|Don’t Sweat the Good Stuff
|April 17, 2007
I’ve got a simple question for you. Trust me, you’ve been asked this one before.
Look at this picture and tell me what you see:
- a glass half-full
- a glass half-empty
- What glass? I see ______.
If you selected choice “A”, congratulations, you might be a perfectly balanced, mostly optimistic trader.
If you selected choice “B”, we need to talk. Or rather I’m going to talk and I want you to listen really, really closely.
And if you selected choice “C” and truly didn’t see a glass of water at all, well, I’m either concerned or impressed, depending on what you think you see!
Trade Talk Weekly has been going for five months strong—CHEERS! In honor of this accomplishment, I thought it was high time to find out how stocks that I’ve named in the Trade Talk have done. Drum roll, please…
- Golden Star Resources Ltd. (GSS) is up an incredible 37% in less than two months
- Microvision Inc (MVIS) is up 18% in just two weeks
- EOG Resources Inc (EOG) is up 11% in four months
- Suncor Energy (SU) is up 11% in just three weeks
And those are just a few of the winners I selected for you Trade Talkers recently! Trending123 subscribers know there’s a whole lot more where they came from. Find out about the complete Trending123 portfolio and its winners—PLUS get in on the most recent recommended plays right here.
No, this wasn’t some weird Trending123 version of the Rorschach test. I simply wanted to gauge the temperature of your emotions right now. Because from the emails I have been receiving and from the overarching tone that I have found in the trading room and on the message boards lately, some of you are going a little over-the-edge!
Yes, we are in a highly volatile place right now in the market. Chart after chart is showing the RST/Nut Hut pattern. Heck, I don’t call it the “Nut Hut” for no reason! This pattern comes with some serious psychological highs and lows. It is bound to drive most people batty now and again. So, yes, if you are one of them, you can relax (somewhat) as you realize that these feelings are completely normal.
However, for those of you that are still tensing up, this message is for you (dun, dun, dun)! Please do not allow yourself to get so caught up in this tangled web of emotions to the point where you cannot enjoy what is happening. We are experiencing a plethora of amazing highs from sectors and indices far and wide right now.
It’s truly mind-blowing! Last week I brought up charts for the Paris CAC ($CAC) to the German DAX ($DAX) to the Dow Jones World Index ($DJW) to the New York Stock Exchange ($NYA). These and many others were experiencing 52-weeks and all-time highs. Man, oh, man. It’s such an exciting time right now.
AND…AND…if that’s not proof enough, then how about real stocks that are doing real(ly) well? Here at Trending123, we are in so many stocks that are doing exceptionally well.
And as new subscribers continue to pour in, the question is always the same, “Can I still profit from these opportunities?” The answer is still a resounding, “Absolutely.”
Alanco Technologies, Inc. (ALAN)
Alanco Technologies, Inc., through its subsidiaries, engages in the design, production, marketing, and distribution of radio frequency identification (RFID) tracking technology and data storage products primarily in the United States. It develops TSI PRISM, a wireless RFID tracking technology that is used primarily in correctional facilities, security management, and personnel monitoring.
Current Outlook: Right now, this stock is in an Ascending Triangle pattern and it simply looks prepped to break out at a moment’s notice. There was massive volume falling the recent holiday weekend which contributed to its current activity. The weekly chart is showing massive bullish divergence with all the indicators pointing up and the PPO, possibly even making new parabolic highs. So this is a stock that I think will really start cranking!
FalconStor Software (FALC)
FalconStor Software, Inc. engages in the development, manufacture, and sale of network storage software solutions, as well as provision of related maintenance, implementation, and engineering services worldwide. Its software products include Network Storage Server that provides storage networking and business continuity/disaster recovery functionality to enterprises, small and medium-size business, and small office/home office markets; Virtualtape Library, a backup/recovery solution that uses disk to emulate a range of physical tape libraries; and Continuous Data Protection solutions that maintain the availability and usability of data in the event of an unplanned hardware failure, deletion, or software error, or planned downtime.
Current Outlook: Right now, FALC is flying its bull flag proud! It is showing massive bullish divergence thanks to the volume. And if you get in on a day with a marked pullback, you can practically count on a double from it in the future.
