hello and welcome to Jim Dalton’s presentation on how to prepare for the open and the first our trade it’s September 3 2014 currently 915 916 a.m eastern we’ll go for the first hour trade about 1030am we’ll get to as many questions as we can but please some if you don’t get the answer you need please come back to us an email or phone and thank you everyone for being here we have a full house and it’s great to see you also thanks for taking time out from your busy day to be a part of this you should have seen a note that there is a report or two reports for this morning’s presentation to supplement Jim’s discussion so if you haven’t seen those reports please go to our blog there’s an SP morning report that was published about ten minutes until nine a.m eastern and there was a recap and preparation report that was distributed to intensive traders last evening so please some have those up so that will help you with this material and with that I will introduce mr. Jim Daulton well hello good morning I must admit I am I’m only back reluctantly I have been fishing for steelhead in the Pacific Northwest on the Washington Peninsula and the only time I went to a couple of days without even looking at a watch because I really didn’t care but anyhow we are back and ready to go to go to work first slide how to prepare for the open in first hour of trade this is just a huge issue so many people don’t really know or if they do prepare correctly once price opens or once the market opens they tend to forget what they prepared for when I prepare and you’ll see it in the reports that you got i start i look at the monthly I month with a monthly bar and it really it’s not too necessary right now because we know all the markets are all the ESPYs are at the highs but I look at the monthly SP and when I look at that it’s the me a perspective are we trending or are we balancing if we are balancing what’s our trade location within the balancing range if I’m trending I try and make some idea in my early or late in that trend lateness in the trend starts to show that the different balance areas are starting to overlap and the last month’s range would have taken out this month low would have taken out last month low there’s things like that indications okay once i leave the the monthly i didn’t go to the weekly and if you look at the current weekly report you got the weekly is the first report that really caught my attention it is more revealing the last week slow if you will see wasn’t too far from yesterday’s low i think there’s only four or five handles so any meaningful correction that gets under the way this week would take out last week slow so i’m going to take last week slow and i’m going to put that on my daily charts i want to make sure i know where that level is and what you’ll see sometimes if the market starts to break you’ll be very helpful because you will find it is moving towards some of these references so once that that’s the i looked at the monthly i look at the weekly and as i say this week when i looked at the weekly i said okay i see last week’s low as are fairly important reference struggle i believe that was right around the 1988 level then I look at the daily and I see if the daily gives me any additional information the daily this week provided me about the same information as as the weekly then I go to the profiles and when I look at the profiles that’s really where i start to hone in on it very close it’s like putting the markets under a under a magnifying glass once i have once i have the the profiles in mind and I start to see things like important prominent points of control or very prominent points of control that have not been revisited a point of control is the longest line reading from the left to right on the profile the wider that line is that hasn’t been revisited the more likely we are to go back down and review that area sometime in the future

maybe it’s today or or tomorrow so I get a perspective I’m ready I get a perspective overall where the market is trading my trending and my balancing etc then and I’m looking to see what went on yesterday for example yesterday’s profile shows you that we did not have a good high yesterday in other words there was no single print selling tail on the top of the on the top of yesterday’s profile that very often is an indication that we will come back to and through that area so once once I’ve done that the next thing I do can I look and see yes may um can you put up the report or go to our blog it’s on the blog so people can be following along with what you’re saying okay can you put it up on yours was that faster sure i guess i’ll use the recap report first okay can you see it yes I can so you’ll see there’s the there’s the monthly and the first thing I look at the monthly I noticed that the all-time high was made in the electronic market and we know from past experience that is a very rare occurrence when the all-time high occurs a lasting all-time high or low occurs in the over the in the electronic market yesterday it left that high in the electronic market came back this morning and on the overnight last night and took it out okay so let’s go to the weekly and you’ll see on the on the weekly I actually have a combined report combined reference down there I have last week slow and then I have a prior trading range high at the 1985 50 level so I look at that a prior trading range high and last week’s lo that combined reference it goes for a couple of handles in there but if there’s anything major going to happen and change we will get it down below and start to trade below that level right now that isn’t relevant because the market is trading quite a bit higher but if the market should start to break that’s where my focus will immediately go and say okay anything major I’m going to start to challenge that combined reference down there okay and then I go I’ve left that and then i go i look at the daily and the daily gives me you see those same two references in 1986 18 9650 level as well as the nineteen oh eight ten level you see that they’re basically the same it so you don’t see anything different it’s just another way to to to look at it okay now once i have that perspective i go to the profiles and the profile changed my references just a little bit um I had a two-day hi and I look on it’s okay the two I’m sorry a two-day balance and I look at that two day balance and I look at the at the low and the lower pretty close to each other but I said okay there’s anything meaningful on the downside I’m going to start to trade down below that two day balance then I look in the only two day high and I see that yesterday’s high makes up that two day high and while it was a new pic session high it was not a new high on the electronic market and you’ll see that the all-time electronic market is still marked up there to 2006 point 25 so that you can say something Julia yeah we well we have five minutes so don’t want to take too much time but a gentleman is asking if don’t we have a six-day balance but clearly that excess slow down there you’ve balint drawing balance areas is more an art it’s not what I see on a short-term basis I see it I saw a two-day hi that doesn’t mean that I’m correct but that’s what I that’s what I saw okay based on my experience or what I thought was going to be more important because if you take the the six-day hi you’ve got to get way down and in this

level we see the excess low roughly 90 aunt quarter yeah for that to happen you’ve got to take out the two-day low first for this to get challenged so and if you if you come back in the two-day hi you’re going to also be back in what you call the six-day high so it’s it’s it’s this is this is a Marvis more of an art than a science but I saw this as my short-term reference this morning okay so when I come in we have four minutes Tim my focus is on the the two day high and and low next I go and I look and I say okay and let me bring up my screen if I can have the control back you got it and also here you go Jim also though Jim uses real-time trading hours pit session hours two on the bar chart so he can see gaps and the pit sessions only so that thank you for asking okay no it’s off of this slideshow okay okay great now I go and I look the next thing I do I said only let’s look at the overnight market first thing I focus on is yesterday settle at 1999 75 and I look at that and I see that almost all of the trade all but a couple of ticks of trade took place above last night settle that means that my inventory is my overnight inventory is what we call a hundred percent long when it’s a hundred percent long that’s important all I look at is is the overnight inventory long short and if it’s took place above the settle then it’s long long short or balance and I look at the overnight high and low I do not look at the at the shape of the overnight profile and the reason for that is is usually not enough volume to make it up give it the validity you don’t have a large enough sample size of trading to make it relevant so once i want i have the overnight inventory up then i can see where we’re going to open in were two minutes before the openings i said okay i’m going to open out of balance relative to yesterday and if i open within the center of yesterday’s range then I sit back and relax a little bit because I say it’s probably going to be a slow start I’ll give the market a chance to kind of shake out when I open out of balance those are usually the biggest opportunities so I may have to trade early and it opens out of balance you know a big day up more you know the market fails and you get a pretty good trade to thee to the downside so right now we will gap as of right now with a minute to go we gaap higher gap trading rules are in play can you mock the higher the pitch him that’s how you measure a gap not from the settle so there’s no confusion okay the gamblers from 20 for 25 to the overnight hi oh no don’t don’t close that the red X Jim the red X no no no no no that that one right there ok ok so now i know i’m going to open out of balance in just a couple of seconds I open out of balance the ideal long is a an attempt to fill the gap that fails just above the 20 4 25 level that’s the idea long ok so now now we’re open we’re open out of balance to the up to the upside can you make it just a little bigger gym so we can see not too big so I want to see all the overnight guests oh I’m out I’m out of balance to the upside so I’m watching the seat if I’m going to be able to fill that gap now we do have some reports coming out this morning ok the let me see I’ve I conversation ok the biggest the biggest report this morning ort it is going to be the bays report the base book if it comes out after the after the market two o’clock in the staff in this afternoon let me look and see we have I can tell you Jim its factory orders at

