Psychofinancial bind

Plummeting markets can seize hold of your personality, internalizing behavior that can control your investing decisions for years to come.
"smart money" have almost no discipline about selling stocks. They make most of their decisions unconsciously and often don't know why they really bought or sold a particular stock. Most professional money managers unconsciously create patterns of behavior where wrong deed feeds upon wrong deed.
This is one of the reasons why so few active stock pickers can beat the market. According to Standard & Poor's, global and domestic stock funds fail to beat the market 70% of the time. We're just not wired for investing. We don't control it, it controls us.
You're only safe,if "you have a clear philosophy and approach to your investing and have built rigor, process and discipline to implement it. Then you'll understand that at times what you do will be out of favor but you'll remain committed to something bigger than you are that you know has validity."
Market losses affect the brain in the same way excrement or a foul smell does. We recoil without thinking, as if we're confronted with a disgusting and possibly harmful physical presence. This reaction stems from our unconscious desire to immediately end the pain.
"The experience of losing $1 is three times more emotionally impacting than the experience of winning $1,"If it goes up $3, but then drops $1 from its high before we sell it, we feel pain even though we're able to sell at a profit. That $2 net gain just isn't enough.
"Investors are also reluctant to accept and realize losses because the very act of doing so proves that their first judgment was wrong. Investors who accept losses can no longer prattle to their loved ones, 'Honey, it's only a paper loss. Just wait. It will come back.'" This is the classic behavior of the problem gambler who wants another spin at the roulette table because the only sure path to not recouping losses is to leave the table.

Tracking the Dow on Friday,21/11/08.

DOW FUTURES EXPIRY DAY.

9:30am:--A 100.0 points gap up followed by a shooting star.

Dell (DELL) posted better-than-expected earnings per share results for the third quarter.

10:30am:--A bottom spin.

Honda Motor (HMC) is cutting production at some of its global factories.

11:30am:--Breakaway ascending bull.

Crude oil futures have rebounded 2.5% to $50.65 per barrel early on.

12:30pm:--Ascending soldiers with a shooting star.

GE is in talks with the Government of Singapore Investment Corp. regarding possible joint investments.

1:30pm:--Bearish inverted hammer.

Citi is reportedly weighing strategic options regarding its future, but claims it wants to keep itself together.

2:30pm:--Bearish graveyard doji.

Chicago Fed President Evans stated that growth is likely to be quite sluggish through much of 2009 as the U.S. faces a protracted period of weak growth.

3:30pm:--A sudden bull spike up.

Ford Motor (F 1.25, -0.14) is having its bank apply for Federal Reserve membership in order to obtain FDIC insurance, Reuters reported.General Motors (GM 2.68, -0.20), GMAC, submitted an application to be granted bank status.

4:00pm:--Unshaven bull spike with a shooting star/graveyard doji.

A last one hour into trading spike is too artificial.It's just a short-covering of position on index expiry day.
Friday's candlestick resembles a bullish hammer.Looks like goin' to be a bull-trap.The bulls can't survive at the bear pivot border line.

Disaster will strike again.

Investors got a little bit of clarity regarding the future face of the Treasury team; President-Elect Obama has nominated New York Fed President Geitner for Treasury Secretary. Obama is expected to announce the rest of his economic team Monday.