall will be punished with severe losses. This keeps the herd moving in the same direction, but it inflates the bubble higher and higher. This learned behavior response is manifested in two phenomena currently observable in today’s financial markets: BTFD and Pavlovian Short Covering (let’s call it PSC for shorthand). Unless you have been underneath a rock in the fetal position since 2009 then you already know what BTFD stands for, but if not I’ll tell you here.
BTFD stands for Buy the Fucking Dip. The first time I saw it referenced was in a YouTube video that appeared at least a few years ago. Since then, BTFD has become somewhat of an accepted truth. After all, anybody that has bought ANY dip of ANY size over the last 4 years has made money with very few exceptions. BTFD has certainly made many of its disciples very rich and that is one of the strongest positive reinforcements a human can receive. Not only does it reinforce the behavior in the initial participants, but it has created a tractor beam of groupthink. As more and more people have benefited from the learned behavior, the strength of belief has spread far and wide and its practitioners have been emboldened.
The flip side of the reinforced behavioral response is Pavlovian Short Covering. This is the act of reflexively covering short positions at the first sign of a return of strength to the bull side. This learned behavior is based on negative stimulus exerted upon bears time after time over the last 4 years. The tactics used to elicit this PSC is mainly through extreme, and some would say purposeful, manufactured violent short squeezes. Often these bear traps are sprung in the dead of night. Index futures rise in overnight trading creating a rush to cover short positions into the opening bell. Other times at key moments when the market is threatening to roll-over, there is an almost “magical” news item that comes out creating the squeeze. Sometimes, there’s no news at all, but a certain mysterious “hand of the Patron Saint of Bulltards” comes in and ramps the futures from certain failure. This hand of God typically lifts price up and past key areas where bears generally cover their short bets to avoid further and certain excruciating pain.
Any and all of these scenarios trigger PSC, and once it begins, a feedback loop comprised of weak handed short sellers and conditioned dip buyers combine into a glorious symphony of Federal Reserve operant conditioned rats.
Now this is all fine and good until somebody pokes an eye out. This conditioning is based on experience and results that have been extremely effective in the bull-run off the 2009 S&P lows. At SOME POINT however, (I would say that point has already arrived, but some will disagree) the trend changes, and the great Bernanke Bubble pops.
When this happens, the extreme conditioning response cultivated over the past 4+ years will serve to exacerbate the eventual declines. Initially bulls will not sell their positions when the market weakens and may instead continue to aggressively buy the dip. After all this has worked like a charm in the past – why change now? Bears on the other hand, gun shy and wary of all of the relentless traps, will not be eager to short, thus creating no fuel for squeezes.
Combine all this with the fact that there are currently many crowded trades due to the narrowing participation of stocks to the recent rally (see Market Halitosis for more on this). If things turn south the low volume on the exchanges will make declines more severe. Also, there is the very real possibility that if things get really ugly then the High Frequency bid will evaporate, further lowering liquidity. Thus the unique set of stimuli creating these learned responses will eventually be the fuel that enables real conflagration to erupt. This will be the point that everyone realizes that the new phrase to learn is STFR or Sell the Fucking Rip.
I did not create this Price Is Truth blog to specifically talk about stocks or Technical Analysis although I have many thoughts on the subject.
From time to time however, I may post thoughts about current market conditions if they can illustrate a point or if I feel it is worthwhile. This is one of those times.
You see, in a strongly trending market- up or down – certain technical indicators are rendered useless and others take on additional import. One long term indicator I have been watching since November of 2012 (yes – that is a long time to wait for a trigger) is the Ratio Adjusted Summation Index (RASI) which you can pull up on Stockcharts.com as $NYSI.
This is an adaptation of the standard and widely watched market breadth indicator, the McClellan Oscillator ($NYMO) and the Summation Index ($NYSIT) developed in 1969 by Sherman and Marian McClellan. If you wish to read more about this – click here for information found on the most excellent McClellan Financial Publications website.
Anyhow back in November 2012 they put out a weekly Chart in Focus article that basically stated that most significant tops in the market could not come without a divergence between new highs and the RASI failing to hold the +500 level.
At the time the article came out the RASI had dipped below the 0 line and had bottomed and Tom McClellan (editor of both The McClellan Market Report and son of Sherman and the late Marian McClellan) speculated that the summation index would show a “neat trick” and provide the indication of fresh liquidity to fuel the market advance to new highs. He was proven correct.
However the end of the article provided another bit of advice (emphasis mine):
“It is at the moment when the RASI cannot climb back up +500 that its other big magic trick becomes evident“….”Thus far, we have not seen such a failure yet. It is really not typical for the stock market to see an important top at a really high Summation Index level, like the raw value high of +3689 seen back on Sep. 21, 2012 (RASI equivalent: +888). A much more normal resolution is to see a dip down toward neutral like what we have just seen, and then a failing attempt for the RASI to climb back up above +500. If we see that unfold in the next few weeks, with a failure by the RASI to climb back up above +500, then we’ll know that the typical weakness of the first year of a new presidential term is playing out according to the normal script.”
As it turned out, the RASI briefly stalled out at the +500 level but the next week powered higher and this indeed was the exact beginning of the 20%+ rally we have experienced since late November.
We are now in a situation that seems to suggest the long awaited divergence is coming to fruition and that this absolutely massive rally (and possibly even the longer 4+ year rally off the 666 SPX lows) may be showing it is ready to give up the ghost.
To wit, please see the most succinct and excellent chart by Jackdamn on Stocktwits that appeared yesterday:
As you can plainly see, the $NYSI has failed at the +500 level after the $NYA has made marginal new highs. While this looks less than significant to the untrained eye, I encourage you to look at the July 2011 time frame to the left of the chart at the other time that this setup showed itself (although the NYSE did not make all time highs that time).
Please note that the NYSE fell from 8500 to 6500 in +/- 40 trading sessions (~25% drawdown). With the NYSE up 48% ($SPX up 59%) from those Oct 2011 lows we are now at a very tenuous moment.
This bad breadth could be a real nail in the coffin for the 2009-2013 bull run or it could just be one more indicator or divergence that gets blown away by POMO injections of liquidity and Central Bank largesse.
Time will tell, but I will wind down this post with a comment that Tom McClellan just wrote in his most recent Chart in Focus article that I take as a bit of a warning and a bookend to his Nov 2012 article:
“One of the topics that we have covered recently in our McClellan Market Report newsletter and our Daily Edition is the way that the NYSE’s A-D Line is finally showing divergences relative to prices. And that message is getting amplified by seeing the Ratio-Adjusted Summation Index (RASI) turning down at the +500 level, which is a sign that the push to marginally higher price highs does not have liquidity behind it. There are really useful messages that one can take from market breadth data, when sophisticated indicators and proper interpretation are applied. “
His understated tone belies what I believe is the true import of this signal. I waited 9 months for it, but most impulsive BTFD bulls would not understand this type of patience and would probably chuckle at my conclusions.
I respond to that thought with an old saying: Revenge is a dish best served cold.
Don’t say you were not warned.