The Big Picture for the Week of July 1, 2012

Yesterday in the middle of the day I looked at a chart for the S&P 500 and noticed the following important formation as follows.

Ok, a humor attempt as the market blew off some steam and rocketed higher. Based on what I read and my twitter feed I would say the actual trading seemed far more euphoric than the sentiment that exists but that is hard to say. Going by the book, the more skepticism that exists the better chance the market can still work higher and if participants are giddy then it would probably go right back to where it came from. We'll know soon enough.

There is nothing in the previous paragraph that you have not read before somewhere. A point made here repeatedly over the years is that although the details might change, markets tend to behave the same which is hopefully comforting and might make navigating a market cycle a little easier. There are aspects of market movements that are reasonably predictable. There are no absolutes and no guarantees but understanding normal market behavior might keep you away from the herd mentality.

On an unrelated but positive note another firefighter and I performed CPR on a medical call yesterday and it worked!