Rebel Traders 078 : Red Pill or Blue Pill

Ever felt like Neo when it comes to the markets and Morpheus is stood in front of you with a red and blue pill? Which would you take?

Ever felt like you are in "The Matrix" when it comes to the markets?

When I first started investing and trading way back in 1999 (the same year the movie "The Matrix" came out), I had no idea that I had taken the red pill.

Since then I have dived down many rabbit holes to see how deep they go and it seems since then I have become Morpheus. My mission has grown to show others how to navigate the Matrix (or the markets in this case)

Our mission has been to make the markets as simple as possible to trade successfully. However, it's taken a long time to make it this simple.

So, in this weeks show we look back over mine and Phil's journeys to get here, from very different philosophies and backgrounds. Not only that, we are zeroing in on what is going on with the markets right now in all this turmoil...

The question being, where is the woman in the red dress?

Time Stamped Show Notes

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Sean Donahoe: The question is, do you know Kung-fu? Ready to rock? Let's do it.
Automated: Rebel Traders takes you inside the world of two underground master traders who take an entertaining, and contrarian look at the markets to cut through the noise of Wall Street, and help you navigate the trading minefield. Together, Sean Donahoe, and Phil Newton are on a mission to give you the unfair advantage of a rebel trader. Now, here are your hosts, Sean Donahoe and Mr. Phil Newton.
Sean Donahoe: Hey, hey, hey, this is Sean Donahoe, and I am joined by ... I don't know if this is gonna be Neo, or Trinity over here, but we have a little bit of a Matrix vibe here today. How you doing, Mr. Phil Newton?
Phil Newton: Well, I've been told I look mighty fine in a one-piece leather outfit, so I'm gonna go with Trinity.
Sean Donahoe: Wow, okay, this is getting off the tracks before we even bloody start here, and that's between you, and your good wife, but that being said-
Phil Newton: And maybe a therapist.
Sean Donahoe: I think you need more than one therapist, and a whole lot of medication, but there you go. That's a story for another time. Today, we're kind of wondering why ... Okay, here's the thing. Some people look at the stock market like it's the bloody Matrix, okay?
The uninitiated are walking around, it seems, in some sort of haze, unaware of what's going on around them, what money flow is happening, what business deals are being cut, and everything else, and what is actually driving the world around them; while it feels like a select few are able to dive down the rabbit hole, and see how far it goes.
In this week's show, we kinda put on the cool shades, and the long leather jackets, and apparently Phil's gonna don the sexy one-piece, here.
Phil Newton: Quite.
Sean Donahoe: Yes, indeed. We're gonna jack into the markets, and see if we can bend some spoons along the way.
Phil Newton: Maybe we can skip the trade-and-fade part, and we'll go straight to evade everything with all the heady comments.
Sean Donahoe: Dear, me. Yes, evade, evade, evade. Erase, erase, erase.
Phil Newton: Yes We can't unhear that, now, can we? Yes, it probably goes with ... We've got our new favorite section of Trade, Fade, or Evade, where we take a quick look at the charts, and try and put into practice what we're always talking about. It's just a production-line process of trying to evaluate whether we would, or we would not get involved with said stocks that we're looking at.
Sean Donahoe: Absolutely. Here's what we're gonna rock on with, here, the main part of the show ... I was watching, as you can guess ... We're movie buffs, here. We love good movies. I was re-watching the Matrix-
Phil Newton: We even love bad movies.
Sean Donahoe: We even love bad movies, especially bad movies, funnily enough, but that ... Again, we'll leave that B-movie classics for another day. This one was an A-movie, 1999, The Matrix. There was a line in this that just resonated with me, in regards to what we do in the markets. I can't use the quote from the movie, for copyright reasons; I don't want to get into trouble, so I'm gonna read the quote.
This is Morpheus standing ... If you haven't watched the movie, kinda spoiler alert, but I'm sure you have. If you haven't, you need to go bloody watch it, because it's an awesome move ... Morpheus, kind of the mentor of this piece, is standing right in front of Neo, the main protagonist, and he's saying "After this, there is no turning back. You take the blue pill, the story ends, you wake up in your bed, and believe whatever you want to believe; you take the red pill, you stay in wonderland, and I show you how deep the rabbit hole goes."
Now, it was very ironic that it was back at the time that The Matrix was released, was when I was first getting into the stock markets, trading, and investing, and everything else. It was a very eye-opening period in my life, because I wanted to see how deep this rabbit hole went. That started a 20-bloody-year journey across multiple different methods, and interests, and disciplines and everything else-
Phil Newton: It turns out, there's no bottom to this rabbit hole.
Sean Donahoe: Apparently not, and I keep finding new rabbit holes to dive down. Like yourself, Phil, you've been doing this since-
Phil Newton: It's very easy; I'd been doing it a few years sooner; I'd got started in my mid-teens, around about '95, '94-'95-ish. It's easy to get, not distracted, but it's ... It's not a case of 'follow Alice down the rabbit hole' type of experience. There's so many rabbit holes to dive down that you can just pick one or two, and spend a lifetime of study in those rabbit holes, inside of the thing that we call trading, cause there's so many different facets to everything that we do.
Again, you can be studying one philosophy, like Dow Theory, Gann Theory, Elliott Wave theory ... They're three main, broad subjects, or methodologies, and people, particularly with Elliott Wave, and Dow Theory, and Gann Theory, people can spend a lifetime just studying those, before they even consider a trendline.
Sean Donahoe: Absolutely. It is amazing. Here's the thing: before I even realized it, I've taken the red ... Before I even realized it was a pill. We've both dived down many different avenues. You were 12 years a day-trader; I've gone down the investment route, and the business route from the C-Suite level, backwards, really understanding, and reverse-engineering businesses, their operations, how they all work.
