The great challenge as a market participant is of essentially the same mental character that has us interpreting the world around us in a manner that fits what we desire, and/or supports our personal biases.
Investor and author Mark Douglas calls the affliction “perceptual distortion”.
From his insightful book The Disciplined Trader:
“Perceptual distortion” occurs when our mental system automatically distorts environmental information by shaping and selectively excluding certain information to compensate for the conflict between what we expect and what the environment is offering us .
Obviously, if the markets are doing something other than what you are allowing yourself to perceive (because some, if not most, of the information the markets have to offer won’t validate what you want or hope), then something has to give. These distortions will continue until there is such a disparity between your acquired mindset and the conflicting market information that the mental defenses (illusions) will break down. This usually creates a state of shock, where you may wonder how things could get so bad so quickly.