Wednesday, July 25, 2007

Trading the COT reports.

Has anyone noticed how hard it is to trade the COT reports? This is one of the strongest bull markets in many a year and I'm guessing very few have been able to hold on to longs during the current COT long signal. You see why I don't worry about the market discounting the COT reports. The COT's typically change trend at times when emotions very strongly disagree with the signal. Ah ...the never ending battle in the investing game of fighting your emotions. The current signal is a classic example. The commercials are screaming buy but emotions are screaming the market is overbought, subprime is a landmine, inflation is out of control, The bull is historically very old, we haven't had a 10% correction in 5 years, etc., etc. Sometimes I wish I were Spock ;).