I was working, again, at that time, in the corporate sector. Funnily enough, one of my original companies I was consulting with was State Street Bank, the guys behind S&P 500, a lot of the spiders, and everything else, the ETF spiders, should I be more correctly accurate.
Phil Newton: I had such a sheltered life. I was hand-drawing charts back then, around about the 99 level. I didn't actually have my first computer ... I was using university computers, and the online sort of free stuff that was even available back then. It was just starting to really come into fruition.
There was no charting facilities, unless you had your own computer, and your own software, which was exceptionally expensive. It was hand-drawing charts. I would sit down in front of at the old ... What's the US equivalent? Teletext and CFAX? You'd get the text updates.
Sean Donahoe: You know, I don't even know if they had that over here, to be honest. I not ever heard of that. Again, this is a British thing. It was like the pre-runner to the internet in some ways.
Phil Newton: It was like pressing the red button, and you'd get a text menu, I suppose, by today's standards, but back then, it was all text. You could get financial updates, pressing the red button, and getting the extra menu information We called that CFAX in the UK.
Listen, I would hand-draw charts. It was 20-minute delayed data, and you could just get an update of the stocks that you were following, or the indexes that you were following. I would trade futures that way, during the summer; it was really between school breaks. It was interesting times, to say the least.
Sean Donahoe: I never thought about that, but I used to watch ... I used to do the same thing, and not with the charting, but I used to watch all the financial data. That's where I would go most the time, if I was bored. I would pull up Teletext, which was, again, way, way, way pre-runner to internet in many ways.
Phil Newton: That was your poor man's real-time data, and now ...
Sean Donahoe: Yeah, it really was. It would just flick up on your television; it would be very basic text. It was a very basic interface, but it was all sorts of information that was transmitted over the television airwaves; not cable, we're talking television, raw broadcast, here. We could watch that data, and I used to watch it religiously, just to be fascinated with the moves.
Phil Newton: If the markets were moving, you were able-
Sean Donahoe: I had no idea about charting, but-
Phil Newton: You didn't get the charting. I used to sit down, again, when I was practicing the craft back then, and was looking for a quick sort of ... Trying to make sense of day-trading opportunities. I was literally doing it with 20-minute delayed data on . It was mental to think about it, but, for me, that was real-time data.
Then, the other thing was I had, call it, a dozen stocks that I would follow religiously, that I was tracking on a daily basis. I'd kind of do the end-of-day updates, basically looking for what might move tomorrow, and looking at the top 10 gainers, and the top 10 losers for the day, and seeing if there's any follow-through on them for the following day. It was interesting times; it really was interesting times.
Sean Donahoe: Yeah, at that time, I certainly really had no direct clue what I was doing, but I know it got me interested.
Phil Newton: No, neither did I. I felt like I knew what I was doing at the time, but looking back on it, I didn't know my ass from my elbow.
Sean Donahoe: Well, it's amazing, cause a lot of people are in that position right now; they've got ... Again, this is just me talking off the top of my head here, but a lot of the students we talk to, a lot of the people who have been trading for awhile, a lot of them will be the first to admit that, "I feel like I've barely scratched the surface of this. I've got something that is working for me, or I have something that I am confident about."
That's where ... It's kind of like a gravimetric well, here, to not go all science nerdy here, but it's like a gravimetric anomaly. It keeps them in that one spot, and they're very resistant to learning anything else, because they know this rabbit hole can take them way, way, way further, and outside of what is their initial comfort zone of confidence.
Phil Newton: It is an interesting thing, sticking with that red pill/blue pill scenario, I do remember about a time, and it's a story I've regaled to you before, in the past. Back in the Blockbuster Video days, I remember a sunny Sunday morning, reading Jack Schwager, on Technical Analysis, a thousand-page tome of a book, for a third or fourth time, or whatever it was.
I remember going through it, and I was having that epiphany for myself. I realized that there was such a mountain of information, and I still had that unanswered question of ... It was all about the patterns, and that's kind of what I was drawn to, but I was looking at all these indicators and tools.
Not a single book that I'd had read up to that point, and from multiple readings, ever answered the question: how do you enter into a position? It just says, "This is the pattern; this is the indicator; this is the signal, the buy signal." It doesn't say what to do with it. How do you buy? How do you get into the position? What is then the criteria to actually physically put the trade on? That was the big unanswered question.
I'm not learning anything new from the books, so I stopped reading them at that point, but at the same time, the question that dictated the journey afterwards was I need to pick one thing. It wasn't a case of I need to learn it all. It was that there's too much to know everything. I'm not gonna use all the indicators, all the tools, all the patterns, all the interpretations of each of those tools separately, cause everyone's got their own methodology behind the tool sets.
Pick one of them. I needed to figure out which of these I was going to start to study, and become, I suppose, the expert in, because, at that point, you're probably considered a generalist in the area, because you know a little bit of everything. Now, it's like, "Okay, well, I need to dig deep on one thing, and just focus on that," and for me, it was what am I most interested in, cause I was sucked down, hand-working out MACD calculations with a calculator, and it was a pain in the butt. It really was.
Sean Donahoe: I've tried that once; I gave up on that stuff right away.
Phil Newton: Don't get me wrong, it works; it produced, but it was very ... Even back then, it was time-intensive, but I just thought, "I'm not interested in the indicators." Really, what I was more drawn to was the geometric shape, the geometric patterns; how does the chart look?
