Stocks ending week with power following roller-coaster ride.

"The government jobs report was nothing short of spectacular for stock investors, pointing to a textbook 'goldilocks economy' with solid growth and low inflation. Non-farm payrolls increased by 266,000 in November, well above the consensus estimate of 181,000 and last month's revised reading of 156,000. The positive revision in itself is a huge plus for bulls, and the fact that wage growth was a tad lower-than-expected confirms the muted inflationary pressures. The unemployment rate unexpectedly declined to 3.5% as well, matching the measure's recent multi-decade low, thanks to the healthy trends in the labour market."

"Politics will pose the biggest risk to financial markets in December, as the U. S.-Chinese relations could have a crucial effect on risk assets, the impeachment process will also enter its next phase, and the British elections could also cause turmoil in the usually quiet month. The strong rally of the past two months could mean that a choppier period is ahead for stocks, and even an orderly pullback may be in the cards despite the positive seasonality statistics of December. The OPEC meeting, which is scheduled for the first week of the month will likely be a tumultuous one, as Saudi Arabia is trying to pressure the cartel to increase the support of the price of oil ahead of the Initial Public Offering (IPO) of the state owned giant, Aramco."

“Most professionals agree that novices and amateurs spend far too much time studying entry techniques in relation to their true importance to successful trading. It is risk management, they agree, that really separates the winners and losers. Since the markets are not very predictable anyway, you can have a far greater impact on your bottom line by applying proper risk management techniques than by finding a new and better way to anticipate the next market top or bottom.”

for bottom fishing operators; new signal generated

we have a swing low detection, a higher low and an inside day

"Sometimes traders can feel alone in their experiences – particularly when stupid errors and large losses occur and during long, flat periods. Believe me, I have made every mistake in the book, have suffered through many sleepless nights and have had conversations with the higher powers that be. Through it all, I have never wanted to leave the trading business. I don’t love trading and I don’t hate it; it is just what I do. I love working."

Small speculators are the only one holding net long at the moment. Both commercial speculators and large speculators are now net short Russell 2000.

The market could “go either way”

“Sam’s fatal flaw...is that he had a preconceived idea of where the market would go...when conditions changed...Sam refused to accept the new evidence...Instead, Sam began to search for shreds of evidence to support his bearish case. This is a very common trait of stock market investors. Psychologists would call it ‘selective perception’. One sees only what one wants to see. Unfortunately, in the stock market, there is always some bearish evidence and some bullish evidence. You never have difficulties unearthing clues to back your viewpoint...I could argue that a year after I had turned bullish the market was higher. I could argue that I was not wrong, just ‘early’. I could stubbornly insist that I was right and the market was wrong...The fact is, I was just plain wrong, I knew deep in my bones I was wrong, but my ego got the best of me…” - Martin Zweig in Winning on Wall Street

Russell

One of my favorite scenes...