10am we did have a DP at eight-fifteen no adp I think comes out tomorrow I was the one no that’s it’s today it’s um it’s today i came out at eight fifteen am so we have read books about it 855 okay i didn’t get any numbers for adp hi it’s always comes out on a wednesday before the monthly employment number Oh released on 94 I think that well I think it’s tomorrow alright but we have factory orders of 10 it’s the next report okay you know here’s something that did I say all the time and it’s very rare that somebody abides by this do not look at the report all you want to know is the time the report is coming out had you looked at the reports yesterday they were both very polished reports one of the reports was you know at the the highest it’s ever been are the highest it’s been in many many years and what the market due yesterday the market went down early in the morning what happens in cognitive dissonance cognitive dissonance is you know one of the most dangerous things for traders you look at those numbers and they’re very bullish it makes it very hard sometimes to go with the short side of the market when they’re bullish and yesterday yesterday the market was clearly down in the in the morning and if you looked at those numbers it would have made it very hard for you to do the correct the correct rate so my recommendation is know what time the number is coming and then read the market to how the market reacts to it rather than try and interpret the number yourself and what that number means because you don’t know what the markets already got built into it or you know what’s anticipated you don’t know the changes what was anticipated so I know I I the only people that come and thank me for that are people that are experienced traders really experienced traders and they will tell you that they learned that from me and they do not look anymore and they find it very helpful but it’s almost impossible not to look at those numbers or listen to and think that you can interpret those numbers and know how the market is going to react to it okay so we look this morning so far we are out of balance to the upside the market it’s a very narrow it’s a very narrow range we have not taken out the overnight high or the overnight low and and I don’t see anything I don’t know any trade that I would do right in here self so far one of the things that you’re going to find is that and we’ll show you we’ve used them advertising for the intensive we’ve got coming up here in a few weeks but they’re unsolicited comments or testimonials we got from from from traders and one of the things really has to do with the maturity of a of a traitor and the maturity of a traitor is being able to pass on a trade when it’s not it just isn’t clear what the market is going to do in there and so many times traders early in the morning they’re so anxious to trade they’re so afraid if they don’t trade in the first few minutes they’re going to miss the biggest trade of the day and that’s a very difficult time to trade you get a lot of chopped in that in that period okay we’ll come back to that but right now the market is attempting to go lower it’s attempting to fill the gap so the overnight inventory is a hundred percent long we are showing about sixty-five percent of the time there’s a counter auction to the overnight inventory and that doesn’t mean it has to take it out a hundred percent but about sixty-five percent of the time there will be some counter auction or rebalancing of that overnight overnight inventory and even if you don’t get the counter balance sometimes if the overnight inventory is long like it is today it will restrict further upside movement for some period of time just simply because there’s profit taking from those that are long from overnight overnight Long’s or overnight shorts tend to be relatively weak lungs or shorts the really large more sophisticated traders very often don’t trade overnight and the reason for that is they can’t get the volume and the liquidity that they’re looking for and what is what do I mean by liquidity if they had a large order to buy or sell in the overnight market they’ll get the

prices spread out to get some at 20 7 207 and a quarter or a half three quarter I mean and they’re not accustomed to that they’re not accustomed to having their prices strung out over a couple of handles but that’s what can happen in a thin overnight mark okay so so far we have the gap is holding the gap is holding uh we have a very net we have a very narrow range and we’ve got two more numbers that are due out in a little while and we have overnight inventory being a hundred percent walks I see nothing to do so far okay Julia questions while we’re looking at this yes Jim um how long do you wait for the value assessment to form you know if the gap is filled and value cannot at least become you know similar to value for you the prior pet session how long do you wait to make that assessment it’s not a time it’s not a time issue it’s a combination you’ll see how much conference there is as the markets trading lord what Julia is referring to the gap trading rules say okay if the gap is filled but value doesn’t at least become unchanged or overlapping yesterday then the odds are really high that we will have a later rally and the reason for that is that value will be higher and we change we trade value not twice so the question is you know well how do you how long do you wait well it’s a combination of you know if the markets going down and you’ve got high confidence you’ve got high confidence then you’re not going to wait as long a sec I got high confidence for markets one time for any lower I’m getting good good volume the odds are pretty good i’m going to get that value so but if the market goes down it fills the gap and it just stalls and there’s not much downside continuation then then you know you say well it’s pretty good indication we’re not going to get overlapping value so it’s not a single a singular answer it is a combination answer and you’re looking to see how much confidence there is how much volume and is there really a good strong directional tone okay great thank you Jim and you’re always carrying forward the confidence in the tempo and clearly we have a low it’s open you know there’s nothing there’s no directional conviction as of yet so you’re thinking of that as you’re looking at the gap being filled and that sort of thing is that correct sir or is it just shake out in the morning and you don’t want to make that call just yet yeah I don’t have I mean so far the pressures been on the downside but they’re certainly people could have come in and sold this market aggressively at all-time highs and you know the highest that you could have ever sold and nobody has come in and said well let’s do that it looks to me what I see so far is we’re pressuring were pressuring the overnight the overnight inventory that’s what’s happening right now the overnight Long’s are getting pressured and as we say that happens about 65 about sixty-five percent of the time that you know that that goes on and that’s what that’s what I see happening right here if you had a combination of really good strong selling in here you wouldn’t wait this long they’d be selling right off the opening bell so right now you’re getting it I think you’re getting some liquidation or overnight inventory they’re trying to they’re trying to close the trying to close the gap everybody knows where that is remember the closing the gap also puts you back within the to daya within the two-day high and then that would be the chances for a more significant run on the downside and so right now if you’re looking for example everybody’s got a different a different method of trading but let’s say you wanted to go long if you win this market trades write down where it is now something you can go along if you want to go with the gap go with the direction going to bought this market right here and you stop someplace down below the filling of the gap like I say everybody’s got a their own way of trading the market if you were looking to go with this gap on that last little break down there you know you you had an opportunity you could have bought there the with a stop at the gap is if the gap is filled I mean I’m not saying I would do that trade but I’m saying that everybody out there is is different and a lot of times what I’m looking for I’m looking for a place where I can put a trade on and I have a structural place