Dr. Janice Dorn, a Neuropsychological Trading Coach, works with me at Trending123, focusing on trading, mentoring and commentary in the financial markets, with emphasis on Behavioral NeuroFinance, Mass Psychology and Trading Neuropsychology. You can find her in our Trading Room and on our message boards, and each week she writes a Trading Wisdom column for my subscribers.
Self-Sabotage: The Great Deceiver
Everyone wants to be a winner, to make the big bucks, to see tons of good trades. No one really wants to believe that he or she is sabotaging success. Yet, 90% of traders wipe out completely in the first year, and the majority are simply unable to deal with the truth. Their denial is self-sabotage.
The highest rung on the ladder of self-sabotage is what is called “overtrading.” But that’s just another way of saying that the trader is compulsive, obsessive and addicted. Trading addiction occurs in many people and at all levels of trading skills. Addiction is a brain disease. It is a behavioral situation that is subserved by electrochemical changes in the brain. Talking for years, psychopharmacology, rehabilitation in some facility, or five hours a day of intense sauna or steam might help, but in the end, the only way to deal with addiction is for the addict to stop the behavior.
History is littered with examples, but among my favorites is the tale of Nick Leeson. In the early ‘90s, Leeson gained full charge of the Singapore office of Barings Bank, one of the most venerable financial institutions in the world and bank of the Queen of England. (Barings financed the Louisiana Purchase, the Erie Canal and the Napoleonic Wars.) There was just one small problem: Leeson was an inveterate liar. Almost from the first day he went to Singapore to run the Barings Operation, he was losing money on trades and hiding it in an error account numbered “88888.” His justification was, “I never encountered anything I could not conquer.” But the losses just kept growing.
The morning of February 26, 1995, the 233-year-old bank was hours away from total collapse due to losses of $1 billion incurred by Nick, age 28. It was sold for one British pound to the Dutch Bank ING.
What’s the lesson we can learn from Nick? As I said above, the addict must make a total commitment to abstinence.
But I’m certainly not suggesting you abstain from trading altogether. Trending123 is here to help keep your emotions in check. John Lansing is in the trenches with you day in and day out in the live trading room, where he talks about his views, stock/sector picks and general interpretation of market activity. That said, for my part, the really fascinating stuff has to do with what people in the room write about and how they express their thoughts and emotions during the trading day. But for those of you who do not have time or inclination to join the trading room, regular visits to the message board might be something to consider.
There are so many reasons to be optimistic and yet, somehow, many of you are allowing the Bears of the market to seep into your psyche. Just look at how the S&P 500 is doing right now. It is zooming to new highs all the time and yet, have you heard the mumblings and grumblings from those that are convinced we are going to just tank?
“The sky is falling! The sky is falling!”
No it’s really not. Nothing could be further from the truth.
Between Silly and Desperate
It is okay to be a cautious trader. It is not okay to convince yourself that you deserve to lose.
Don’t know what I mean? Well, there are a lot of people that subscribe to the “I deserve to lose” thought process. When we are at the top trend line, we are higher than a kite. But when we are at the bottom trend line, we are feeling like the scum of the earth — and like we deserve to lose.
Talk about self-destructive!
No one deserves to lose. We only feel that way because the volatility that we are experiencing is incredibly strong. And then we let our emotions get the best of us and all of a sudden we are headed down the slippery slope toward feeling we are getting what was coming to us.
But it’s all smoke and mirrors.
And that’s why you have me—your market-o-meter! I can help you see through all the stuff that clouds your vision when it comes to these hectic times in the market. Specifically, my duty is to help you make money in spite of your best efforts to fight me on it.
Let me help get you through it—get my Trending123 at a special deal today only!
P.S. Do the words “Technical analysis” frighten you? Don’t let them! No one knows everything about technical analysis—but the trick is that you don’t have to. I am here for the sole purpose of helping you wade through the ups, downs, ins and outs of charting stocks. This is exactly why why I created Trending123. We are a community of traders helping other traders. Join our community today and discover the benefit of helping others profit while you profit! Click here now.