Morning Market Thoughts

Good morning. The futures are pointing to a lower open today. Stocks I am following today are:

$WUBA — Testing $70 after reporting earnings.
$GE — cut its dividend by 50%. The stock is up this morning. After years of mismanagement by Jeff Immelt, the stock just might be putting in a bottom at $20.
$JD — reported strong earnings and is now back above the 50-day moving average.
$TSLA — The latest distraction by Elon Must is a recent tweet: “Tesla Semi Truck unveil to be webcast live on Thursday at 8pm! This will blow your mind clear out of your skull and into an alternate dimension. Just need to find my portal gun …” Jeff Bezos didn’t even say anything about the release of the new Kindle Oasis. Tim Cook promoted the recent Apple products pretty heavily, but his promotions were rational. They also resulted in $AAPL hitting new all-time highs. It will be interesting to see whether Mr. Musk’s latest “Look! Over there! A squirrel” effort will be enough to achieve a lift off from $300. If it doesn’t, I can see the stock ultimately falling to $240 before reaching $200. These targets are based purely on technical levels rather than fundamentals (though with current bond yields reaching junk status, the fundamentals aren’t exactly stellar).
$ROKU — Another new high. Blue sky stock
$QCOM — rejecting Broadcom’s takeover offer. The stock is higher today.

One aspect of trading I want to briefly mention. I attend Saddleback church in Lake Forest (founded by Risk Warren, author of best selling “A Purpose Driven Life”. One of his recent messages was the concept of “breakthroughs”. As you might expect, his message was from the perspective of spirituality. He noted that true breakthroughs don’t come until you are ready for them. It’s not enough to simply pray for a breakthrough (i.e., health, emotional, financial, relationships, etc). You need to truly be ready to receive it.

This message is intensely applicable to trading. There is an old saying, “When the student is ready, the teacher will appear.” Are you ready for a breakthrough in your trading? Is your account swinging wildly as big losses wipe out months of gains? Is your account NOT swinging wildly but is instead falling or remaining flat even as the market moves higher? Are you overtrading, where the vast majority of your trades are impulsive and unprofitable?

If you answered “yes” to any of these questions, you’ve got to ask yourself: “What am I doing wrong?” It has to be SOMETHING. Something is broken in your trading behavior. But so far, you haven’t taken any real action to fix it. If it were otherwise, you wouldn’t still be stuck in the same rut you’ve been in. Simply put, you need a breakthrough. But in order to achieve a breakthrough in your trading, you’ve got to do more than just want it. We all want to trade better. You’ve got to put yourself in a position to make a breakthrough.

And how do you put yourself in a position to make a breakthrough in your trading? You review ALL of your trades — past, present, and future. This is the only method that results in discovering what you are doing wrong. But it’s something that only a very, very small percentage of traders are willing to do. Why? First, because it takes a lot of time to review all trades. Next, because most traders really don’t want to know how badly they are trading. Their current, unprofitable trading style works for them emotionally. If it were otherwise, changes would already have been made. Finally, making changes in trading behavior takes a lot of time and energy. Few want to put in that time. But in order to achieve a breakthrough in your trading, you’ve got to put in the time. You’ve got to face the deficiencies in your trading.

If you are ready to make a breakthrough, then start reviewing past trades and all future trades right now. Don’t wait until January, where your New Year’s Resolution is the catalyst for review. Do the work now, and then make a resolution in January to make the changes you have already identified. Feel free to start that process sooner, but I’m trying to make this as easy as possible. If you aren’t willing or able to do the work required to reach breakthrough status, then don’t expect to break through any obstacles in your trading.

Think about it.

I’ll be hosting a training session tomorrow evening at 8 pm ET. Hope to see you there.


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