Take This SImple Inventory…
Stock
index futures opened Tuesday’s session once again with small upside
gaps and found a bid ahead of the July Consumer Confidence number. After the
report came in at a 2-year high, the futures saw some selling on the news and
the trend day attempt reverted into a choppy range. A test of the lows couldn’t
find any follow-through and triggered a short-covering grind that was good for a
cup and handle break to new session highs. The futures settled back into a
tight grind through the lunchtime lull, but another round of short-covering hit
some upside air pockets that snowballed with the light volume.
The
September SP 500 futures closed Tuesday’s session with a gain of +9.50 points,
while the Dow futures tacked on 113 points. Looking at the daily chart, the ES
posted a market structure low off of the bullish divergence, and stalled just
under its 10-day MA at 1097.50. The YM also posted a market structure low off
of its bullish divergence, and settled right at its 10-day MA resistance. In
the small caps, the Russell E-mini (ER2) joined the oversold bounce crowd, but
is still well below its 10-day MA at 549.60.
               
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September
bonds (ZB) broke the head-and-shoulders neckline, along with major MA support,
to confirm last week’s top. The Semiconductor Index (SOX) posted a hammer and
market structure low, and I’ll be watching for confirmation on the AB=CD
pattern.
One day
doesn’t make a bottom (especially with this volume), so until further proven
otherwise, we’re sitting with oversold bounces that were overdue. Wednesday
morning at 8:30 ET gives us the June Durable Orders number, which is supposed to
have upticked from May’s decline to show growth of 1.5%. At 2:00 ET, we receive
the monthly dose of old news in the form of the Fed’s Beige Book.
Harboring Strengths and Understanding Weaknesses
What is it about you that
makes you a trader? Why did you choose this business? (And I emphasize the
word “business”)Â What strengths about you provide you with the right
temperament to trade successfully? Do you like risk taking, or are you able to
make quick, unemotional decisions? Here is a list that I made personally:
– Trading is fun, and NOT a
frustrating experience.
– Money is NOT the subject of
my focus, price movement is.
– Losing is part of the
process of making money and no one loss makes me a loser.
– Trading is a game that I
know I can win.
– I don’t have to be in the
market all the time, and I can wait for opportunity to come.
– I don’t trade for
recognition. I don’t have to prove anything, and others opinion of me is not of
interest to me.
These are my strengths that
allow me to focus on the trade, which is the only thing that matters once I take
it. While it’s important to harness our strengths and use them to our
advantage, it’s even more important to understand our weaknesses and make
adjustments accordingly. What are my weaknesses? I have plenty, but 2 major
ones: When I have a great day, it’s very hard not to feel less vulnerable. I
control it to some degree, not normally taking atypical risks .But there are
times when my ego creeps in to inflate my expectations. My other weakness,
which I’m continuing to work on, is getting out of the scalping mentality. My
personal goal is to take more out of each trade when the risk evaluation is
safe, and the trade continues to “behave” so to speak.Â
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Please feel free to email me with any questions
you might have, and have a great trading week!