We saw hesitancy. The theoretical Dow hit 9987, not crossing 10,000, while dropping to 9798. New buys were possible on our open November 490P, it hit highs of 10.30 for those already holding, and was available as low as 8.20 for a first buy.
Anything could now move the market, but oil earnings come out this week for the giants, and they will be bleak. We'll hold only a position to the put for the time being.
Many of our new traders read our OEX Manual, and study our Support/Resistance lines and write me often about "following the exact rules." I do not believe that anything in the world is absolute, that a rock is not hard (we only know what we know) and that even a trading system cannot be "absolute," but must have flexibility and intuition built in. The market breathes, and itself only follows rules "to a point."
What certain "types of personalities" do is key. At Level 3 and Advanced Mentoring we offer a Myers Brigg psychological test that I score, and it helps identify "traits" in your personality that you can watch for.
For some obvious examples:
*An "introverted" "engineer" "type" will want absolutes, and black and white.
*An "extroverted and "emotional" "type" will thrive more on risk, often too much risk, and break rules
*The "type of person" that "knows" what "should be" will have difficulty "fighting with themselves" over what is, not what should be.
*The personality type that "suffers" will potentially subconsciously sabotage their own successes, based on their own self fulfilling prophecy that they have "bad luck".
*Those types that "name" things (Obama is a socialist), or "freedom is being taken away" will struggle with false facts, the leading cause of failure in trading.
Many "believe" what they read or more sadly "listen to" on radio and TV and without any investigation or analysis of what the "definition" is will struggle with "black and white."
Smart traders know that a "rock is not hard," and know that facts are often not facts, but "half done" pieces of information.
As you trade, it is key you question facts, not get caught in "defining" what is occurring (as we as a public never have ALL the facts), and have a basic question about EVERYTHING.
For example, when town hall meetings became "screaming fits" was this the American people speaking out, or was it American people being misled with false information, thusly resulting in more bi-partisanship?
Did this truly represent the country, or did it disrupt our country?
How did this affect the stock market? (Suggestion: something must get better, and the market leads the economy, so we will buy stocks and not be "left out.")
Trader MR wrote me last weekend to share his successes in "fruit vendor trading" on the OEX:
>> I found some excellent material on the human mind that were infinitely enlightening when compared to the trading experience. I'll be summarizing sometime this week as a follow up to the "what trading means to me" (WTMTM)commentary.
>>
>> My laptop contracted a virus last week; I've been less prolific in my communication, and this doesn't count as my "official" WTMTM reply email :)
>>
>> A general comment though, it was a great week to trade wasn't it? 5/5 on OEX trades all returning 10% per trade. My trading portfolio is up about 4% in a week when the DOW was flat to declining, still holding an open GLD call (that I opened on my own advice).
>>
>> I started to actually follow the rules this month - with the exception of the first trade of October. I am 11/15 for the month and I saw that when I actually follow the rules: trade at S/R, make 2nd buys wisely, don't overbuy and break the rules due to fear of losing a large % of the portfolio --- it all works together.
>>
>> I am looking forward to sharing the data I found. I believe it can be truly helpful in daily trading.
>>
>> Fruit Vendor MR
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