Posted on June 20 , 2009 In Weekly Updates

June 20th ’09 Update

We have a full rack of Almanac updates ahead of us.  I noticed as this week wore on that things were setting up perfectly for a slight retracement up to the 920-930 level, and a continued fall this next week if things got into gear on the bear side.  Options expiry also has this tendency to delay action that seems to be worked into the market, such as large down moves.  This next week, Monday and Friday are bullish, and Tuesday through Thursday are bearish.  I rarely see a pattern like this that so perfectly fits, and in all likelihood, it will not perfectly express itself.  For those selling options, legging into some sold call spreads or skewed Iron Condors on Monday wouldn’t be a bad plan, unless of course you did them on Friday around the open.

The market itself is getting a bit toppy, and its been due for a correction for months, so this may finally be it.  However, I doubt the intensity of this correction will match any of the bearish action we are seen over the last year or more.  Vix is at a great launching point, lots of strong stocks have broken trend and are rallying right back up to the backside of their trend line, and volume studies are pointing down (and have been for awhile).  So there are lots of high probability trades out there to the downside, and later on will be good candidates to pick up cheaper.

This week, I will explain a bit on how you can use these Almanac/weekly updates.  See I rarely give out straight advice to buy or sell, and while I am open to it, I do not usually give out the trades I am putting on.  There are a few reasons for this.  First of all, with the trades I am placing, many times I am experimenting with systems, tweaking things here and there, or doing a 20 trade run (will talk about that in future articles) of trades a certain way.  In the future, I will start sharing more trades, but when most of my trades are put into the “experimental” column, it would be unfair to publish a trade that I do not always expect to be a winner, but that fits the big picture of my portfolio.  In other words, If I gave you one trade, I would feel obligated to give you the trade that hedges said trade, and the other trades that would affect the overall portfolio.

I also have some news for you that may be quite surprising: the actual trades on a trade for trade basis that you place do not really matter.  As a whole, they matter, but one of the largest mistakes that traders make is to look for trades that they think will be winners.  It is almost a paradox, you are in this to make money, wouldnt you want to find trades that you think have a reasonable chance of winning said money?  Well yes and no.  ‘Yes’ in that when you place a trade, you want there to be a clear and defined edge to that trade.  An edge is just an indication of one thing happening over another across a sample set of trades.  ‘No’ in that any single trade is a toss up, so expecting it to win is actually a nice way of saying: I would like to be emotional in the near future due to my expectations being dashed, bring on the pain!

So when you see trade ideas that people share, great!  But know in your head that if you take them, they make up a part of the WHOLE.  They are not an end in themselves: whether they win or not really does not matter.  Next time you see a trade, instead of asking yourself whether you think this trade will be a winner, or if this trade looks “good” to you, ask yourself whether this trade, no matter its outcome, fits inside your ongoing path of trading consistency.  If it does, place it and let go, if it doesn’t, then there is always another one.
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So the way to use these Almanacs and my daily updates is to get trades on your path of consistency.  These updates are sometimes vague, and full of feelings, but I am telling you, that the given trade you put on this week does not really matter all that much.  You just want to be in the direction of consistency, and these updates will give you the guidelines to do it.  To the left, you will see a couple of odd boxes, the first is a picture of the McClellan Oscillator that I use to call short term changes.  The second is the McClellan Summation index that I use to call longer term swings.  As you can see, the oscillator hit oversold levels around -200 and bounced (my call for ES 920-930 this last week).  The long term summation index has rolled over its MA and is heading down.  It tends to trend very well in one direction when it gets going, hence my talk about a correction in the market.  These arent the only tools I used this week, just a couple, I will show you more in the coming weeks ahead.

Happy trading in the week ahead, thanks for reading.

Posted on June 15 , 2009 In Announcements

The Offical Launch of Trading in the Now.

Welcome!

Trading in the Now is Officially a ‘GO!’  If you are here after receiving an email, you can skip this post and browse at your own leisure.  Otherwise, read below to find out what this site is all about.

As many of you know, I have been on a journey of mastery in trading the stock market, and this website is the culmination of my hard work and dedication to this craft. Trading in the Now has two purposes that I wish to share with you.

First, the website will be a place that traders of any experience can come and access top quality static content that will aid them in creating the results that they want. However, this content will not be limited to just traders, and while most of the examples are about trading, the wisdom from these articles reaches into all aspects of life. Most of these articles will have exercises and practices that offer real world ways to implement the ideas and concepts that you read about. The first article written only for this website is called “The Now” and can be accessed on the sidebar on the right. This should give you a taste of the things to come.

