Things To Do In August

  • August 15, 2001
  • Dave Landry

 

On Wednesday, the Nasdaq opened flat after a
brief blip up, began to sell off. The market stabilized by mid-day but
the selling resumed late in the day.  This action has it closing
poorly.

About the only good news I could find is that
last week’s lows held–barely.

 

The S&P also sold
off to close poorly.

 

So what do we do? Watch the recent lows in the
indices, if they get taken out, then the probable direction remains
down. Of course, this is obvious and the market seldom does the
obvious–at least not right away. We could get a stab below followed
by a bounce–just enough to trick everyone. Based on my chart scans,
there’s nothing set up on the long side and only a few worthy setups
on the short side. Therefore, I think the best thing to do is to keep
it light until the picture becomes clearer (maybe in a few weeks when
everyone gets back from vacation?).

Looking to potential
setups, Qwest Communications (Q)
looks poised to resume its strong downtrend out of a pullback from
lows.

Lands End (LE)
looks poised to resume its breakdown out of a Bow Tie/inverted cup and
handle–like formation.

Other

Based on last night’s
comments, I received the follow email this morning. Of course, as soon
as you talk about how dull the markets are, they begin to wake up.
However, I believe these comments are still timely and at the least,
will be useful in future dull markets.

“…One of the most
frequent fatal errors for newbie traders is overtrading. Its close
cousin is “trying to force something to happen.“
We’ve all done it. Survivors rarely do it. August historically has
been a down month, frequently choppy. Money managers and professional
traders often take vacations in August. 

Are there any “real” trading opportunities in August? If you
are not seeing legitimate opportunities and you have too much
“energy” to take time off, what do you do? 

Seven suggestions for August:

1. Stay away – from your trading station! Conserve cash for the
next significant move.

2. Read – those
books you’ve been putting off. Personal interests or trading–related.
Fresh ideas often rejuvenate.

3. Think – Many
successful people practice the art of contemplation and reflection.
This is an active, deliberate process. Think about strategic issues,
life’s direction, trading patterns, macro (i.e. “forest” not
“trees”) issues. Usually a pen and paper exercise, away from
distractions.

4. Review you Trading
Journal – Great time for a thorough annual check-up. What are you
doing right? What needs to be corrected?

5. Reconnect with people
– Trading is inherently analytical and time-consuming. Use this slow
time to reconnect with people that are important in your life. 

6. Reestablish a Pattern
of Good Health – Traders often are sedentary. Sleep is compromised
by late-night analysis. Independence sometimes leads to a sloppy diet.
Proper discipline regarding sleep, exercise, and diet is supportive of
top performance.

7. Have some fun –
Do something different! Get a little crazy. Make some memories. (Take
that vacation after all.) Steve M. Atlanta, Georgia
“

Thanks for  the input Steve!

Best of luck with your trading on
Thursday!

Dave Landry

sentivetradingco@prodigy.net

P.S. Reminder: Protective stops on
every trade!

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book is unlike any other trading manual I have read……I feel like
it has given me a  framework for swing trading that will work
year in and year out….”

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Tulsa, Oklahoma

 

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