The Mindful Investor

David Keller
About the author: , CMT, is the President and Chief Strategist at Sierra Alpha Research LLC, a boutique investment research firm focused on managing risk through market awareness. He was previously a Managing Director of Research for Fidelity Investments in Boston, as well as a Past President of the Chartered Market Technician (CMT) Association. Learn More

Latest Posts

The Mindful Investor

Gathering Evidence

by David Keller

Humans are emotional beings, generally making decisions based on their emotional state. Consequently, when the market moves against your positions, you will most likely have a visceral reaction to that event. The fear of losing and/or the fear of missing out are often the causes of bad investment decisions. In his book Mastering the Market Cycle, Howard Marks wrote that “[a] lack of emotionality is a gift (in investing, that is, but perhaps not in other areas, like marriage).” So I guess the secret is to just ignore our emotional reactions Read More 

The Mindful Investor

Bad Overbought Or Good Overbought?

by David Keller

Question: When can “overbought” be a good thing? Answer: When something becomes really overbought. Allow me to explain. The Relative Strength Index (RSI) is one of the most common ways to measure price momentum, ranging from 0 to 100.  When the RSI becomes overbought, the price has risen too high too quickly, generally leading to a downside correction. When the RSI becomes oversold, the price has dropped too low too quickly and you’d expect an upside rally to compensate. That’s the simple interpretation, anyway. A deeper look into RSI shows Read More 

The Mindful Investor

Defrosting the Markets: Thoughts on the January Barometer

by David Keller

I’ve written several articles regarding seasonal trends in the markets, including the four-year Presidential Cycle, the “Sell in May” phenomenon, and even general thoughts on cyclical patterns in price. This time of year, we’re faced with a very interesting anomaly known as the January Barometer. This is different from the January Effect, where January tends to start strong due to money managers going to back to “risk on” following end-of-year window dressing. You also tend to see small caps outperform large caps due to the same reason - that pattern has Read More 

The Mindful Investor

Forget the Price and Anchor to the Trend

by David Keller

Anchoring is a behavioral phenomenon wherein we, as people, lock in to a specific reference point that then affects our subsequent decisions. When I taught technical analysis at Brandeis University, I asked one group of students to tell me where the S&P 500 would be at the end of the semester. I followed this up by asking a different group of students to answer the same question, but I told them that I’d asked another group of students already and their average answer was about 10% below current levels. Which group of students do you think came up with a Read More 

The Mindful Investor

Investors Don't Like to Lose

by David Keller

Everyone believed they had a sound approach to investment during the extended bull market of 2009-2018.  When everything’s gaining in price, slowly and steadily, it’s easy for confidence in your process to become overconfidence in your process. To quote a phrase, “Never confuse brains with a bull market.” Through late 2017, many investors had crossed the line from bullish to euphoric. The rapid rise in Bitcoin was perhaps the best example of this euphoria - people just couldn’t imagine the market going lower. Once the market dropped Read More 

The Mindful Investor

Seasonal Trends Are Not Seasonal Certainties

by David Keller

“We’re entering the seasonally strongest part of the year.” “The New Year tends to be very good for small caps.” “Year three of the Presidential Cycle tends to be good for stocks.” “The Friday after Thanksgiving is usually a bullish day on lighter volume.” How many of these quotes have you heard in recent weeks? I have no doubt there is a cyclical nature to the financial markets.  I would even go so far as to say that there is a natural rhythm to the markets. Edward Dewey performed foundational work in the mid-1900s on the presence of cycles, not just in financial data Read More 

The Mindful Investor

When Emotions Take Over

by David Keller

I recently returned from a 10-day trip to Kuala Lumpur and Singapore. This was my first time in Malaysia, where I spoke at the IFTA Annual Conference along with my fellow StockCharts commentators Julius de Kempenaer and Martin Pring. After the conference, when I was checking out of the hotel in Kuala Lumpur, I was already thinking about the upcoming flight to Singapore and mentally preparing for meetings the next day. I distractedly reviewed the hotel charges and reached for my wallet. As I went for my credit card, everything stopped.  My credit card was gone. My Read More 

The Mindful Investor

The S&P's Sudden Loss of Altitude

by David Keller

I was panicked. On my previous training flight, I had put the Cessna 172 into a nose dive.  That’s right, in my attempt to demonstrate a power-off stall, I had literally pointed the airplane directly at the ground.  Which is not a good idea if you want to remain in the air! I will never forget the sensation as my heart jumped into my throat.  All I saw out the front window was the ground.  Life was in slow motion. Luckily, my flight instructor had immediately taken the controls and brought us back to straight and level flight.  And we Read More 

The Mindful Investor

Beating Biases With Behavioral Checklists

by David Keller

During my ChartCon 2018 presentation entitled “The Mindless Investor and the Mindful Investor”, I shared the technical checklist that I use to teach a disciplined process for technical analysis. I received a question after the session on whether I had a “behavioral checklist” to help minimize the impact of behavioral biases in investment decisions.  I have never had a behavioral checklist, but I spent some time thinking through what might be included.  Most behavioral biases are caused by making decisions because of your emotional state, instead of making Read More 

The Mindful Investor

Welcome to The Mindful Investor

by David Keller

It is with great pleasure that I welcome you to my new blog on StockCharts.com entitled The Mindful Investor.  I have been a StockCharts.com user for years but have become even more impressed as I’ve gotten to know the great people behind this website.  I’m honored to be a part of StockCharts.com and look forward to many good things in the coming years. The idea for this blog came from my presentation at ChartCon 2018, where I presented a session called “The Mindless Investor and the Mindful Investor.”  During a particularly stressful period in my life, I was introduced to Read More 

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