I saw this while touring Meow Wolf, an art installation in Santa Fe, NM. When I snapped the picture, I knew I would use this slogan for a Daily, but had no idea how, when or why.

After the blast off with runaway gaps to new highs in several instruments on Wednesday, today’s modest but potentially foreboding selloff brought this slogan to mind.

The market and its players are full of caricatures. Most obvious are the Bulls and Bears.

Many traders will tell you that to avoid becoming a caricuture of yourself as a bull or bear requires both inductive and deductive reasoning.

Deductive reasoning or top-down logic involves drawing general conclusions from specifics.

Inductive reasoning or bottom-up thinking involves drawing specific conclusions from generalities.

Therefore, has the current bull market become a caricuture of itself and should we avoid it?

Using Deductive thinking, we are given facts and we use these facts to come up with a possible outcome.

However, what if the facts given to us are faulty or worse yet fake?The result is flawed analysis.

This year, many traders have had difficulty discerning real facts from alternative facts. That has made it tough to rely on deductive thinking as an investment tool to buy into this market.

Using Inductive reasoning, we look at the data provided to us with a different set of eyes and do not accept any of the data as factual. That teaches traders to break down everything and then reanalyze it through different eyes.

On the one hand since price is factual, using deductive reasoning, the market indicates more upside. Yet, what else besides price is factual concerning the market?

One example, interest rates have not in fact been raised by the Federal Reserve. The only fact so far, is that the Fed has suggested they will “maybe” raise.

Nevertheless, the market sold off today in fear of rising rates. Commodities gave back a lot of yesterday’s gains and the U.S. Dollar gained strength.

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