The Typical Trader Lives Or Dies On The Result Of His Last Trade(s)

"The typical trader lives or dies (emotionally) on the results of the most recent trade. If it was a winner, he`ll gladly go to the next trade; if it wasn`t he`ll start questioning the viability of his edge." - Mark Douglas, in Trading In The Zone

An easy way to fight these deep seated instincts is to have a 20-day rolling dollar performance on your trading. That way, day-to-day fluctuations won`t be felt so strongly.

Have a great day!

Richard Dennis: Trading To Me Is Like...

“Trading to me is like betting on independent rolls of the dice that you think are loaded a little bit in your favor, because you know some statistical things about the market.” - Richard Dennis, ex-Futures Trader

Summer Reading. A Great Book.

“If the market gets negative news and the market shrugs it off and it continues to go up, this is a bullish reaction because it means the market has already discounted the news. On the other hand, a sign of a fully priced market is one that reacts poorly to good news.” - Marty Schwartz

If you haven`t read Marty Schwartz book, "Pit Bull" I will highly recommend it. It should be one of your picks for this summer. You can even read it on the beach as there are no charts or complicated stuff. Pure trading and emotion.

Have a great day!

David Rosenberg: 99 Percent Chance Of A Recession

Do Traders Also Suffer From The Paradox Of Choice?

A fantastic video about the paradox of choice. Very true in the marketplace as well, "should I trade stocks or ETFs?", "should I commit to the long side or should I sell short and go long as well?", "what`s the best time frame, daytrading, swing trading or long term trend following?".....

And of course, "What if I had shorted instead of going long?" - I think traders found out about the choice paradox way before Mr Barry Schwartz. :)

Have a great weekend!

Inflation Is Always And Everywhere A Lagging Indicator

“Inflation is always and everywhere a lagging indicator, and the bond market is sophisticated enough to realize that." - David Rosenberg, Gluskin Sheff

An interesting game of words with the famous Milton Friedman`s quote,

"Inflation is always and everywhere a monetary phenomenon."

Pure Driving. Pure Racing.

I just can`t wait to watch this documentary. Ayrton Senna is probably the best race car driver of all time.

On other topics, pre-market is down again. It`s probably a good day for a turnaround if nothing really nasty comes out of Greece. It will be an interesting session, that`s for sure.

Have a great trading day!

Dennis Gartman: US Dollar Will Be Stable At 1.4000

“The dollar seems to be happy at about $1.40 versus the euro and I think it is going to stay stable for quite some period of time.

There are so many problems incumbent on Europe that should put downward pressure on the euro, but also so many problems going on with the dollar that will put pressure on it, that I think they will stay stable.” - Dennis Gartman

Interesting comments by Dennis Gartman. I am actually a little bit more bullish on the US Dollar and I expect it to cross below 1.4000 against the Euro soon.

The economic data continues to come out well below expectations and the market is down again, reversing yesterday`s gain. Shorting base metals, commodity stocks seems to be the correct play right now.

Of course a few stocks got so beaten down, that some selective picking is also an interesting play with larger stops.

Happy trading!

Great Joke & Markets Gapping Higher

I am a LeBron James fan but I just loved this joke,

I saw Lebron just recently and i asked him if he had change for a dollar.

He gave me 75 cents.

I asked him "That's it???"

Lebron replied " Sorry i don't have a 4th Quarter."

Markets are set to open higher on oversold conditions and better than expected data. The rally will probably hold today.

Have a great day!

Bill Gross: Who Will Buy US Treasuries?

"We've always wondered who will buy Treasuries after the Federal Reserve purchases the last of its $600 billion to end the second leg of its quantitative easing program later this month. It's certainly not Pimco and it's probably not the bond funds of the world.

Why wouldn't an investor buy Canada with a better balance sheet or Australia with a better balance sheet with interest rates at 1 or 2 or 3 percent higher? It simply doesn't make any sense." - Bill Gross, CNBC

Can Everyone Become A Good Trader?