to place a stop and the structural place was if I do fill the fill the gap okay and I’m when you’re looking at this and the reason it comes to my mind here’s the opening we’ve been trading lower but values clearly building higher there’s no real volume on the sell side the heaviest volumes up here you know we got light volume down here so there’s no and we’re back to halfway a halfway mark of the light line there’s just no real conviction going on in this market today the market is higher the market is higher clearly higher we’ve gap tire there is no indication at this point in time that there’s anyone really aggressively waiting to take advantage of selling at all-time highs ok questions thank you Jim yes we’ve had a question about the value area high in the value area low and the point of control from yesterday basically you can see it on that profile to the left of the overnight profile that’s the value area high will make the value Ares a little brighter on Jim screen from the next webinar but that’s a the value area high and the value area low is indicated at the 9675 the Green Line a left-to-right point of control is that 98 75 okay I pay I pay no attention that today because it’s not prominent and I just it’s I don’t I I want to know where the value area highs and lows are i am not a purist where I’m saying I’m looking exactly for the value area high or low I i I’m my perspective is a little bit water than the exactness of at high or low I want to say overall what do I think is going to is going to happen okay great thank you Jim and this is an example to where men early in the morning it’s our experience working with traders that they can get chopped up in a market like this I’m trying to arm you know take advantage when the market really hasn’t made a decision so what we’ve seen in the intensive and just working with Jim that there’s a certain steady hand at the wheel that we don’t have to be overeager and like Jim said and there is a slide on this um no being mature as a traitor um you know you’ve hidden traitor maturity or trading maturity when you can look at a trade and pass and wait for something ideal to your particular setup or trait um so that’s it you know and you know you don’t have that maturity if you’re sitting here staring hard at this market too I want to go longer a while i’m going to go low you know when you’re feeling that impulse i got to make a trade i got to make it rain what am I going to do am I going to go long oh my god when you feel that you’re working more on impulse and when you’re working on impulse the chances are you’re not going to make the right decision that maturity to say yes it’s gap tire and everything else but there’s really no conviction around here I’m just going to set it out I get plenty of time they’ll always be good traits that is the maturity that you are that you are looking for in here but if you’re feeling over anxious to make a trade right now be involved in this market then it’s a that’s a difficult that’s a difficult situation because it’s your emotions are too high okay here we go one more time they’re testing the low and notice the low went exactly the halfback on the overnight market which again when I see that kind of thing taste what take place that’s a sign that the trading the traders take the traders in here are junior traders you know more of senior traders they don’t even know we’re half back as nor do they care but that’s it you know it’s a good day time frame reference it’s a good time frame reference so when you come down in but I’m talking about it’s the smaller smaller reference rather than larger you mean the overnight half back the other night halfback the daily halfback and those are day timeframe references but this came down exactly to the halfback in the overnight market and it stopped right there that is a very mechanical trade whoever was buying there you know is am it’s a shorter term it’s a shorter term trader yes okay thank you Jim um in terms of the volume POC and the TPL construction point of control on you know we have some questions there some are saying double distribution volume POC is here Jim doesn’t get that

mechanical about it he does use the TPO point of control that incorporates a time element and obviously we’re looking at volume right now but we’re using the volume at price here more as you know look at you got twelve thousand and twelve thousand that’s a lot of volume there is it going to bounce off of it or are they going to pull it over on them if those are loans in the market and break them and push it back through there it looks like it’s finding support there that’s how Jim would use volume inside the day we are looking at volume but not necessarily as analysis at the end of the day as a volume point of control Jim is like you said pretty much a purist with this tpo construction and using structure from the letter prints and not volume yeah the problem Julia phrase it perfectly sometime back people want to get almost in fights over V and POC or tpo POC and as I say that and she said why it’s it’s it doesn’t have to be one or the other reason I focus on the TPO is because it includes time price and volume the volume pptp Oh does not include twice and twice regulates all opportunities so anything that price advertises opportunity volume measure success or failure the advertised opportunity onsite time regulates all opportunities and volume measures the successor failure so I really like to look at a combination of all of those okay and we’re seeing here though Jim that the volume is supporting the market I mean it’s tried to press lower to it those to 12,000 prints we mentioned you know they printed more volume higher so it’s the volume is wonderful tool to use as a day timeframe trader reference their dynamic they develop these volume references develop you can see how that’s supporting the market but we you know clearly it doesn’t mean that it’s going to go up then Barca can pull it back down again this confidence is low it hasn’t made up its mind yet but go ahead Jim daddy mechanically you know the halfback level and failure fill the early gap those were no true a daytime cream buys if you wanted to do them like I say they’re not my trades I don’t have enough confidence in here but if you want to go with the trend and and there’s nothing wrong it’s okay i’m going to trade with the trend i’m going to i’m going to buy on an attempt to fill the gap and it gave you a mechanical reference which is a hat back overnight and just a couple of ticks off of the two day I this is what I pointed this out at the time that if you wanted to buy I said it’s not my trade if you wanted to buy that was a legitimate place to buy down there now Julia talked about this vibe if we start trading down below this volume people that were buying here to take this market back up can be very careful because it can pull all this volume over on itself so people that were buying this break you start trading back down below the 12,000 contracts here and all of a sudden that buying can be turned to selling as that short-term the short-term visor Leon are forced to liquidate later on overnight inventory has restrained the market advanced so far but it hasn’t corrected but it has it has put a cap on the on the market early on overnight inventory it is a very very important observation for short-term traders overnight enjoyed remains long and yes you don’t see the adjustment yet we’re seeing some pressure of the overnight lungs they’d love to squeeze them out or play the game they haven’t been able to fill the gap but you and your estimation Jim don’t feel like the overnight inventory is adjusted no it’s kept its cap the early events these formal I see and it is capped the early advance I mean so because some of the other night people every time the market sticks its head up a little bit they take a little bit of profit but there hasn’t been any wide sell skillet selling of that so now we’re coming up we’ve got ten minutes we’ve got a couple of numbers the numbers may be more important because this market is relatively quiet okay say I think the big number today is going to be the beige book it comes out this afternoon and the beige book sometimes it’s important sometimes it’s not the beige book really are incorporates the reports from the different Federal Reserve districts what kind of economic

activity and labor activity do they see in each of those districts so it gives it gives the amis a little more detailed look of what is going on in separate parts of the country and it’s usually a relatively important short-term short-term reference yeah I said it can add volatility on a short-term basis did ya okay thank you Jim okay what one of the questions we got so so far it’s but it’s pretty quiet out here this morning Jim um am i right that when you use the term time regulates that it means that the longer it stays there the more acceptance because I used to think they were not getting follow through um you know when something stays there so I would you know would reverse but it also could mean that there’s more acceptance as good time too well in the market if the market goes down and it comes out of a low pretty quickly I mean it was quickly rejected so time it was very quickly rejected time regulated opportunity and was there for a very short period of time part of the trickiness is if that time so initially time is an indicator that you may want to buy if it’s kicked out of there but then as time goes on and there’s no upside follow-through time can turn against you because you now they bought it down there but there’s no real follow through so the longer it goes without upside follow through those that want it down there they start to feel the pressure of being wrong without getting much reward so it’s a time is not something you the easy thing is when you get kicked out very quickly leaving a buying or selling tail that’s the easiest way to use time but it’s it’s it’s much more of a science and much more important when you get to a level and you know it can’t take it out but it just sits there you know and then all of a sudden if it doesn’t lift then be careful it’s a continuous two-way auction process but let’s go back and look at yesterday’s high there was the high and a period see period hi sista couple pics below it d period hi just one tick the load it left no selling tail so did it get rejected here yes but wasn’t rejected aggressively but as you can see we came back and took that out fairly easily overnight because it really wasn’t a very good high okay the market is down one more time attempting to fill the gap and you’re now a demo this you down below this volume remember you also are right at the halfback a level from the overnight that’s again it’s a very mechanical short-term traders reference and right now they’re still using it my guess would be if we trade below this level below half back then all of a sudden you get another little burst to the downside you saw it’s been long epic and they sell it and it was the early morning down there so there’s stops where people got long but we saw the volume build and people were asking it just came on the screen while you were talking can we sell it half back you know and obviously you’ve got a great reference if you can get out a few ticks higher if it starts to give way to the upside but why not I mean if you want to get in a trade and you feel like it’s week that’s a great trade location relative to today’s range right to them I mean why not if the if it’s going to hold as long as it’s a tight stop if they want to engage it it’s it’s a personal preference there’s nothing there is i have seen nothing that i wanted to do so far this morning but again i’ve reached that level where i’m very pleased to pass on a trade because there will be clear opportunities sometime before the day is over now we’ve got five minutes we’ve got a couple of reports due out and we’ve got about five minutes to go and what do you need to happen to see this selling well I need that you know I need to see volume and I need to see that we can get well back within the two day range I mean right now we’re getting some selling probably the overnight inventory but we’re not getting remember if there was any real selling in here they did this chance to settle all times hi is this morning and nobody’s taking advantage of it you’re getting liquidation the trickiest up you’re

