What Would You Do?

A part of market analysis often overlooked is psychological analysis. We all too often fail to consider the motivations of both ourselves and the rest of the market.

In the 1970's and 80's, some of the most successful traders came from other professions. You might expect professional gamblers to do well, and some did. But there were also a few psychologists that made their mark.

Jake Bernstein was one of the more well known. He was a psychologist-turned-trader, and applied his previous profession to his new one. His 1982 book The Investor's Quotient not only explored the psychology of a successful trader, but also of ‘the market'. The techniques can be applied not only to yourself, but to understanding the motivations of all the other traders and investors comprising ‘the market'.

Take the current situation. The S&P 500 has made at least 7 major attempts to penetrate the 2115 to 2135 area. The most recent attempt has failed, and the S&P has pulled back 3.3% so far, as traders decided it was better to book profits.

Who are the participants trading this market, what are their motivations, what could have caused the 7th retreat from that resistance area, and what is the potential for the remaining 7 weeks in the year?

You really need to answer just one simple question, after thinking about this:

There are approximately 9,000 mutual funds in existence. Picture yourself as a trader for a mutual fund. Your calendar year results are going to be seen, and extensively analyzed, by not only the investors in your mutual fund, but also the public, and more importantly, the fund managers. You will most likely get a bonus, possibly a 6 or 7 figure bonus that is based on your performance for 2015. Your performance is what will keep investor's money in the fund, and the fund managers will make that clear to you by the size, if any, of the bonus.

There are approximately 8,000 hedge funds in existence. You will get a share of the profits (and seldom have to share the losses) if you run a successful hedge fund. That's the key word – successful. Your year-end results, as well as your year-end holdings, will be carefully scrutinized. If you keep your investors, you get to continue racking your share of the gains. If they decide to pull out and go to another hedge fund with a better track record, there may be no beachfront retreat on St. Barts in your future.

There are approximately 220,000 Personal Financial Advisors in the U.S., helping individual investors make decisions about which stocks or funds to buy. According to the Bureau of Labor Statistics, their median income is $67,520 per year (as of 2012). They do not get 7 figure bonuses. But every one of them is likely thinking about the recommendations they make, and that their results will be closely scrutinized at the end of the year. Keeping every client is their goal.

Now, the question is simple. How likely is it that any of the participants mentioned above are going to risk their performance record so far this year on another failed market rally, with only 7 weeks left in the year?

What would you do? Answer that, and you will likely know what the market will do for the rest of the year.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

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Gregg Harris is the Chief Technical Strategist at MarketTamer.com.

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The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.

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MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.