"Can everyone become a good trader? I tend to think not." - Van K Tharp, in SuperTrader

Trading Skills: What Is Self-Discipline?

“Self-discipline is the ability to make yourself do what you should do when you should do it, whether you feel like it or not." -Elbert Hubbard

You Can`t Be Afraid Of Losing

“I'm not afraid to lose. When you start being afraid to lose, you're finished.” - Brian Gelber, trader, Market Wizard

Why Some Traders Fail

“Most traders who fail have large egos and can't admit that they are wrong. Even those who are willing to admit that they are wrong early in their career can't admit it later on. Also, some traders fail because they are too worried about losing.” - Brian Gelber, trader, Market Wizard

Don`t Get Emotional Involved With Positions

“Dramatic and emotional trading experiences tend to be negative. Pride is a great banana peel, as are hope, fear, and greed. My biggest slip-ups occurred shortly after I got emotionally involved with positions.” - Ed Seykota, Futures Trader

Bullish Sentiment Plunges, Stocks Rally

"Bullish sentiment, expectations that stock prices will rise over the next six months, fell 5.8 percentage points to 24.4% in the latest AAII Sentiment Survey. This is the lowest level of optimism recorded since August 26, 2010." - in The Prag Cap

I am long and enjoying the ride so far.

El-Erian: The US Economy Failed To Gain Proper Traction

"Despite massive fiscal and monetary stimulus, the US economy (and, critically, the labor market) has frustratingly failed to gain proper traction." - Mohamed A. El-Erian, CEO and Co-CIO, Pimco

Patterson Companies (PDCO): Down 13 Sessions In A Row

It`s not that often that you see a stock trading down for 13 consecutive sessions:

Patterson Companies (PDCO) has been trending down and is now fast approaching major support.

Have a great day!

Pre-Market Is Lower But Markets Are Oversold.

Pre-market is red again. eMini S&P Futures are down 3 points in globex trading. Markets are now oversold so I would not be surprised to see a reflex rally very soon.

There`s no big economic data coming out today but the Beige Book later today may create some volatility.

Crude Oil has reversed from earlier losses and is trading up 0.72 dollars per barrel at 99.80.

Have a great day!

Barclays Capital: Short Term Oil Outlook

"We're not super-bullish over the short term, but we are skewed to the upside. We do need a lot more crude, especially in the second half of the year, over and above what OPEC is currently producing." - Yingxi Yu, Barclays Capital analyst in the WSJ

Tickers: United States Oil Fund (USO)

Buying An Option It`s Like Holding An Ice Cube

“When you buy an option, the premium steadily evaporates over time. It's like holding an ice cube in your hand: the longer it's there, the more it diminishes until finally it doesn't exist at all.” - Mark Cook, Professional Trader

Nonspeculative Activity & The Significance Of Technical Breakouts

“The more a price pattern is observed by speculators, the more prone you are to have false signals. The more a market is the product of nonspeculative activity, the greater the significance of technical breakouts.” - Bruce Kovner, hedge fund manager

Dell (DELL): Nice Outperformance On Yesterday`s Session. Can It Follow Through?

Dell (DELL) rallied 2 percent on a down market, bouncing from the vicinity of the 50 day SMA. It`s one of the stocks on my radar screen for a swing long play.

It`s art week here at the OTB. Today I will share with you a fantastic Paula Rego`s oil on canvas. What a masterpiece,

It's Not Whether You're Right Or Wrong That's Important

“It's not whether you're right or wrong that's important, but how much money you make when you're right, and how much you lose when you're wrong.” - George Soros

4 Stocks That Managed To Rally On This Downturn: Dean Foods (DF), Electronic Arts (ERTS), NetFlix (NFLX) & Chipotle Mexican Grill (CMG)

It`s really no surprise to find Chipotle Mexican Grill (CMG) and NetFlix (NFLX) in this list. These stocks have been outperforming the market for a long time.