getting the liquidation from overnight inventory you’re putting more pressure on these on these folks questions yes do you still pay attention to initial balance as you wrote about in mind over markets which would be the first to 30 minute periods not really I mean I I don’t do it mechanically I don’t pay attention to the initial balance per se but I’m always recording and internalized is the initial base narrow or wide in there and the light of the base the harder it’s going to be to knock it over the narrower the base you know the easier it’s going to be to to knock it over so I’m always I’m always thinking in those terms do I have a wide base do I have a narrow base okay we’re now we’re going to change time periods in three minutes it’s very hard it’s going to be very hard to get um unchanged value today you’re going to have to get unchanged value you’re going to have to pretty quickly get down below the two-day high and really start to show some extension to the downside so far all I’ve seen this morning is some liquidation of overnight inventory some people are selling this because it’s high but I don’t see any indication whatsoever that I have anything other than short-term selling this morning this last break took the market to a single tick below half back on the overnight market it did not fill the gap as we said earlier still with a potential by with you know a stop at the gap is if the gap is filled and against it’s it’s a i have seen nothing that i wanted to do this morning and I understand that I bet there’s people out there that have traded three and four times already this morning and sometimes I just say you know what it’s kind of a if these markets have been very difficult a lot of low volume low confidence and I just said you know I just don’t have to trade I will wait until the trade becomes much clearer to me then somebody can say well Jim but you always say go with any gap that’s not filled and that’s a legitimate if you if you want to buy the gap this point like I said when you come down on those early breaks you know it’s given you two opportunities hasn’t filled the gap so if you had just stopped down below you know after the gap was filled it hasn’t been stopped down it’s just it’s again it’s a personal it’s a personal preference but there’s just nothing that there’s just nothing the way i trade that has told me this morning that wow I need to get in this market I’ve got an opportunity building right now I’m just I’m just there’s nothing that’s jumping out at me they’re trying I you know I wouldn’t have been long early myself simply because of the overnight inventory but I don’t see any liquidation mean meaningful at that point you’ve got one minute until the time changes and one minute until the reports so those reports you know there’s nothing else going on those reports can add the volatility to the market and someone’s asking is there starting to be acceptance at these higher prices oh yes oh yeah no question okay now you do not have a good low the reports are out you do not have a good low yes if someone’s noting that the volume at the loews here you know is very low it’s still starting to you know it’s still printing but it’s not that boom boom boom where they just come in and start selling it it’s you know sometimes a market has to go lower and check it out make sure that’s secure before they take it higher in overnight inventory they love to squeeze them out too well then the overnight inventory has restricted has restricted to market this morning on the upside on the upside yeah ok so now you’ve got a poor low from the day the market went down one more time

one tix short of a low it bounced from exactly half back overnight you do not have a secure lotus in other words there’s no there’s no buying tail down there so it’s not a high it’s not high confidence low I don’t see any confidence in here all i see very actually some very mechanical trading in here i see a lot of back and back and forth in here but it’s the sellers have not been able to have their way with this market i mean really clearly could have but you know the buying is there’s no serious buying in here the market is still in a very very narrow range now this range the base of this range is very narrow this when somebody ask about initial balance so the initial range in here is very narrow and you know that can be a that this tells us that there’s a lot of churning going back going back and forth here but there’s no real there’s no real conviction in here whatsoever that i can see it went up to the microphone up to one tick below half back and they were a little selling there so we have we basically have a poor high in be period we have a poor low in be period very low very low confidence a poor high in be period what do you say you mean because I’d like to have back and just hose it when it went with good good question one tick below half back very mechanical very mechanical high which is somebody selling because it was it half back and you know fifty two cars yes yep and we know too when you talk about a narrow initial balance range just in terms of initial balance or the first hour we know you wrote it in mind over markets a long time ago that went you know the first the higher the low is often made in the first 30 minutes or 60 minutes of a session so it can help us visualize what may be coming it’s always important to be looking out and seeing what could be transpiring and you know keeping that in the back of your mind it can be helpful I mean I don’t think we’re there yet i’m not you know it’s early to say that yet today because of no defense notice yesterday you had a poor low h I period low yesterday and again if it’s a trading market you now have a poor low today you now have two backed back poor lows and what I say that’s an exponential indicator in other words if one por lo is a minus five we don’t do it that way to poor lows back-to-back wouldn’t be minus 5 plus minus five which would be minus then it would be minus 5 plus two back-to-back lows it’s an exponential effect so the second back-to-back low is is like minus 30 or something like like that the two very when you see two back-to-back poor loans that’s an indication that the longer term money isn’t interested on the buy side in here the longer term the longer term money in here is more than likely staying out can you talk about the opening range and I’ve seen people use time based on the opening ranges and you know things with volume and tick charts the pit calls the opening range when all the market you know open orders are filled do you use anything like this no I don’t know I i don’t i just i love to see you know I we’re back and forth through the opening like today we really haven’t been back and forth to the opening up a little higher and it’s traded lower ever since but they’ve gotten very little on the downside but at the same time you know you don’t have a good you don’t have a good low today you know you don’t have a good low you have two back-to-back poor lows you know I almost I don’t know why I sit here and feel apologetic I mean I can’t do anything about the market and I shouldn’t feel this way always like well let’s have some activity we’re doing a webinar but as I look at it it would be difficult for me to be on the long side

