Irrational Markets

It seems that no matter how bad an economic number is or how high stocks go, they will continue higher. Almost every economic number that has come out in the last 10 months has had almost no effect in creating fear or volatility in the stock market. As I type, the Russell 2000 is at an all time high, US dollar is at a 3 year low, and the Volatility Index is near record lows as well. We are in a exteremly low volume trading environment where every dip is bought and shear momentum continues to drive stocks higher on very light volume. The FED continues with there stimulus until June and Commodities continue there climb to record highs while the US dollar plunges. Is it smart to be buying when everything is at a record high? 2 years ago people were selling. Has the economy recovered so much that stocks are back at record highs? Or is the economic recovery irrelevant to the stock market?
The Trend will continue until it doesn't. By the looks of it, IWM should blast higher now that there is clearly ZERO resistance above and the FED is backing the market with stimulus for another 2 months. As we blast higher, volatility should expand as new retail traders enter long and volume increases.

T.U. day 5 +217

After having TF go against me almost 50pts and then waiting for it to comeback, I covered my SWING short on TF near break even today and made some change on a CL short to end the day positive. My original plan with the TF SWING short when I took it was to add once it went against me 30pts (I was only short 1 car). But TF went almost 50 pts against me as the market blasted higher after the Japan earthquake. I never added to the TF short and just waited to see how far it would come back to my breakeven point. I decided to add 1 car today near the morning HOD on a short signal and covered the whole TF short for a 2.5pt loss. I did some after noon scalping on TF and CL as well.

This last week, starting on Sunday I could sense a lot of nervousness, maybe hysteria in the metals and oil market, seeing the news from PIMCO's Bill Gross on Saturday and an unusual amount of comments on zerohedge on a sunday night with oil, gold, silver, and corn near or at record highs. It was a gap up and fade on monday, and we just hit a low point today(Thursday) in stocks and a low point in the aforementioned commodities yesterday. I continue to see relentless strength in almost all currencies pairs against the US dollar and a never ending melt up in commodities. When will it end? Perhaps the end of QE2(June), or whenever the FED accepts the reality that inflation has got out of control and they have no choice but to raise rates to help save the dollar and slow the parabolic rise of commodities.

There is a nice chart and article out from Russ Winters showing "The Fed’s aggressive Treasury monetization has been the causa proxima (90-percent correlation) to the pedal-to-the-metal Minsky Meltup in commodities."(From www.WallstreetExaminer.com)

I have a lot of thoughts in my head of how I should have been trading the last 6 years, the mistakes I made and still make, and the choices I have going forward. The markets will always be here to trade. In the last 9 months of trading, using market profile trading setups would have been very profitable (ie buying value area low each day with the current trend going up).

T.U. Net -1,485
I should not set any time restrictions or put any added pressure on myself to make money, because that extra stress can lead me to make bad decisions by increasing leverage when I shouldn't.

Outside of trading, I am having a lot of fun. I've been working on and customizing my truck, driving my motorcycle, going to the gym, running on trails near the river, watching movies, cooking, and making plans for more outdoor adventures. My next plan is to learn Kayaking and to make a trip to Yosemite or Highway 1(Big Sur) on my motorcycle. If anyone would like to reach me, my email- highprobabilitytrading(AT)gmail.com