I think that, for me, looking back on it, it was a great decision, an accidental decision, because it meant that I started to focus on price patterns, price behavior, price analysis, and what is essentially the behavior of crowd psychology as represented by price movements.
I think that was a good decision for me to make back then, cause by understanding price action, it then meant that I could understand all the other things that would plug into price action, because I could read not necessarily the raw data stream, cause that would be the ticker tape, but just the visual representation of the data, the charts.
Because I can read that, and interpret that, none of the other stuff maters, because everything's derived from price in the first place. I think, looking back on it, it was a good decision to make, but it was pivotal, that red pill/blue pill situation, for me.
Sean Donahoe: No, absolutely. It's kind of ironic, looking back, I couldn't imagine doing anything else. Again, it became an area of fascination to understand the workings of business.
You and I come from different ends. I came into this because of my exposure, and what I was doing in the corporate sector, and working with large Fortune 500, Fortune 50 companies, and everything else-
Phil Newton: Mine was an overheard conversation. That was my ... Prior to then, I had been interested in business. I would watch the business programs, and the lunch time business thing, and the weekly interviews, cause all that sort of thing was on in the '80s, growing up in the UK, on the BBC. They had those business-type programs. I was always fascinated with them.
I remember, to be fair ... Just another sidebar on the sidebar, but I remember watching this business program about this huge guy with red braces. He was a Lord Somebody Ding-Dong, or another, but he was a business consultant. I don't know, he was some big ding dong with a handlebar mustache, very ... I think eccentric might be the polite way of describing that he was batshit crazy.
That's another interesting thing. When you've got money, you're eccentric; when you've not got money, you're crazy. Crazy or eccentric? Both.
Sean Donahoe: I actually get called eccentric, and I actually have said that for years. I said, "It's only because I'm successful that I'm considered eccentric. If I was broke, again, I would just be considered batshit crazy."
Phil Newton: If you had panhandled in the streets. I just remember him going on ... He went to this Indian company, and he was helping an umbrella company in India basically transition. They had hundreds, if not thousands of these ... I remember it vividly, these red books, ledgers. He helped them transition from an inefficient, handwritten business system, computerizing it.
Just a crazy little thing like that, and I just had this fascination with business and how it works. I can go and track a business's performance with the stock charts. That sounds like heaven to me, because I didn't wanna sift through company reports to figure out if the company was good or not.
Again, before the epiphany that sent me down the price-action route, the decision up to that point was do I wanna read company reports? I used to send off for them, and read them if I was looking to invest. That was one of the first ... That was what you're traditionally supposed to do - go, and send off for the annual reports. You read through it, and then you decide if you wanna buy some chest.
It was do I wanna do that for the rest of my trading career, or do I wanna look at the pretty little charts, and look at the buy and sell signals, like all the textbooks was telling me to do? That seemed like a better idea. I could evaluate a company from the way the price behaved, and whether it was a good investment, or a bad investment.
I think that seemed more attractive to me, where that ... I didn't feel confident to investigate the fundamentals, the traditionally fundamental reports, cause that seemed really dry, dull, and boring. Little did I know that it was equally as interesting going down the other routes.
Sean Donahoe: It's funny, but here's the thing: a lot of people say, "Yeah, it is dull and boring, and everything else." I enjoy it. Here's the thing-
Phil Newton: I love it; I'm with you there. Sports, I hate ... I'm resisting the urge to use all sorts of profanities, but I just don't get spectator sports. I really don't get it. I truly ... I'm not a spectator-sport person, yet people love it for whatever reason. That's how I am with finance, with business, with certain other things that I'm passionate about.
You can't help the way that you're made up. Yeah, it's wonderful when you get it; it's that Matrix experience is kinda the theme that we're talking at. You're either in the Matrix or you're not. With sports, I'm certainly not in the Matrix. No, I am in the Matrix, and I don't care to see what's out there. I don't wanna be a part of it.
Sean Donahoe: I'm just wondering, does that make the SEC, and the FDC, and all these other three-letter agencies, like the Agent Smiths of The Matrix, here? The guys in the windbreakers ...
Phil Newton: Yes. That makes sense.
Sean Donahoe: Just taking that a little further ... Here's the thing, and we're talking, kind of reminiscing about how we got into this, and everything else. A lot of people probably gathered that we're very passionate about what we do, because it has become like a ... I would say not the ultimate video game, but, at the end of the day, it's something that we can
Phil Newton: -I jokingly say it's like Nintendo, yeah. That would be a bad way of trading the stock market, like it's Nintendo.
Sean Donahoe: Indeed, but, at the end of the day, it feels like we speak another language. Have you ever done this? You've tried to explain what you do, and again-
Phil Newton: I gave up very quickly.
Sean Donahoe: Yeah, I gave up with that one-
Phil Newton: I gave up ...
Sean Donahoe: I actually-
Phil Newton: What do you do? I put the jam in Jammie Dodgers. I genuinely tell people that I do something ... You're kind of okay, Sean, because you've got ... Your primary business, for many years, wasn't the stock market, but if it ever came up, I would always play it down, because, for most of my trading career, trading the stock market, or the financial markets has been my primary gig. It's like what do you tell people? "Yeah, I just mess around with computers all day." I literally keep it down, because I know the next question is gonna be "Have you got any tips?"
Sean Donahoe: Yeah, exactly, I've heard that one
Phil Newton: That is literally the next ... Without fail, that is the next question. It's like a knee-jerk ... It's like when the doctor just taps your knee, and it just automatically has that annoying reflex. It's that knee-jerk reaction.
"Oh yeah, I trade the stock market."
"Got any tips?"
