Love the Hate.


Welcome to the Hate Index, my work-in-progress theory of trading the financial markets.

There are many theories about how to trade the markets. There are some who feel that markets are rational, others who think it’s random and still others who think the market is as emotional as a Greek Goddess. I am in the Greek Goddess camp.

I believe the markets move on one thing: emotion. And, specifically, fear. In other words, they move based on the hate that’s out there. And, believe me, it’s always out there – even when things are looking peachy.

There are many kinds of hate.

Greed, which many people feel is what drives crazy bull markets, is just the fear of not having enough. Hey, if you felt you had enough, would you really want to jump on the bandwagon and try to get more?

Panic is the fear of losing control. Lose all your cash money and your lady won’t love you anymore, you won’t be able to buy your kid the G.I. Joe with the Kung Fu grip and the repo man will come repossess your car, your house and your manhood. Sucks, huh?

Complacency is a mixture of both. When the market is complacent, there isn’t rabid participation on the upside. Instead, it kind of meanders along. Some will tell you that “this time it’s different.” But others are wary and don’t want to wade in with both feet.

Any way you slice it, the market is not a 60’s-style love-in. It’s a dog-eat-dog world populated by all sorts of characters, most of whom are trying to pull every last ducat out of the ring before they have a stress meltdown. Some survive – and thrive. Most don’t.

The Hate Index is a record. A way of measuring the manner in which we all currently hate each other’s guts right now and a gauge of how much we hate each other. (In the market only. For society at large, I’d suggest an episode of Jerry Springer or American Idol.)

Love may make the world go ’round, but hate is ringing the opening and closing bells.

Over the coming weeks and months, I’ll be introducing measurements of the Hate Levels in the market. Right now, I’m still working it all out, so please feel free to leave comments, insults and otherwise derogatory remarks for me to chew on.

When it comes to the markets, we all may hate each other, but I still love the markets. Can’t you feel the love? You can’t? Crap.


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