with two back-to-back poor poor lows it’s just not a particularly good indication that i had any aggressiveness on the buy side well I’ve had on the buy side it’s more than likely been you know short term short date time frame in short-term money and with three tix from a gap fill and volume gym today just so you know someone gave it to put it in 350 4 million a thousand contracts as of ten am on the first half hour so that’s you know that’s low not as long as we’ve seen some days can can you explain Jim why you use the PIT high versus the settle to measure your gap you know it’s convince priors pit session settle to measure a gap you use the high of the range from the prior day can you explain why you do that it’s just I I’m talking about it it’s just a thing that’s really out of balance relatives of the previous day that’s what I’m looking I look something out of balance relative to the previous day and if I get above or below the previous day’s high or low I’m out of balance the settle this settle is more of a random number a lot of times it’s just people trying to even up you know as we get close to the to the clothes so I just don’t it’s just not something I’m looking for something meaningful out of that meaningfully out of balance not just a not minor I want something that’s fairly meaningful Jim the Globex low was made in the overnight and there was a lot of news with the airline crash on the Ukraine border and all but it would come in the Globex low at eighteen ninety I think 75 cleaned up a lot of mess in structure but it was overnight do you find I’m talking that you don’t have to move your profiles back there the question is how do you anticipate information with the Globex low on this swing low from the all-time highs before it gunned for the all-time highs again do you feel like the market is going back there because the you know the low was made in the Globex III it’s not clear in my head I’m sorry well in the last correction the low was made in the overnight session at eighteen ninety 25 how significant is this this Jim expect that we will revisit this sometime well i’m sure i recorded but you know once once it goes through it i don’t worry about it what do you mean once it goes through it you mean one sounds really better we rallied there and yes if we go back there i’ll focus on it but right now it’s not something that is uh that I’m focused on so that’s not weighing on your long-term analysis that we need to go back you just want to deal with the shorter term references here and the Alzheimer’s that’s I really try to take it a day at a time I’m very much aware that that was the first time down below I believe it was the 1900 level and it bounced it came in the overnight the market had got just unbelievably short so if we start to go back down there then all of a sudden I guess the best way to respond to that question is it’s information to carry forward and when I say it’s information that carries forward that is my way of saying it’s not information that I’m using right now but as I say it’s information to carry forward if I start back down towards that low then I will focus on it I will get back into view very seriously and we basically recycle it because okay now we’re heading back down there it would be the second time down to the nineteen other level I know that the law was made in the in the Globex market and and then I would recycle it in bring it back into place but for right now we’re clearly above it and if I focus too hard on things like that during short term and a time frame trades it will give me cognitive dissonance okay thank you Jim

I hear there’s somebody expressing their opinion at your house Julia yeah she wants in she’s not coming tough love okay what am I go ahead girl but no no go ahead no go ahead no just someone was asking he’s been in you know the intensive and wondering he hasn’t hurt the overnight halfback mentioned too often um you know but when there’s nothing else going on there’s no directional conviction no confidence they can lean on that it’s something they can lean on because it’s no bias absolutely perfect response yeah you’re right I don’t normally look at it but when there’s nothing else going on they’ll trade or short-term traders will take anything you and I can see it here we know where it is they’ll know where it is so anything markets tend to be very visual in other words references that they can see are much more comforting than than non visual reference a non visual reference would be you know a Fibonacci number or you know something that doesn’t show up on a charter on it on a profile okay now from a personal standpoint I’m not recommending anybody else okay i just i just bought some putts and why did i do that and number one it’s a child’s portion I did it on this little rally back and it’s because I have two bad lows too bad our to poor back-to-back lows I was it a trade i do in any size no I is it is it worth is it worth taking a look at to me I decided that it that it was just because the two back-to-back poor lows now a lot of people could argue to say Jim I don’t understand that tray because you’ve got the gap you didn’t fill the gap don’t you want to be long and that may be absolutely right I’m only I’m only telling you just because that’s what I did because of the of the poor low but again it was a child portion I’m not married to it or anything or anything else it’s just a I’m just questioning if the low is going to turn out to be any good as we go through the day right we’re clearly back up to half back we’re clearly back to halfback they get through hat back they can clearly easily go for the for the high the next reference on the up side you get above half back the next reference becomes the opening follow that would be the early morning hi following that would be the overnight I um Jim yes this is a question we have one about the lope or low but as far as the poor hi we gap tire is I considered that we’ve repaired the poor high from yesterday oh yeah yes just think of it as single princeville to because it’s you know it’s repaired it we visited it it just think of the gap is single prints as far as the yesterday’s low Jim did you expect what is jim’s analysis of yesterday’s H&I por lo did Jim expect the buying tale the by that followed the poor low did you expect that yesterday i was driving yesterday but it was interesting how it couldn’t even take out the pit low from the prior day if you could have it would mean it couldn’t even get their take on Fridays low more than likely what happened is the market got too short remember poor lows and poor highs are very often an indication that a market has gotten too long or too short so if you have a poor hi very often it’s an indication of a market that’s gotten too long to por lo very much of an indication to markets gotten too short so if you take yes you had a poor high and a poor low so it probably got too short you know cuz they had the poor high it wasn’t any real aggressive selling up here so this probably got too short right around Friday’s low and then when there’s nothing else go and sometimes there’s nothing else going on it was the first day back it’s unlikely that the more senior traders and money managers a lot of times they don’t wander back in until you know later this week or next week and killing the first of their not that anxious to come in and trade the first day back after they’ve been back two or three days you know our week then all of a sudden they take a little more serious look at what what they’ve got for their port for their portfolio you know de sep tember

September overall doesn’t usually appear to be a particularly good month you know in the markets traders kind of have a tendency to come back from vacation and reassess but you don’t want it you don’t want to spend much high time on that I mean you hear people say you know selling selling may and go away and you know that’s broken a few people the last couple of years so you just then I’m just talking a little bit of the the markets been up the markets been up for the year is up last month it’s not uncommon for traders to come back and I’m talking about money managers come back from vacation and start to think maybe they should take a little off the table but again there no knowing thing in here this morning there is no confidence in here this morning there’s no selling be very careful there’s no indication you could get short-term selling and short-term liquidation but you have no indication that the longer term money came in and said wow here’s a chance to sell at all-time highs I’m going to do it you know you’re you’re what 45 minutes into the date and that hasn’t happened again very very low confidence Julie let me go to it you got a question before yeah and people are asking about your we have a few questions first gym people are asking about your put purchase first what is the time frame and second why not sell futures the bottom line is this is what Jim does he hedges so he buys the puts when their market popped a little at halfback gets a good price on the puts then when the market rallies he can sell against them are you know use not when the market breaks when the market breaks the mark I’m sorry to me when Weiss it breaks I can either sell the foot so i can go take long against the butcher it just gives me a little bit more yeah you can just unload them yeah rather than an outright future I’m sorry of course he when the market breaks he can buy against them and it acts as a stop I’m a new or take them off depending on what you see okay for example yeah the ideal thing would you be what would cause me to go along we take out the morning low we pop on we fill the gap and there’s no downside follow through oh okay thank you very much I may go long or if there’s anything on the downside this morning we should you should get a double disc I think on a day like this you should get a double distribution day you know if there’s anything on the downside you should break away and establish a whole new a whole new distribution down here but basically the only reason I did the trade was too I don’t like the market but I’m not going to be an idiot but the two back-to-back por lo said okay that’s worth a shot there there there 20 there two thousand puts they expire on expire on Friday so again and like I say it was a child a child portion very small trade okay let me go here’s here I want to I want to cover these comments these are unsolicited can you put it on scram it’s too small player on slide show okay how’s that better okay these past five weeks have opened my eyes you have my gratitude I now have greater market understanding greater self-awareness and greater confidence I never would have guessed this to be a self improvement program just discovering and contemplating my weaknesses and strengths on a daily basis with the high emotion that I attached a peak performance has been life-changing Eric thank you very much and and it really is what we’re trying to do in when we do the intensives we’re trying we’re trying to understand the market from the point of view of the behavior of the people that we are competing against and what happens so many times when you start thinking in terms of the behavior of the people you’re competing against you start reflecting more and more on your own behavior and if you think about it if you know probably no more than three to five percent of the people that they trade make money if you do if you do what every other day trader is doing your chances of being successful are pretty slim so you got to understand when they get too long understand when they get too short and you’re actually playing against on those emotions you know you’re when they get when they get overexcited on the upside or overexcited in the downside the tendency is for you know if you’re not careful is to go with them because boy it looks like it’s going down it looks like it’s going on as you start to understand the emotional level of trading and what they’re doing sometimes it’s very helpful to say wait

