How to trade the October jobs report

Stock
index futures opened Thursday’s session higher on the heels of stronger retailer
and productivity data. 
The gains were briefly pared after outgoing
Fed Chair gave an upbeat, but guarded dribble-drabble about the economy.  The
upbeat mood was revived, however, when Dow component Merck received a favorable
legal ruling in one of its Vioxx cases.

The December SP 500 futures
closed out Thursday’s session with a gain +5.75 points, while the YM finished
with the same relative gain of +52 points.  Looking at the daily charts, the ES
managed to clear its 100-day MA, but posted a djoi for the day, while the YM
managed to clear its 200-day MA.  For you daily 3-Line Break followers, nothing
has changed as the ES remains long with a new Break Price of 1200.50, while the
YM remains long with a new Break Price of 10370.

 

                   

 

Friday morning at
8:30 ET gives us the October jobs report, which is expected to show 125,000 new
jobs created, with the Unemployment Rate holding steady at 5.1%.  With as far as
we’ve come the past few days, the markets could be pricing in a friendly
report.  So, be alert for a “gap and trap” scenario as the good news gets sold.

                   

What Motivation Do All of Us
Have?

How
many would agree or disagree 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 else 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!

Chris Curran


chris@tradewindsonline.net