Weekly Perspectives: Discussing A Trading Classic

Weekly Market Outlook For January 20 – 24, 2020 – The Payout and Payback Cycle
January 18, 2020
Weekly Market Outlook For January 27 – 31, 2020 – Prepare For Volatility
January 26, 2020
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Weekly Perspectives:  Discussing A Trading Classic

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Here is your weekly newsletter — perspectives on trading and financial markets.

Click here for last week’s edition.

 


 

Discussing a trading classic

Our first meeting of the year is now set for Wednesday, January 29 from 6-9PM and we will kick things off by discussing a classic trading book – Reminiscences of a Stock Operator by Jesse Livermore.

Click here for the full agenda and to secure a spot.

There’s a reason why this book is considered a classic and the lessons and parables found within are timeless.  Michael Lewis, the author of books like The Big Short, Moneyball, and Flash Boys, calls it “the best book that’s ever been written about stock market speculation”.

Local trader Ryan Nelson will moderate the discussion which will touch on some of the following themes:

  • reading the tape
  • ruin and recovery
  • the market as a teacher
  • timeless market psychology
  • winning vs avoiding losses
  • making and following rules
  • the nature of bull and bear markets
  • profiting in bear markets
  • fear and hope vs fear and greed

Participants are encouraged to read this excellent book in advance (easily found at all book stores and libraries) or review this summary:
https://medium.com/moataz-book-summary/book-summary-reminiscences-of-a-stock-operator-68bd55b7dadb

After the discussion, we will be heading to an off-site where there will be plenty of time to grab a bite to eat and drink and to learn and socialize with other traders.

RSVP now to secure a spot.

 

The Payout and Payback Cycle –

This past week the markets’ “momentum up” condition of the past several months accelerated with all the major timeframes now trading “momo up” marking a significant turning point where it seemed like stocks and investors could do no wrong.

It’s always useful to remember that markets and traders alike ebb and flow between “payout cycles and payback cycles”.

If you haven’t guessed it this is one of those payout cycles.

Unfortunately embedded in each payout cycle are the seeds of the next payback cycle.

As stocks climb, anyone and everyone seems to be making money with little risk.

This lures investors and traders to take more risk, and chase high flying stocks in the attempt to capture even more quick profits.

Unfortunately, markets that trade on momentum often leave behind poor market structure that leaves them vulnerable to sharp pullbacks.

These pullbacks when they occur will ultimately stop out all the weak and late longs who are late to the game and have poor trade location.

At the same time, it’s important to be diligent in times like these and avoid the temptation to try to call a major top because markets can always trade a lot further than you can remain solvent.


In this week’s video, I analyze the momentum found across all of the NA indices as well as the weak market structure that is supporting the current stock market rally.

Watch this week’s Weekly Outlook video to see the setups and levels we’ll be watching as well as the technical outlook for the VXX SPY QQQ IWM DIA EEM TSX TLT GLD BTCUSD ETHUSD EEM FANG and more for the week of Weekly Market Outlook For – January 20 – 27, 2020.

 

How Linda Raschke Approaches the Market Open –

If you trade index futures or trade intraday here’s an interesting article from Toptrader which features renowned trader Linda Raschke.  

It’s a quick read and may give you some ideas on using the NYSE $TICK index and cumulative NYSE volume to get a situational read on market context (range/consolidation) and the potential for a market to trend intraday.  

Weekly Perspectives: Discussing A Trading Classic

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