a minute I don’t want to get I don’t want to get caught in that now let’s just stop for a second okay so we now we now have gone down and mechanically filled the gap we filled that we filled that gap down there now the question now this is the really difficult question if there’s anything on the downside we should get a double distribution day in other words we should get back into yesterday’s range and we should start to extend to the downside and it’s low early I’ll prints from the be period we should come back to the double prints up and pull and hold those single prints and so far it’s certainly not it’s certainly not very convincing so far um so hold on just one second if you will Jim we have a comment we only traded one tick above the open and we’re unable to trade through the open again leaving this point out of the discussion you know as it’s just a problem you know for day traders um he’s saying it’s an egregious error but um I mean do you have any comment on that I’m not sure what would just not coming back up to the open and trading surely oh well yeah there was another I still think it was some pressure from the overnight um but he was it’s a legitimate when you come back to the only it’s a legitimate short when you can’t get back then it’s okay what do you need for downside continuation you know you need not to come back there you need to you know you get back fill the gap and get acceptance down there so you know what happens sometimes after the site you look at it so well I should have gone short day well I i can see that after the fact the market was very quiet this morning and like I say I am I finally decided to do a trade because of the two back-to-back for loans now just a minute ago I said excuse me for a second and what I did is I watch them futures against my foots and the reason I did that is I I’m not feeling the conviction I’m in pretty good shape now because I got lucky on the purchase of the puts it does two thousand strikes ten they were two thousand strikes they expire on Friday and you know and now I have you know now i just bought I’ve bought forty percent forty percent P chase against them but uh I’m sorry 30 about thirty-five percent futures against them the foot so at this point in time all i want to do i just want to see it i just want to see it move or either up or down pretty sharply so people okay and we filled the gap not much conviction value is higher can we start to you know can we think about getting long well I I don’t know I don’t jump to that I mean what am I saying right now if there’s anything on the downside you keep the double distribution so you know your trade right now is true that your trade right now is to the short side you know with your stop probably right there with the a be traveling at the 205 level you trade right now to the downside you filled the gap and if there’s anything to the downside you probably will not trade back to the 205 level which is where the early morning low at the a b-level was we had a question here was can we say the sellers cannot conquer yesterday’s hi this is before we filled the gap and buyers want better prices and now he’s asking as we filled the gap um do do we say that buyers want better prices before they’ll get involved I I thought I think you can you can overthink it okay I understand what you’re saying so you’re looking for where do the responsive buyers come in but I think what happened here this morning is got a very low very low confidence market remember overnight inventory was 100% long and we said that’s about sixty-five percent of the time that we get a counter auction relative to that overnight inventory so as the day went on as the day went on and you didn’t get the bounce that puts more in more pressure on the overnight

on the overnight inventory on those people holding overnight positions the longer that goes on and they don’t get out of the position and the market you know the market doesn’t lift the greater the odds that all of a sudden those people are going to hit the panic button and start to liquidate that inventory I think that’s what went on this morning and I think that liquidation is still is still underway in here okay now the question becomes you filled the gap the question becomes now how does value what happens to value we’re right at the top of yesterday’s value so as time goes on you have to get accepted down below the top of yesterday’s value at the 202 level what is it 20 to 75 and if you don’t then all you got was some liquidation all you got was some liquidation from the the overnight inventory and once the inventory once the overnight inventory is corrected then the market begins to rotate hire additional questions or comments Julia hi Jim when you say that you’re hedging by thirty to forty percent are you using delta to determine the percentage no I it’s nothing that sophisticated I just I just look at it you know for example if I had 10 puts if I had 10 points three futures would be you know thirty percent for preachers would be forty percent it’s it’s not I’m not I’m not a scientific person I don’t use the deltas per se it’s it’s more and this is why I hate talking about and doing options seminars because I don’t do it scientifically based upon deltas and you know all the Greek numbers etc I I basically looking and saying what do I think’s going on in this market and it’s so some of it it’s some of it’s just kind of a Kentucky windage sorry sorry I know that’s not a pretty a pretty good answer but I can look and I can pretty quickly calculate ok here’s what might put cost me here’s what I’ve got in them and you know what what keeps me break even what gives me a nice profit I say okay what I what I really need is I need I need a pretty good move up or down to make it really attractive but I’m pretty well I’m pretty well breakeven unless it just goes to yesterday’s high and stops okay let me go back so we did fill that okay okay go ahead go ahead I’m sorry no but you’re before you go back I mean until we see usually will see some type of exhaustion before this is done traders are looking you know values higher they’re looking to probably you know situate or position themselves perhaps on the upside with good trade location but clearly until this gets some exhaustion and volume comes in to stop it or turn it on you wouldn’t be looking to get I mean you’re long but you have puts on the other side so it’s a different time frame it’s mine totally get money it’s not a different timer it’s just a different rift parameterization dress I think you I basically locked in I basically locked in some profit from the puts I’m senators saying that I didn’t pay much for the puts because they expire Friday and they’d rather the money when I bought but I’m sitting there saying I this market has a pretty good shot that it’s going to go you know higher later on and if it does that I just want to have the have the futures because you know there’s not a lot of conviction on the downside here this morning as I said early on the if there’s any long-term selling they could have been in their arm early and be selling this market at all-time highs and nobody was doing that I think all we’ve seen this morning is some liquidation I think all we’ve seen this morning is some liquidation of overnight overnight inventory and that’s why you doing the short term trading understanding overnight inventory is very important and then as that process was going on when I saw the second por lo back-to-back and since who buys exactly at at the early morning low that’s not long term money that’s short term or day timeframe money and I said okay well thank you very much I thought that was a piece of information allow me to make a short-term allow me to make a short term trade two back-to-back torlos I’ve talked about that numerous times if that’s an exponential type of thing it

