Warning: Proceed With Caution
Hope you had a great Memorial Day Weekend. For me, it was all about lacrosse games and hanging out with the family… the perfect kind of holiday in my book!
Over the weekend, I caught up with a friend of mine. He told me something that reminded me of most traders these days…
He told me this story,
“The other day, I went for an afternoon run on this awesome mountain trail by my house. I was just cruising up this trail, and enjoying every second of the mountain air.
You see, when I arrived at the trailhead, the cool weather felt so nice that I didn’t give much thought to the grey storm clouds rolling in over the foothills.
I had been on the mountain for a few hours… feeling absolutely invigorated… when I felt a slight sprinkle. Apparently the storm clouds were right on top of me. But it actually felt kind of good since I was hot and sweating from running.
I was on a pretty good pace, and about 3/4 of the the way up, I crossed paths with this guy who had just reached the top of the mountain, and was heading back down.
He goes, “Dude, I wouldn’t keep going if I were you. It’s getting pretty bad at the top of the mountain. Starting to rain pretty hard, and even saw some lightening. I’d turn around if I were you.”
Now this trail isn’t some leisurely mountain stroll. It was pretty tough. And I certainly wasn’t about to let a little bit of rain stop me this close to the summit.
I thanked him, but dismissed his warning entirely.
It was about 10 minutes later, as the summit is coming in to view, that a “sudden” hail storm hit the mountain.
Before I knew it I was getting pelted with marble sized hail!
I took cover under this huge tree and after about 15 minutes of violent hail, the storm passed. I made it up to the summit and as I rested at the top for a mew moments, I reflected at what had just happened.
I had been warned by someone with personal, hands on experience of the conditions of the mountain. But I didn’t take it. I brushed it off. I had an agenda, and I was committed to it. If I had just listened, I might not have so many welts right now from the hail! ”
A lot of traders make the same mistake my buddy did. They hear the warning signs and cautions, but they are so focused on squeezing every dime out of the market that they possibly can that they don’t heed it.
If you haven’t already, watch the video from my last post right below.
In it, Mark Fisher who is the founder of MBF Clearing Corporation (which is one of the largest futures clearing corporations in the world), gives a warning to traders who are bullish… and this guy has a ton of insight in the the market.
I have been talking about the storm thats brewing for months now. But unlike my friend in the hail storm, I’m not running for cover. I can switch strategies very easily and make a killing while everyone else hides.
How many traders are really heeding the warnings of a market correction that are everywhere? Not sure exactly… but leave a comment below, and let me know what you think.
Jeff Z
2 Responses to “Warning: Proceed With Caution”
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I’m already short — have been for awhile.
Hi Jeff, interesting story and very true to life, warnings repetedly go unheeded. I was in very bearish positions until this morning when I all of a sudden I realized that this market is not headed for a black friday or black monday but is acually bottoming out at this level. Daily has gone into uptrends on some of my favorite indicators MACD and STOCH and Williams , and weekly’s are very near the bottom of the range still open but below -80 on the Williams headed for -100, the only concern I have at this point is my 2 Line EMA,it turned negative on Monday, not a good sign but I think we’ll be higher by experation never the less. Bye for now