Hypoxia is a danger to airmen. The condition is known to all pilots, even the private pilots, such as me, and others who fly small airplanes. Hypoxia is a condition caused by oxygen depletion. Flying a small airplane to extreme levels can cause the level of oxygen in the air to get to a dangerously low level.
It has been said that Hypoxia can happen so slowly that one does not even notice it; until it is too late. Studies have shown that one of the symptoms of hypoxia is a feeling of light headedness, actually to the point of euphoria. If that is true, I have always wondered why those people who decide to take their own life didn’t try to arrange to do it by inducing hypoxia. There are, in my opinion, no good ways to die. But there are certainly some ways that are better than others. Surely a feeling of euphoria at the end has to be one of those better ways.
So what the hell does hypoxia have to do with trading securities? As a short term trader I don’t think too much about the long term trends in the market when actually making a trade. But I do watch the markets long term trends in general. When markets get \to extreme values, even the short term trader can take advantage of that because the moves in the opposite direction when the market reverses can be quite large and profitable.
Hypoxia for a pilot is a result of flying too high without adequate supplemental oxygen. The current stock market is beginning to look like a pilot that is flying a little too high with a questionable oxygen supply. The oxygen supply for this market, in my opinion has been primarily provided by the FED and their money printing policies. The underlying economics of our markets are not very encouraging. There is a limit to what the FED can do; and a limit to how long they can keep it up.
There is a limit to how high a pilot can fly a non-jet aircraft without turbo charging the engine. This market, to me is like a piston engine aircraft and the FED is the turbo-charger. Even with turbo-charging, a piston engine aircraft can only fly so high. And should the turbo-charger fail it will start coming down and coming down very fast.
So I look at this market and see the early signs of Hypoxia. The euphoria appears to be setting in; although it can last for quite awhile the end result is far from pleasant.
That’s just my thoughts on the subject.
Trade with caution and I wish you the best of luck in your results.