was simply a risk/reward now it was hard on to explain to people because they would jump you know what why would you you the gap hasn’t been filled why would you be going long rather than short it’s their short term trades and you know it’s just the circumstances so when I talk about understanding markets in terms of the behavior of the people we are competing against what i thought i saw this morning was no no long-term selling at all I saw overnight inventory one hundred percent lon you saw that in the report anybody that’s sitting with us has heard that on numerous on numerous occasions and we already know that sixty-five percent of the time we correct overnight inventory and it doesn’t have to be a full correction early on we said the overnight long human boy was probably restricting early morning advance and then finally I think it just kind of weighed in and you got the you got the liquidation that the overnights finally gave up and began to liquidate okay let me go back over here Jim who’s in pain right now you know when you ask the question who’s in pain obviously the overnight lungs are longer early tonight overnight longs that haven’t gotten out are the ones that are still in in pain or pet session the early morning pet session when we saw that volume that our housing those that were buying exactly on the on the low this morning those who were buying the early morning low kind of mechanically we saw that you pointed out where that volume was and you know you kind of took that as supportive I look at that volume and I thought well yeah it looked to me like it was weaker by him because there was no real follow through to it it got my attention early on but when it couldn’t get to act above half back I mean it just mechanically there it should be careful it gets pulled over in itself which is what happened ok so the but the people in pain right now is the early morning longs the people that were blindly going along in the overnight laws okay this first comment by eric s is very important because so many times if people enter into the intensive thinking that you know what they really want what they think they want is where do i buy where do i buy and where do I sell and that is what yeah you have to execute at some point in time but it’s far more important to get a basic foundation in understanding your yourself understanding the market getting a greater understanding of market and understanding getting a greater understanding of self understanding and understanding the behavior the people you are you are competing against I mean I played a lot of athletics over the years a lot of racquetball and now I’m putting playing pick at pickleball and I’ll tell you an awful lot of what goes on is you’re constantly sizing up the people that you are competing you are competing against and an awful lot of the decisions you make are based upon who you’re competing against and rather than doing the same thing every time you know and trying to do it mechanically and that’s why it’s so important and when Julia came up with the idea of the intensity you know when we go to and do a seminar in a hotel or something like that uh you know we got good remarks Julie good good reviews Julia takes good care of the folks answers questions cease to their needs I sing and dance on the stage and everybody thinks boy didn’t they do a great job but the truth of the matter is over a three to five day period one if you don’t get enough of the right kind of markets it’s going to be very difficult to really get the experience you need and secondly it’s very hard to internalize all the information it’s important that quickly so the intensive spread out over a 30 day period increases the odds that we’ll see better markets will see better markets on my better I mean different kind of markets and it also gives us a much better opportunity to begin to understand ourselves and internalize the information that we’ve seen now the next comment the next comment down here is now that I’ve had time to digest and put into practice the material presented I find that I am making fewer trades per day and surprising enough to me more profit Ron w the no strongest comment the strongest comment that we get from people and they’re usually it usually doesn’t come from people that are that are attending their first intensive it

usually takes the having been through the tape sets reading the books and in 1002 that people start to understand this idea that the less I trade the better most people over trade most people are too impulsive too and they want to trade too early um and when you start to get to the point of the ISIS Julia said earlier we’re talking about trader maturity I think that’s on the next life when you can pass on a trade because it really doesn’t fit what you want and you say it’s I think it’s going down but it’s not my trade i’m passing you really are starting to become a very mature trader you’re trading on your terms not on someone else’s terms and when you trade on your terms you are in such better such a much stronger position because I always I always chuckle it in am i as i say my daddy said never been another man’s game well he was a very poor gambler so he should have listened to that but there’s an awful lot of truth to that you’re going to Train I wanna play my game and that doesn’t mean I can’t control the markets but I can control what opportunities I’m looking for um and let’s go back you saw that a little bit this morning I brought the markets back up you know I didn’t particularly like the market but I am I saw a trade that interests me the two bad back-to-back close once the gap was filled I didn’t feel that there was any real selling and I said I think there’s probably a pretty good chance this market rallies uh in here or you know I said well so if I really thought it was going to crater I wouldn’t have hedged the puts either just sold them or left them at that laughs there’s not the conviction is in here so I’ll take the short odds play I’ll just heads up my puts a little bit so they’re not gonna they’re not going to hurt me I cell bill by outright singing you by sonia i thought i buy futures against the puts but you know if I thought it was really a weak market then I wouldn’t but I didn’t see that weakness I thought I’d had some liquidations home overnight rate so I’m trading I’m training my game I’m trading on my terms not anyone elses and and that is the kind of thing when you get to that level when you get to that level you really you really start to master the you really start to master the markets the big thing the big thing is to trade on your terms but we find consistently that the people that bring down the number of trades that they do have the greatest odds of becoming profitable and I can’t tell you how many times that has come back to me following the last intensity I got the most positive comments based on that that I’ve ever received as long as I have been talking about trading and sometimes people are just amazed I know the one traitor in here I remember him years ago sitting in a conference we did in Napa he couldn’t hit off the crude floor nymex floor and he could see his figures constantly buying and selling buying and selling and you know and he wasn’t being successful but he felt like a traitor and that’s when he knew to as support rating yeah that’s right and as it went down first reported I think he brought his Commission’s down by sixty percent you know now he he’s trading on his own he lives at home he supports his family and you know does less and less trades and as this as this quote said I find out making fewer trains per day and slicing of me more profit remember there’s own to risk in trading there’s a financial risk and there’s a psychological risk once if you trade too much usually expend your psychological capital once you expend your psychological traffic capital it’s very difficult to make the correct rec’d rage in there um we hear floor traders say that they’re paid they have to change their paradigm you know that they’re paid not to trade today you know as opposed to being on the floor low commissions really in touch with everything um so they’re paid you know to just sit tight very few x4 traders are able to make it trading electronically because it’s a totally different game you would think that they

would have an advantage but in sometimes it’s a disadvantage so the level of success coming off the floors is very very low it’s frightening the number of broken homes and marriages and and sometimes even suicide some people that you know were successful on the floor and can’t make the transition to electronic trading off of screen it’s a totally different ball game okay but here you see again where you can pass on a train you don’t feel the need to have to trade all the time you become comfortable yourself you’re reaching trader maturity very very important consideration to make okay the fall intensives coming up it includes eight hours per week I do live nor narration narration and as I think almost always we have added more hours of live trading throughout the day there’s a dialogue or it’s a one-way chat that I’m putting out comments throughout the day of the last of the intensive before I wasn’t there all day I when I was there I would do it the last intensive I was there all day unless I had a doctor’s appointment or something and the following intensives I will be there all day making chat comments throughout the date because a it’s one way but Experian it’s very important because it’s as close as you get to having you know one-on-one mentoring which is prohibitively expensive for most for most people upon enrollment you start receiving the two data reports with you a recap and preparation report every every evening and then we do an update in the in the morning and upon enrollment you gain full access to the over 100 trading articles on over 50 webinars that is just great great background Joe later your lips are moving your breathing that means you have a question or a comment no that’s great Jim can you go back to the markets we have a couple of questions of the overnight high being you know still hanging out up there um how does that factor into your market perspective you know for the day well it it didn’t it factored in early to saying it’s very the odds are very low that that was the all-time high doesn’t mean it’s not today’s I I pointed out in a report that you know the market made a high in December 31st in the holiday atmosphere and that high it was an electronic high of following December 31st and that I wasn’t taken out until the 24th in February but it was taken out but so I factored I fact Rhydian but more than more important what I fat what I factor in more than anything is that early this morning overnight inventory was long factor one sixty-five percent of the time or so we see a correction next I said okay the over if there was any if long-term money really wanted to sell guess what they could have sold an all-time fit session highs this money to their life to the heart’s content they weren’t there they weren’t interested so I think all we got all we got was just some liquidation of overnight inventory and once that was over you know the markets you know trying to trade higher and where is it right now it’s back to halfway all trends are up the market had a chance this morning didn’t do anything it closed the gap and we said if the gap is closed and value isn’t going to be unchanged or totally overlapping yesterday the chances of a later rally are pretty good the market went down exactly to yesterday’s value airy high which is not comforting to me that’s usually a sign of very much trading it’s a very visual reference that more and more traders are knowing are you know are aware of and I think that’s all we’ve got going on this morning the the problem sometimes traders try to make more out of a market than exists like I said at one point in time I were almost feeling apologetic that the market was so slow i’m doing a webinar the markers so slow i want more and i’m sitting saying what a silly thing to feel what a silly thing to feel I mean the market is what it is there’s nothing going on and God and like I say the the one piece of information and sequence it we use a word sequencing a lot and and it’s it’s a word that it just entered in the last couple of months that we started using it you know if you would have asked me early on what do I think I think that is going to be higher today and you would say well why did you bike which well it’s a sequence it’s the sequencing was once I saw the two back-to-back or lows I thought I had a pretty good chance to get more