Without even a heartbeat's breath in between me finishing one sentence, they're asking ... They're humping my leg for tips, and it just ... You wanna help people, and at the start, you kind of do it; you have that conversation. I suppose, in today's context, it would be, "Got any bitcoin?"
That's it. It creates more problems by telling people what you do. I mean, yes, I'd love to be able to have a conversation with someone about the markets, but as equals, rather than somebody just looking for a quick fix, and "If you buy this stock, you're gonna be an overnight millionaire."
Sean Donahoe: Done that ... Tell you a crazy-
Phil Newton: While I'm thinking about that, there's a good story about this; I'm not gonna regale it, but, again, another reason to go and spend the best $10 you will ever spend on Reminiscences of a Stock Operator, because surprisingly, these are ... The stories that we're regaling are our own experiences. They're not new
The Life and Times of Jesse Livermore, it's about the rise, and fall, and subsequent rise again of his stock-market career. He kind of made it, and lost it several times over his career, but the main- the most successful period ... Eventually, it was serialized, and published in 1933.
He talks about these types of experiences in that book, and if you read through it for yourself, you'll be nodding along ... The first time you read it, you'll be nodding along, "Yes, yes, that's happened to me. Yes, yes, yes I understand. Yes ..." It's just such a good book. I've recommended it a few times this week, which is why it's fresh at the top of my head. Yeah, it's well worth it.
Sean Donahoe: It's funny, I actually started re-reading it again. I usually read it like twice a year.
Phil Newton: Two or three times a year is my suggestion. It's well worth reading, because you learn something new everyday. It's like we're talking about turns, at the moment, and I'm reminded again that one of the things he talks about ... The way that he got into the stock market was he used to buy the first pullback after the failure to make a new low, or to sell the first rally after the failure to make a new high. That's what we might call a 1-2-3 reversal pattern, these days.
To kind of put a visualization, cause we've got no charts, here, it's like the head on a right shoulder of a head-and-shoulders pattern, and that's what he described in his book in 1933; it was about late 1920s; it was serialized prior to it's publication. That's what he's talking about. Nothing's new in the stock market, it's all price-action, price behavior. If you wanna know how to trade, read that book, it's all there. It literally is all there.
Sean Donahoe: There's a lotta great-
Phil Newton: I learnt it the hard way.
Sean Donahoe: Yes.
Phil Newton: I learnt it the hard way. The hard way the charts, before reading that book, but I think if I'd read it before, if it was one of the first things that I'd read, I don't think that I would have understood the lessons or appreciated the lessons in it, because I hadn't spent time in the trenches.
Sean Donahoe: You know, it's funny, that's why we reread it - just for clarification, folks - is because we gain new experiences everyday. I mean we've been doing this a long bloody time, and we're very, very damned good at it, but it's always nice to go back ...
Even if I pick up Reminiscences of a Stock Operator, or The Intelligent Investor, I always learn new experiences, because I connect what I've got as experience now, or a new situation that has developed that I realize, "Oh, that's what he was talking about, right there; I get it." You make those new connections.
It's always good, because it reinforces the experiences you develop. That's one of the things about being in this Matrix. I wanna throw something else out there, as well, cause one ... I had this guy I was talking with the other day, and he's getting into ... He came out of the crypto world, so, first of all, big qualifier, and he was like, "Sean, I've been doing crypto for a while. I've been trading crypto; I've been doing okay trading crypto," and he says, "I'm only buying the dips, when I'm seeing them," and of course there's been plenty of those recently.
Phil Newton: It's a one-sided market.
Sean Donahoe: Yeah, in a one-sided market ... He's actually working with a brokerage that is doing two sides; they give you that-
Phil Newton: Awesome, awesome.
Sean Donahoe: -but it's not easy. He says, "Sean ..."
Phil Newton: To be fair, you can ... It depends on the broker. You can do it with CFDs, or spread-betting, depending on where you are in the world. Like you said, maybe there's one or two that allow that facility. It's becoming more popular to be able to get long and short in the market on certain cryptos.
It's becoming viable I think is the point. Now, you can almost hear from the tone of my voice, I'm not necessarily bashing it by the way that I'm describing it. It's become an interesting gig
Sean Donahoe: Yeah. He was coming from the world where he thought he needed six screens, 12 screens; he needed to be like that scene in Swordfish, or The Matrix, where they've got all those big banks of monitors, and charts on every monitor, and every study, and everything else, and trying to feel like he was a part, and jacked into this Matrix. He says, "What's your trading rig?" I said "It's my MacBook." I said -
Phil Newton: One screen.
Sean Donahoe: I said, "Yes, it's one screen; it's my MacBook, or my iPad, or my iPhone, and my cellphone. That's it."
Phil Newton: I can do it on my cellphone ... If I'm really stretched, I can do certain trading on my cellphone. I can't do the scans, because I've not got that set up, but as long as I've got my short list for the day, I can do all the trading I need on my mobile phone.
Sean Donahoe: Yeah, and that's exactly-
Phil Newton: I would prefer not to, in fairness, cause it's frustrating, but, yeah, I know what you mean. It's funny, I completely forgot, but you jogged my memory ... Monday, I got a phone call of someone - okay, interpret that as a student - and he said,
"How many monitors should I buy?"
He said, "I'm buying a new computer rig," and he was in the shop, literally in the shop.
He said, "How many monitors have you got, Phil?" He said, "How many monitors should I buy?"
I'm like, "One ... You're gonna need at least one."
He said, "But, yeah, how many should I buy?"
I said, "You only need one.
I said, "To be fair, I've got two. I've got one for kind of chancy stuff, and then I've got one for doing other stuff, so I can have it in my line of sight, but I don't really need that; that's a luxury."