Secondly, the website will offer dynamic content in two forms. There will be daily updates on market internals that should aid day traders in making decisions. These will come through twitter (twitter.com/tarigal) and mytrade (mytrade.com/tarigal), which can be seen on the sidebar of the website, and both of which offer free sign up and ease of use if direct access is desired. The second form of content will be weekly updates which will be posted directly on the website and will offer almanac updates, sentiment outlooks for the weeks ahead, and information that will help swing and longer term traders. These are usually posted sometime between Friday and Sunday.

I am glad to welcome you to the site. I know that if you take the time to read through some of the content, you will take something away from the lessons that I have paid for to learn. Also, if you find any dead links or something that isn’t working quite right, feel free to email me and let me know. Make sure you read the introduction and the site rules (listed below) if you wish to post, and have a joyful day.

Love,

Lucas

P.S. If you want to hear more about what this site has to offer, read “First Post of Trading in the Now” posted on May 30th.

Posted on June 4 , 2009 In Announcements

Out of Town

I will be going out of town tomorrow and will not be back until the Monday after next. So there will be no morning updates tomorrow or the next week. This also means that this week, as well as next, will not have the regular weekly update. When I get back, the website should be all up and running, with all the buttons working properly. I will have an official launch with some new content as well when I get back.

Here are the Almanac Updates for next week and the week after:

Next Week: Bearish Monday and Bullish Friday

Week After Next: Bullish Monday, Wednesday, and Bearish Friday. This is also triple witching, so usually the first few days have a bullish tint to them. This reading makes a lot of sense to me.

Have some great trading while I am gone!

Posted on May 30 , 2009 In Weekly Updates

First Post of Trading in the Now!

Welcome to the first official update of Trading in the Now! If you are new, the structure of these weekly updates usually starts off with almanac readings, followed by my musings on the market. This week the Almanac is giving us a bullish Monday and Tuesday with the rest of the week a toss up. The Almanac also warns to look for a longer term MACD sell signal in the NASDAQ. The creators of the Almanac have a system where they only invest in the “best eight months” of the year. Obviously, the best months are not the summer months for bullish returns. The market chop that I talked about a couple weeks ago seems to be playing itself out well.

I want to talk this week a bit about what this blog is going to focus on, and what types of things will be offered here. On the right, there will be static content that is available at all times, for free, that offers advice to those on the trading path (under articles). Make sure you read the introduction and the site rules if you plan on sticking around as well.

This blog is going to focus on the third option when trading, the ignored option. At any time, you can buy, sell, or wait. Almost every book out there focuses on when to buy and sell, which is definitely needed knowledge. Professionals have mastered the third option, usually through years of practice, pain, and personal growth. As a trader, you start to make serious breakthroughs when you learn how to “wait.” The word “Wait” here is not in the negative context that you would get while you’re on hold with Best Buy or something: “Thank you for waiting.”

When I use “wait” in this context, I am talking about the ability to do nothing, knowing that this is the absolute right thing to do at the time, and being at complete peace with your-self. The ability to wait does not give any context to the amount of time that it entails. This means that you can come completely into this moment between day trades, maybe only for 15 minutes, or turn off your computer for a few months at a time until the market changes character (like the almanac investor idea that doesn’t invest four months out of the year). The saying “let your winners run” also plays on the ability to wait. However it is simply one aspect of waiting. If you are like me, then there have been lots of times when I knew I should have taken profits, but I “let my winners run,” and gave all those profits back.

So if you have not noticed by now, this ability to wait, or as Jesse Livermore says, to “sit tight,” is a pretty vague concept, which is probably why most books have not touched on it too much. This site is going to offer pointers that will point in the direction of how best to master this ability, because there are no hard fast rules. The pros in this business who have been doing this for ages have mastered this third ability; in fact, most of the growth that goes on after the first year or so of trading is COMPLETELY in this “waiting” field. There are tons of ways to skin a cat, and the ability to buy or sell is not really all that hard. I know that after 6 months in the market, I had a pretty good sense of what the market was acting like, and where it might go. Many people who get into the market find this sense of ease at analysis when they first start, they just get this sense of how the market will act, and they are often right. So why does it take years of practice, study, and pain to get to the point where you can be consistently profitable? It is all in the ability to wait, which implies emotional stability, and all the attributes we associate with professionals.

In the coming weeks and months, I will be writing up articles on how you can bring this patience into your life. It takes time to gain this ability; there is no way around it. You cannot program it into your head like a buy or sell signal: it is vague, never perfect, and reaches into areas of your life that have nothing to do with trading. I have made large strides on this journey, but for every mile that I cover, two miles show up. The journey has been challenging, but well worth it. Welcome to this blog, I hope you find it useful in whatever capacity you use it in.

Love,

Lucas

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