liquidation from the overnight inventory and once i got that inventory once i got that liquidation then i could decide you know what i might want to want to do again so it was the sequencing what came first i said now if I finally I watched it for a long time I finally identified something that interested me and i said well i think the sequence probably is you know we would get a little bit a test to the downside a little more liquidation and we probably come back up you know again I don’t know what’s going to happen for the day is over but this idea and it’s so much it’s so difficult being a short-term day traders or short term because sequencing is extremely important I you know these little short term moves that go on in the in the marketplace okay um so anyhow the other thing is in as soon as you sign up for the intensive you start to get the daily the daily reports in there so there’s other packages as you will see for people that are new to us there’s other packages that include you know one or two of the videos and the intensives so there’s other ways to get knowledgeable on the information but if you are new to us again we are I don’t particularly like the word but we’re really a total package it’s not a it’s not a question of where you get in where you get out it that’s important the execution is important that’s how you really make money in the tactical side of it but it’s really this under God understanding of the market and really how the market works the understanding of the market understand the behavior of the people you’re competing against and then at the same time understanding your own behavior how are you going to how are you going to you have to use the behavior the people you’re competing against to be profit but you also have to control your own behavior sometimes you want to go with them sometimes you want to pay them but you at least one derstand what they’re doing and what their motivation is once you understand that it gives you a really a really strong edge in trading the markets anyhow um well way over our time but that’s okay any final questions Julia well a couple of questions about the indices how do you correlate the SP with the Nasdaq early today the Nasdaq had filled the gap before the SNP you know do you want to speak to that in terms of how you look at multiple you know the the indexes I’ve been like you know you could have taken if it’s from any part of my career and the answer would have been different um basically now I I do not look at the other indices I’m looking at this market I’m looking at this market now am i aware am i aware that we’ve had some pressure on the downside in the bonds the last couple days am eyewear am i aware that the dollar is been pretty strong I am aware of that but I really don’t i don’t try and coordinate with other markets there are so many things that keep you out of a trade and you start looking well what the Nasdaq is doing what’s the SNP’s are what’s the the Russell doing in most cases give you more reasons not to do a trade than reasons to do a trade anybody you know traders know if you see the Nasdaq’s down and fills the gap first in this Evan you know follow this market with other people trading this market that already know that information so it’s nothing really new it’s really nothing new information I just think you’re going to be better off your short-term trader I think you’re better off the focus on the market that you’re trading rather than running all over looking at every other place for information on how to trade this market I think it will mislead you I mean we had a point we had a period of time there where we had a huge correction in the in the Russell in the and as that and they and the espys and Dow eps going higher I mean do it that stuff can you could do you more harm than good I think look at this market I didn’t look at any other market this morning I had a pretty good idea what’s going on okay another couple questions when you say value is up its compared to yesterday’s value area correct not in terms of the current session because she’s saying and if I’m looking at just today the value seems to be going lower but you’re referencing just to be clear about how you assess yesterday it’s always relative to yesterday just the high of yesterday’s value area 20 to 75 the low of today’s value area so far is 20 for 50 so value it’s always value relative to yesterday now that doesn’t mean that the market

doesn’t start to you know extend lower and point of control my Great Lord and today’s value starts to change but not right now and Jim people are asking the gap rules it’s you know in the glossary there’s a definition of the gap rule it’s really one rule if the gap is filled and the value cannot become at least you know similar to yesterday’s value the odds of a later day move in the direction of the gap are high so orgrim and that’s what we’re getting so do you the gap rules are in play then sir correct absolutely absolutely the gap was filled the gap was filled you know I was processing information I was sequencing I was processing information and it looked like the gap would be filled it didn’t look like there was many much odds that the that the market would do much on the down side simply because we went you know we went 45 minutes like I say anybody could have sold at all-time highs and nobody took advantage of it guess what if they don’t want to sell it all time highs where were you going rotating back higher with the value and that’s why you got you took a long what it bought a handle lower than the PI from yesterday somewhere in there Oh to 7500 three okay um I think you know in terms of the confidence the slowness of the sell-off adds to your low confidence assessment for today’s market correct Jim yep in the correlation we got okay no no Jim mind once on the weekly SP futures contract so that’s weekly puts you bought Friday puts of X weekly options that expire on Friday um you can get without they usually I’m just saying on your pud purchase this morning usually that’s what I that’s usually what I do and that should change over the past year or two easting and more monthly you should do more monthly it’s a you know don’t automatically go to options I mean there’s a lot of psychological negatives trading options it adds it has a lot more complexity yeah first understand the fundamentals before you’re passing behind your back i mean jim was involved in the CBOE being formed these looked at options for decades and I mean used to go to dinner or lunch with black the black-scholes model gentlemen right so I mean this is something that is so inside and internalized for most of us and believe me I make I continue to make huge mistakes and usually when I make a mistake it’s because psychologically you go psychological comfort with options it really wasn’t reserved okay final question would you say that we now have price acceptance above the two thousand and you know where would you take that from here you know finally there was a little tug of war around 2000 obviously I shouldn’t say a little well we went down below it yesterday you know but right now you’re accepted above 2000 but it’s you know it’s not that far away but you know it’s not that far away today’s low is 2000 275 so we’re not there’s nothing clear we’re not really clear of that level just yet um you know this is just the second day back from summer vacation don’t get too complacent just just yet just stay with this market on a day-by-day basis so what happens over the next the next few days as the longer term traders and money managers settle back back in and don’t forget we’ve got the market will be quiet today you’ve got you’ve got the ECB tomorrow it’s going to be a lot of focus on a lot of people are stepping the sideline today because short-term traders you know the ECB is more than likely going to do something tomorrow you’ve got a TP tomorrow you’ve got the employment number on Friday there’s a lot of short-term a lot of short-term the things expected to happen plus it’s a sep tember and i think that the Fed says they’re going to do away with tapering in October so you know and people still don’t know what the result of that once the tapering is over so there’s a tremendous tremendous amount of uncertainty in this market almost all my trades are going to remain short-term right in here all right I thank you all very much I’m glad we could go an extra half hour and I really hope that a lot of you that haven’t been to one of our intensives or those that have been and want to repeat I hope you join us and they say we will do our best to give you more than you ever expected in the intensive so all right thank you great thank you Jim very much thank you everyone we will get this recording posted to the site in about an hour it should be done okay so thanks everyone for being here have a wonderful day and our next webinar is next week if you’re on the email list you’ll be getting that it’s at our site under upcoming webinars

we have a webinar each week up until the end of the September okay thank you very much be well bye bye

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