If you wanna be flashed , but you don't need all the panels of monitors. You don't need them. It literally is a luxury. Here's the thing, I had them, I literally had ... I think you had them at some point ... I had a bank of monitors.
Sean Donahoe: I actually have a bank of three monitors, but that's because I'm developing, or I'm working with multiple businesses, and I have multiple screens up for my businesses, not for my trading. I have my trading up on one screen, and one screen only.
Phil Newton: Yeah, that's the thing. I had them for the trading; I had a bank of monitor. I was like, "Yeah, I'll do this, and I'll get another one, I'll do that," but you know what? I would only ever look at one monitor at a time, Sean What I found myself more, and more doing was just looking at the one monitor.
Yeah I've got all the others, and all the other charts look very nice and pretty, but I would just look at one. Even more so, I would end up just looking at one chart on that one monitor at any one time. There's a lesson here: you can only do one thing at a time. It's great to have all these things in line of sight, but
Sean Donahoe: It may make you feel like you need it, but it really doesn't make any damned difference, at the end of the day. It over-complicates things a lot. I actually tried thinking this was the way I needed to trade, many, many years ago. I had multiple monitors; I had every ...
I went down the indicator rabbit hole, because I was developing indicators, and studies, and strategies, and everything else, and I would have like one chart on a bank of six monitors, which I did have at one stage, because I thought this was the way I needed to trade. I needed to be really jacked into this Matrix
I had six monitors, and I had the whole ... It was all angled, and curved down to me, wherever I was sitting in my gaming chair, and I felt like, "Okay, I'm really jacked in now ..." Then, all of the information that I was trying to gather started contradicting each other, and it made me unable to really make real decisions, because it was information overload, and it became a distraction.
Phil Newton: That was my realization, yeah. What I started doing was removing them, and they became redundant, and I just ... You would tie , and then you'd unplug ... I just wouldn't replace them, if they were inefficient, and not working.
It was exactly that experience, Sean; same as you, it was actually making me a worse trader, not a better trader, having all of that in my line of sight. That's when I started trading off the ... It's trading off the spreadsheet, as we keep referring to it, but it's basically the watch list.
You can set up the tools, and the indicators, and the scans that we would do visually. We can have all those little indications. You just get this little pop-up, this little bing: "Okay, this is the chart that you need to look at now," and you don't need to look at any of the other charts until you get that bing - the little pop-up, the little indication, the little qualifier.
You don't have to look at all those charts, all of the time, all the day, which is the realization that we both came to, and we go there separate routes. There's a better way of doing it: just get the indication that you're looking for, have it bing - give you a little pop-up, little push notification on your computer - and then, you can go look at the charts. It just means that you can go, and do other things. It really is an eye-opener.
The thing for me was when I was trading currencies, we used to do these live trading rooms, and for a couple of years, we would trade off the higher time frames, initially, before we got a little more active. The markets allowed us to trade at more regular ... The market volatility ...
One of the set-ups we were looking for was based off four-hour charts, so we only needed to check the charts every four hours. That's what we did, so, with this one particular set-up: check, check, check, here's all the charts that we wanna trade, all the instruments that we wanna trade, and currencies.
While there's lots of currencies, there's not that many that are worth trading; in real currency, not cryptocurrency, but it's the same thing there. There's only a few that are worth trading,; there's not that many worth looking at.
We'd go and look at it, and every four hours, it was we've got a new piece of information. Has the set-up developed? No. Right, okay, well, let's come back in four hours. We've got four hours to go and do something.
When you start thinking about that way of trading ... We're on daily charts. Nothing's set up today. I don't need to stare at the charts all day, waiting for tomorrow, because the next new piece of information is tomorrow. That frees up my whole day to go and do other things.
Another reason why we're on the daily charts, and even if you're on the ... I'm looking at some 30-minute charts, right now. We're doing a little bit of day-trading at the moment, which is, again, the conditions. It'd just be rude to not do a little bit of day-trading at the moment.
I am spending a little bit more time ... I'm on the 30-, and 60-minute charts. Right now, the markets are open. The only time to check the chart for a set-up is on the turn of the half hour. If nothing sets up then - I don't get that little bing, that little notification to say, "Hey, this is the mechanical criteria that's set up." - then I come back in 30 minutes, and then I'll have the next 30-minute bar, and the first 60-minute bar that's set up.
If I don't get the bing - "The first thing that you're looking for has set up" - then I can go and do something else for that next 30 minutes, next 60 minutes. It means that it frees up my time to not look at the charts for that time period, whatever the time period that you're looking at.
Sorry I did a little bit of Mister Ranty Pants, there. Time management is the takeaway point there, relative to the time frame that you're looking at; if you don't get the setup, don't waste the time between the next new piece of information doing things that you don't need to do. If the set-up's not there right now, don't spend the next day flicking through hundreds or thousands of charts. If the set-up's not there, go and look at something else; go and do something else, more importantly.
Sean Donahoe: It comes down to simplification. Time freedom is a very important part, because it also helps you focus your mind on the things that are important. It helps you cut through all the big streaming data ... If you've seen the Matrix, you've seen all those green, weird code coming down the
Phil Newton: That's the raw data, yeah.
Sean Donahoe: It helps you filter through that, so you see the woman in the red dress, if you get that reference, that you can see-
Phil Newton: That's the pop-up message. That's what I mean by it - you get the pop-up message. The woman in the red dress has appeared. Now, I can go, and spend a little bit more time looking at the charts, because there's a woman in a red dress over there. Why wouldn't we go and look
Sean Donahoe: Fair point. Can't argue with that one.
