This market usually has a “one track mind.” Lately, it’s all about financials. If there is turmoil with banks, brokers, hedge funds, etc. - investors are bearish. If somebody in this space says something positive like “the worst is behind us” - the market is expected to trade higher. Nevermind whether those statements are true or not or whether we’ve heard that boy cry wolf 10 times before - it works.

I know it’s really easy in this media manipulated market to focus on the headlines, but each story is important. One of the tactics of the permabulls is to isolate the market’s problems on one thing at a time - right now it happens to be financials. The danger in all of this is ignorance of everything else that poses risks to the value of your portfolio. It’s like a giant diversion used in magic or war - keep everyone focused on one thing so all the other important stuff can slip past unnoticed.

While all the writedowns were happening and the CEO hatchet jobs were happening …other stuff was going on too. Oil was hitting $95 per barrel, Turkey/PKK/Iraq/US was becoming more violent, the dollar is crumbling, some non-financial earnings were disappointing, etc. etc. Of course there were positives as well. But in the One Track Mind of this market - the good and bad are based on one thing - financials.

The hope of the bulls is that we put all our hopes and fears in that one basket. When it’s bad, they say….we’ve heard all this before, we are putting the worst behind us, the market has already discounted the bad news in financials, this dip is another great buying opportunity, blah blah blah. And many people buy that shit. When it’s good, they say…the crisis in financials is over and now the market is clear to trade back to new record highs. And many people believe that stuff too because everyone likes to be relieved and happy and optimistic. Hearing only about the financial sector for so long, they get lulled into believing that nothing else is wrong. So when the financial fearmongering disappears, it’s really easy to be happy again.

Sorry to disappoint, but we need to keep an eye on everything - not just financials. I am often told that I always see the negatives and the risks. Thanks for the compliment. Just know that I also see the positives and the rewards. My focus is to concentrate on as many pieces of information that affects the market as my mind can handle. Sometimes I wish I could have a one track mind, but that’s not who I am.