Let`s go through the charts of these outperforming stocks:

Chipotle Mexican Grill (CMG),

NetFlix (NFLX),

Electronic Arts (ERTS),

and Dean Foods (DF),

Have a great trading day!

Petronas CEO: Oil Prices Should Be In The 75 To 80 Dollar Range

"Given the current state of market fundamentals and cost environment, I believe prices should remain within the range of $75 to $80 a barrel," - Shamsul Azhar Abbas, Petronas CEO at an industry gathering

Tickers: United States Oil Fund (USO), Exxon Mobil (XOM); Petroleo Brasileiro (PBR), Murphy Oil (MUR), BP Plc (BP), Chevron Corp. (CVX), Conoco Phillips (COP), Marathon Oil (MRO), Repsol YPF SA (MCE:REP), TOTAL S.A. (ADR) (NYSE:TOT), TOTAL S.A. (EPA:FP)

Bank Of America (BAC): Fast Approaching The November-December Lows

Bank Of America (BAC) has been trending lower for many months now and is fast approaching the November-December lows...

Inflation Pressures Have Clearly Begun To Recede

“With the USFIG hitting a seven-month low, underlying inflation pressures have clearly begun to recede.” - Lakshman Achuthan, Chief Economist of ECRI

What A Match!

"In Friday's semi-finals, both showed that while form is temporary, greatness is permanent." - in Roland Garros Website

I can`t wait to watch this one. While I would like to see a Federer win, I am pretty sure Rafa Nadal will win easily...

Have a great day and enjoy the match!

A Fantastic Commercial. To Relax Before The Trading Sesssion Begins.

To chill out a bit before another stressing trading session:

Have a great day!

Outlook For Oil And Gasoline Prices

"Gasoline prices have rolled over about 10 percent from their recent highs while crude oil is a little over 10 percent from its recent highs. If the traditional seasonal pattern holds we should expect oil and gas to remain relatively buoyant into the July 4th holiday. In addition to the end of this powerful seasonal trend is the end of QE2 and a relative calm in what we saw earlier this year in the Middle East. All of this should come together to put pressure on oil and gas prices into the back half of the year.

If the economy weakens further from here we could see substantially lower prices. Ultimately, this all leads to one conclusion – the risk of disinflation is back on the table." - in The PragCap

Related: Sunoco (SUN), Tesoro (TSO), Western Refining (WNR), United States Oil Fund (USO), Exxon Mobil (XOM), Murphy Oil (MUR), Conoco Phillips (COP), Marathon Oil (MRO), Petroleo Brasileiro (PBR)

Going Flat Into The Employment Report

Great quote,

“Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.” - Groucho Marx

Markets are a bit erratic, the news flow has been all over the place today. I am going flat into the Employment Report.

Have a great day!

Trading Lesson.

“While I'm a staunch advocate of higher education, there is no training — classroom or otherwise — that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market. There's typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign.” - Paul Tudor Jones, hedge fund manager

ECRI`s Achuthan: Don`t Buy Dips In The Stock Market

“Until there are signs of another pickup in economic growth, I wouldn’t be buying on dips in the stock market. In this context, he said, Treasuries may seem a safer bet.” - Lakshman Achuthan, in NY Times

Very interesting comments. I totally agree with his view and I add that probably the way to go is to sell rallies (like the one we are seeing now) and cover shorts on breaks.

Tickers: ProShares UltraShort S&P500 (ETF) (SDS), SPDR S&P 500 ETF (SPY), iShares Russell 2000 Index (ETF) (IWM), ProShares UltraShort QQQ (ETF) (QID), SPDR Dow Jones Industrial Average ETF (DIA), iPath S&P 500 VIX Short-Term Futures ETN (NYSE:VXX), Bank Of America (BAC), NetFlix (NFLX), Nvidia (NVDA), Broadcom (BRCM), Apple (AAPL), Ford (F), John Deere (DE), Micron Tech (MU)