Phil Newton: To stay with the analogy, that's what we're doing. We've got all the code in front of us, and we'll be told when the woman in the red dress appears. Bing, little alerts. Fabulous. Now, we can go look at charts. Between all that happening, you go and look at something else. Go and do something else.
Sean Donahoe: Absolutely. That's what we're looking at here. Ultimately, here it goes, it doesn't matter what you're doing ... I'd say there's two conclusions here. First of all, be your own Neo. Integrate with your own Matrix, in your own way, and be the master. Bend that data to your specific needs. Never be afraid to absolutely, but never be afraid to learn something new.
One of my favorite scenes, and I wish this existed, is where Neo sat in the chair, and they're pumping all the information into him - all the learning, all the martial arts. They're just kind of jacking it directly into his brain - all the knowledge. Unfortunately, that doesn't exist, but don't be afraid to go learn something new Go learn your own Kung-fu. Develop your own unique style that's based on you, and your needs.
Phil Newton: You just reminded me, Sean, we've got a little five-minute video of how you can speed up the data flow into the noggin; how to speed up your learning curve, when it comes to
Sean Donahoe: Yeah, someone did ask about that again, recently. If you go check out ... If you wanna come join us in that group, surround yourself with rebel traders, just like us, it's, and you can join us there.
Phil Newton: Perfect.
Sean Donahoe: That being said, let's just jump on, then, I guess, to Trade, Fade, or Evade, because I think we put a nail in the whole Matrix analogies here. I wanna dive in ... A little bit of an
Phil Newton: Agent Smith has been deleted.
Sean Donahoe: Absolutely. Kicked his ass. What we're gonna do is we're gonna look at the auto stocks. The reason being is, again, there's been ... As you know, there's been a jump in the markets this morning, as of recording. Why? Because the finger's being pointed at China easing access into their economy for U.S. companies. Again, a lot of this trade stuff is backing off They're pointing at that, but at the end of the day, it's at the range lows, right now, at the time of recording. It's off those ranges-
Phil Newton: It's at Phil's very nervous location. It's frustratingly up a day/down a day, at range lows, and that is-
Sean Donahoe: I must admit, I had a sphincter-tightening ... Again, I was looking at ... Let's see, Friday of last week, we had a nice sign of exhaustion, and all three on Monday ... No, we had that nice sign of exhaustion
Phil Newton: One day, we had the attempting break-outs, which turned around intraday, and then, it looked like it was going to rally. Then, it sold off, back to where it was on Friday. Now, we're looking at that attempted ... Personally, when we see those back-to-back hammers, dojis, or ... We've got a hammer, and a shooting star right next to each other. Over two days, that would still be like a doji with huge, elongated wicks.
Sean Donahoe: Yes. That's why I'm taking ...
Phil Newton: When that type of set-up happens, and it used to happen quite a lot on currencies - a couple times a week is what I mean by the 'on 60-minute charts. We would see that happen quite regularly. When that happens, we could usually just place a buy order, and a sell order below that range, and whichever way, it would be a proper break-out.
My experience with these types of set-ups is that the direction of the first break, in this case, down, typically dictated the real direction, when it eventually started. I don't like the fact that the downward break-out was the first direction to move. I'm not happy, cause, for me, it suggests that we might see a little bit more downward movement. It's gonna be painful if it happens. If it goes through that ...
Again, this year's lows are the line in the sand we keep talking about: 25.50 on S&P futures. It's gonna be a very painful ... It's gonna be a dark, cold winter it's not pleasant. I'm optimistically hopeful that the fact that we're still inside this very, very short-term range, over the last three or four weeks; that we're gonna see it move high.
If we see Tuesday's high broken, then I think we're gonna see that Christmas rally, which is what we were talking about in the Facebook group, and a push-up on the futures levels, too. I read about 2,800. That's what I'm looking at as the primary scenario for the moment, based on what we're looking at right now, but I am
Sean Donahoe: We're talking S&P 500, so yeah, S&P futures.
Phil Newton: S&P futures is what I'm looking at, yeah; just in case there's a discrepancy over the figures you mentioned, figures I mentioned. We're looking at the same thing, it's just different charts.
I've gotta admit, Sean, it has me ... This is one of the most frustrating times, but we're also at a frustrating level in that chart pattern for it to be doing that yo-yo price movement. I can only imagine that there's people getting literally ... Traders getting slaughtered.
Sean Donahoe: The thing is, if you look at the S&P futures, we've got a slightly lower low; very slightly, but you could argue that it's at the same level, if you look left. It's like, "Well, this isn't really a ..."
Phil Newton: On the line charts, you're absolutely spot on, but that push lower ... It's actually a high level on the close, but I know what you're saying. From the candlestick data, it has actually made that lower push.
Sean Donahoe: Yeah, and that's a concern. Now, on the Dow, it's pretty much ... Again, I'm actually gonna I'm just looking at the different speedboats. Before we get into the Trade, Fade, or Evade, kind of do a little bit of a market summary, so to speak.
Phil Newton: Market awareness. Yeah, market awareness.
Sean Donahoe: Again, I'm looking
Phil Newton: NASDAQ looks the most positive, but then it had its attempted pop at the break lower last week. It didn't really do it this week.
Sean Donahoe: Yeah, and again over to line chart. The one that's getting me is the fastest boat of all, the Russell, has officially got that lower low. The NASDAQ has got a higher low. The Dow is kind of a slightly higher low. Then, the S&P 500's kind of made that push low, but at the close, and everything else, looking at lines, it's kinda the same; it's dead even.
