This Overhaul Helped Me — Try It

December 4, 2003
Chris Curran

The
December SP futures opened Wednesday’s session with a +2.50 point gap
to the upside, after the fastest worker productivity gains in 20 years were
reported. The opening gap held its ground ahead of the 10 am ISM report, which
came in below expectations. The ensuing sell-off found support at the Daily
Pivot and Tuesday’s close at 1,067. From there it looked the day was going to
be a short player’s worst nightmare, with slow sideways consolidation followed
by sharp moves to the upside. However, the contract took 2 steps forward,
posting another new 18-month high right at R2 at 1,074, followed by 4 steps back
after sellers became bold again on the inability to capitalize on the new
ground.

The December SP 500 futures
closed Wednesday’s session with a loss of -2.00 points, and finished in the
lower 1/2 of its daily range. Volume was estimated at a respectable 676,000
contracts, which is above the daily average. On a daily basis, the ES posted a
bearish engulfing line/gravestone, with gap support in the 1,060 area then the
10-day MA at 1,054.50 . On an intraday basis, the ES posted another new contract
high before the buyers jumped ship to break 60-min, 30-min, and 13-min
trendlines, and close with inverted cups. Price closed a bit extended to the
sell side with room to retrace to MA resistance in the 1,069 area, which is also
the 50% Fib retracement of Tuesday’s range (see chart).

Thursday gives us the Weekly
Jobless Claims number and a consensus for an increase from last week to
150,000. I would expect an afternoon drift ahead of Intel’s (INTC) and IBM’s
mid-quarter conference calls, and Friday’s Unemployment data.

“Overhauling”
Your Mental Process

A while ago, when I’d been doing
this for maybe 2 years, I remember feeling like a complete know-nothing jackass.
I had made money and lost it. Made some again, and lost it. I’d made a decent
return in a few months, and gave it all back. I’d probably read 50 books on the
mechanics of the market, but I didn’t really “get it.” I was feeling like
another fool who could talk the talk, but couldn’t walk the walk.

But the personal pity party got
real old real fast. I said to myself “If I suck, then I suck, but since I’ve
gotten pretty much nowhere, I might as well start over.” So, I declared myself
a dummy, and went back to square one from a mental perspective. I went back over
ALL the old ground. And you know what? At that point, after trying to trade for
2 years, is when I really started to learn.

Giving your mental process an “overhaul”
is not throwing away what you’ve worked so hard to learn. It’s just the
opposite. It’s taking a fresh start with the goal of maximizing what you’ve
learned and getting the pieces to fall into place. It’s more like taking a
blowtorch to everything you’ve amassed so far and burning away the garbage, so
that only the important things that apply to you are left. Don’t see a mental “overhaul”
as an admission of failure, or if you do see it that way, don’t be afraid to
admit you failed! I call it “creative destruction.” Thinking is hard,
admitting your own inadequacy is hard, and embracing the pain is just a bitch!
But that’s the whole point of it. Doing this will ALWAYS be tough. Mediocrity
is like a black hole. You have to fight with all your might not to be sucked
into it. If everyone in the human race was strong, smart, and disciplined, then
everyone would be trading!