Ask Yourself This Question…
Stock index futures opened Tuesday’s session
with upside gaps after overseas markets saw a slight recovery after no new
surprises out of Iraq. The ES held its gap only to spend the 1st hour
contracting into a triangle, before breaking to a new session high and test of
R1 resistance, and essentially closing Monday’s opening gap. Range-bound was
the word of the day and despite a noontime rally attempt that quickly ran out of
steam, it took night-vision goggles to spot the opportunities. In sector
action, the Transport, Gaming, and Retail sectors were the leaders, while Oil
shares could find no friends.
The June SP
500 futures closed Tuesday’s session with a gain of +4.75 points, and settled
right at mid-range. Volume in the ES was estimated at 644,000 contracts, ligher
than Monday’s pace and below the daily average. Looking at the daily chart, the
ES posted a "NR7" day and continues to consolidate below its 10-day MA. On an
intraday basis, both the 60-min and 30-min charts have hit the 1st reversal area
on a bearish Gartley.
The U.S.
Dollar posted an inside market structure low off of its 10-day and 20-day MA
support. Semiconductor Index (SOX) reversed off of Monday’s doji but was capped
by its 10-day MA resistance. June bonds (ZB) posted an inside market structure
high, but held 10-day MA support.
Wednesday
is free of economic reports and with the NR7 day, I’ll be looking for some range
expansion. I liked the upside here for a bit going into options expiry,
especially with the VIX stretched, but we’re missing 1 key ingredient: volume.
As I said in last night’s update, the market hates uncertainty, and when we have
these opening gaps that don’t get filled, it just creates more uncertainty and
doubt.
What Motivation Do All of Us Have?
How
many would agree that the most effective motivation a trader can have — or an
individual in life can have, for that matter — is bettering himself/herself?
Think about it: if your motivation is money, then at a certain point your
desires will ebb, either because you have obtained all the money you could want
or need, or you have reached a point where your sense of fatigue is stronger
than your sense of desire. If your motivation is personal accomplishment, then
you will eventually run into the wall of "how much accomplishment is enough?" or
else burn yourself out by being held prisoner to the idea that there is never
enough.
The ability to better ourselves is the only goal that all individuals truly have
equal access to. The playing field is far from level. Some are born with
wealth. Some have the good fortune of having a powerful mentor in their life.
Some were simply in the right place at the right time. Others have incredible
amounts of raw talent. But everyone, down to the most mediocre individual, the
most down-and-out person, has the ability to better themselves. I think
bettering ourselves is ultimately a reflection of the teaching that the heart is
what’s most important, not appearances or physical accomplishments. Who can
claim superiority because of genes they inherited, or situations they stumbled
upon, or teachers they had the good fortune to sit under at an early age?
But in terms of the heart, who a person is or what kind of character that person
has, are things that are independent of uncontrolled circumstances. The classic
virtues: honesty, patience, wisdom, discipline, delayed self gratification, and
humbleness all lead to better trading, and ultimately to larger profits. There
is real freedom in getting off the outcome-based treadmill, and ironically, it
lets you enjoy your successes even more than those who are overly attached to
results. A millionaire who needs his money to be happy is a slave. A
millionaire who can be content with any amount of money is free, and can enjoy
his gifts more freely.
Another benefit of true commitment to bettering ourselves is that it is more
likely to be a true guide than other motivations. Many, if not most, who want to
be traders were never meant to be traders. A motivation of greed or fear or
boredom can mask that truth, as opposed to bettering ourselves and really
listening to that inner voice. What that voice tells us can be painful in the
short run, but turn into a blessing in long run.
Please feel free to email me with any questions
you might have, and have a great trading week!