These are bullish signs, except for the Russell. The Russell, the fastest speedboat is showing that lower low. That concerns me, just in terms of that, but the NASDAQ, which has been leading the way
Phil Newton: We usually look at the Russell like it's a true representation of Middle America - the regular guys - cause the S&P 500, while it's the one we always talk about, it's the 500 blue chips, the big stocks. They're like the ocean liner. To stick with the analogy, they're the ocean liner trying to turn 'round in the canal; whereas, the Russell's more like a speedboat. It's a little bit more nimble, and it usually leads the way, if there is gonna be a turn. That's why we're a little bit nervous with Russell. I'm optimistically bullish, when I look at the S&P.
Sean Donahoe: Yeah. With the S&P, the Dow Jones, and the NASDAQ, they have international exposure. This whole easing of trade tensions, and seriously, at the negotiation table, while a cease-fire has been put in place, it's interesting to see.
Phil Newton: I'm looking at the Nikkei, which is already closed. It's already positively higher, so that might suggest the direction for the day. If we can just pop above yesterday's highs, I think we're gonna see a nice push high. That's gonna give that confidence booster to what could be considered the Santa Rally.
Sean Donahoe: Yeah, the interesting thing is I wanna look ... I'm just looking at the Hang Seng Futures, which is the Chinese futures, here. Again, that's been on a steady decline for the
Phil Newton: Pro tip: you can have a look at that before the markets open, and kinda get a gauge for what might happen in the U.S. markets, cause, at the moment, it seems like the Nikkei's leading the global markets.
Sean Donahoe: Yeah, that's true. That is true. Hang Seng, as well, is making higher lows, as well, which, again, suggests trade tensions, or a little bit of optimism, but they have been on a ...
Phil Newton: Surprisingly, you're gonna see the same sort of pattern. If you took the name off the chart, you might be thinking, "Yeah, this is the U.S. index futures. The patterns are the same, but it just seems that ... Well, because of the time zone, the Nikkei is, for me, just kind of dictating the direction for the U.S. markets.
Sean Donahoe: That's interesting, and certainly a valid look. One of the things they've been talking about
Phil Newton: -it's been that way for most the year. Benefits of hindsight Benefit of hindsights.
Sean Donahoe: One of the things that has been coming up, the last couple of days - I was talking about this in the Facebook group - is that China's gonna ease the path for U.S. automakers to penetrate the Chinese markets. They're gonna remove, I think it's a 30% tariff. I think it was 30%. I might be wrong. You can check my numbers on that. Again, it makes it a little more competitive for U.S. automakers to enter into the Chinese market, which is a huge market, and a growing market, year on year.
What I'm gonna do is, again, is a little bit of buoyancy for that, is our Trade, Fade, or Evade's gonna look at auto stocks, just because it's topical, and in the news. Let's start with GM-
Phil Newton: Again, I try not to look at these, before . I've been trading GM. It's been a good trader.
Sean Donahoe: I was gonna say, I think we had ... I don't know if we had an alert on that, or you and I were talking about GM the other day. I think it was actually on your day-trading thing that we were talking about. You said GM-
Phil Newton: I've gotta admit, it's been gapping up and down. It's big, which make it nice, and attractive for a couple of day-trader opportunities. It's been jumping around quite a lot, which is nice to see.
Sean Donahoe: Trade, Fade, or Evade on this one, as it stands?
Phil Newton: From a swing-trade point of view, it's gonna be, for the moment, evade a bit of a mess.
Sean Donahoe: I was looking at it. It was like, "Yeah, okay, it's at the lower end ..." It's kinda got that side of exhaustion, but, really, it's a bloody mess. I'm gonna have to ...
Phil Newton: For day-trading, it's great. I've gotta admit, if you're gonna day-trade something that's not like a Tesla - volatile, you're strapping helmets on type of experience ... If you just want something that has anywhere from 50 cents to $1.50 potential on a day-trade opportunity, this is ...
It's a $35 stock. It's affordable for most people; even smaller accounts; even with the day-trader type restrictions, if you've got really small accounts, you could trade it a couple times a week, if you just want to have something. This is a good one to keep in mind, cause, if you look at the charts, it does move quite regularly, anywhere from 50 cents to $1.50 on a single day.
Great for the day-trading opportunities. For swing-trading, which is our focus of the Trade, Fade, or Evade, leave it alone. It's a mess.
Sean Donahoe: Absolutely. Again, it's a good highlight of those time frames, and situational awareness.
Phil Newton: From a clean chart/messy chart point of view, you've got multiple days ... If you just look at the colors of the candle, multiple red candles, multiple green candles. It's a lovely, clean chart. It moves. It likes to jump around, and gap. I you wanna do a little bit of day-trading in these markets, this'd be a great one to start, if you're brand new to the idea.
Sean Donahoe: Next one for you, Ford (F).
Phil Newton: (F) ...
Sean Donahoe: This one is, again ... This is ... Yeah.
Phil Newton: It's still in the running. Still in the running. I think that the trade would've been four or five days ago, if I was gonna actually put a trade on. Break the lows. Below $8 would stand to signify a new move down, potentially, but I'd rather sell a rally on this. It's very clear down trends ... Sell the rally on the down trend, and-
Sean Donahoe: Absolutely. It's not yet ...
Phil Newton: It looks like a good one.
Sean Donahoe: It's not yet.
Phil Newton: It's not yet. If you were gonna do it, it would actually set up on the sell the rally philosophy that we're normally talking about, around about the $9.80 level, about five-six days ago. That would've been the ideal scenario.
If I'm looking for something to do, it looks great. I would want to see a rally first, and then sell the rally, in a very clear, and obvious down turn. Another lovely chart, actually. It's a very, very clean-looking chart.
