Keeping an open mind and staying flexible is very important to traders, but there are times when it is much harder to stay objective.
I'm finding it particularly difficult today to fight a growing negative bias. I'm trying to analyze exactly why I feel more pessimistic. A big part of it is that I'm finding it very difficult to find technical setups that I like. The precious metals and miners have been the leading group lately and are now quite frothy. Outside of that there haven't been any obvious themes of leadership. There have been decent movers like Yirendai (YRD), my stock of the week, but it is extremely narrow.
My ability to find new buys is always the main factor in determining my overall bias. If I'm finding plenty of things to buy, then I'm bullish regardless of what the overall market is doing. I often find myself disagreeing with people that say that the market looks great when it is up big. If you aren't buying, then it doesn't look so great to me.
The other thing affecting my view of the market is the news flow. I write all the time how price action is more important than the headlines but I'm wondering what positive catalyst we have to really move this market. At best the Fed is on hold for a while and other central bankers are delving into negative rates as they run out of ammunition.
The price action does not yet confirm this steady diet of big-picture negatives, but I attribute that mainly to short-term algorithms and other structural trading issues that are jerking stocks around. The V-shaped move last week had absolutely nothing to do with the fundamental events and the action today has a similar feel.
I'm working hard to respect this price action but I'm having a hard time. I still see good reason to be bearish but I'm not acting on that feeling right now.