Sean Donahoe: Here's the interesting thing: the financial news networks were saying that these stocks are rallying because of the good news of China. We see the two biggest, or two of the biggest automakers are not seeing any rally. I'm not seeing anything that would suggest that they're buoyant, here.
Phil Newton: Are you trying to tell me, Sean, that the talking heads are talking nonsense again?
Sean Donahoe: I may well be doing that. How unusual is that? Let's have a look at
Phil Newton: What a surprise! Trade the charts, not the news.
Sean Donahoe: Now, here's one of the ones we ... This is a regular feature in our Trade, Fade, or Evade, and it's kind of on my radar, a lot, just because, again, I've got a dog in this race, quite a lot. What we use ... Think right there, we're at the upper end of the range, here.
Phil Newton: At fade. Fade. We're at the ... Usual philosophy, we're at the upper end of a range. It actually flanked up a couple of weeks ago, and it was still the same thing. It's just pushed a little bit higher, because the upper boundary, and the lower boundary, the range is a little ... It's not an absolutely defined, "This is the level." It's more of a zone, and that's what makes it a little bit ...
This is where options is brilliant, because you can get the trade on, and you can have the timing slightly wrong, when you've got a less defined pattern on the , because this is very clearly a range. No hesitation in my mind, we're at the upper end of the range. I should be bearish, because nothing new is developing, and the same thing's probably gonna continue. That's the whole philosophy with what we do.
With an option, we can ... It's most basic, buy puts, in this case, with discretion; bearish viewpoints, and we can get the timing wrong, because what's the worst that could happen is you lose your deposit with your option, but you don't have to worry about being stopped out, in the traditional sense, if you were trading stock. You also don't need the half-day, the capsule exposure of essentially an almost a $400 stock. It's an expensive stock.
You can get them exposure, and you can not worry about the timing, and just ... As long as your viewpoint is correct, and you put enough time on the option, you'll get paid. It is a good strategy to have. That's why we're practitioners of our own philosophy , Sean.
If I was gonna do something with this, I'm bearish. It's every day, and twice on Sundays. It is, right now, nothing new is developing. It probably will continue. It's been doing the same thing for 18 months, just as I'm looking at these things?
Sean Donahoe: There, or there abouts. It is kind of interesting to see how this evolves, and has ... It's been a freaking soap opera this year ...
Phil Newton: September/October, we were bullish for the exact opposite reasons. We're at the lower end of the range, and we're bullish on Tesla, and low, and behold, a couple of false starts, as we were just talking about, because it's more of a zone, as opposed to defined points. Eventually, it went from $250 up to $360
Sean Donahoe: Which did very well for my portfolio. Yes, absolutely.
Phil Newton: Full disclosure, did I trade it? No. It didn't quite set up the exact way that I want to trade, but it meets that overall philosophy of it's at the low end of the range; it's probably gonna continue ranging, and move to the upper end of the range. If that's the limit of your skillset at the moment, then that's a great trade.
Sean Donahoe: Yeah, this one tickled one of my other strategies that I use, outside of-
Phil Newton: Yeah, to be fair, I had a lot of ... I was trading other things, in fairness. Again, I'm not gonna bullshit you, and pretend you I was on it, but it meets all that philosophy that we keep talking about, in a range. It's probably gonna continue.
Sean Donahoe: Yeah. I'm actually closing my position right now, because this one did flag up for me as a, okay, it's kind of slowing down at the top of this. Actually, it's probably enough ... A couple of weeks ago, like November, the 8th of November ... I guess it's a month ago, now. Gees, okay. Time flies.
I was starting to think, "Okay ..." I thought, you know, it's starting to slow down a little bit, and I was considering, when I was doing my big cull of my investment positions ... I thought, "You know, with this one, I wanna let it run. I think it's got ..." It had another 20 bucks, 30 bucks in it, which it's done-
Phil Newton: Long-term, Tesla's great. It's a great investment. I've gotta agree with you, there. If I was gonna invest in something from a position of someone who doesn't normally invest, I think this would be on the list. It's certainly a contender for long-term future prospects.
Sean Donahoe: On Musk, I must admit, some of the stuff that's been going on did make me bloody nervous, from that, but I actually eccentric.
Phil Newton: He's another one that might be I was just gonna say, he's another one that might be .. Yes, using the air fingers, he's eccentric, but that's what makes it good.
Sean Donahoe: I actually, I really like a lot of his vision, and what he's doing with his companies. I think he's gonna burn out, but one of the problems is ...
Phil Newton: His vision is, "Fuck it, I'm going to Mars, and you don't like it? Here ..." He's going to Mars.
Sean Donahoe: I actually just ... I'm not a fanboy, per se, but I like the vision, and it's something I can glom on to, and the success he's had-
Phil Newton: I know what you mean, though-
Sean Donahoe: -with Spacex, and honestly, a lotta success with Tesla. Talk about disrupting an industry. He's now one of the big- the biggest car company in the world, in a very short space of time, compared to GM, and Ford, who've been at it for over a hundred years. Yeah, that's no small feat. He's got a lotta people starting to nip at his toes, and everything else, in terms of the electric car-
Phil Newton: Look at it from the point of view of the other two - General Motors, and Ford - in a ... Ford, particularly, is in a downward trend, and Tesla's holding the highs. Yet, General Motors is holding the lows of its range, and Ford is in a very well-established down trend, continuing its downward movements. Tesla's at the upper end of its range. It might be losing a little bit of steam for the moment, but, hey, out of everything, it's the most buoyant ship in the dock.
Sean Donahoe: Absolutely, which again, enthralls me. That enthralls me a lot.
Phil Newton: Just from the price point of view, yeah. Just take the name out the equation for a moment, it is the most buoyant ship in the stock.
Sean Donahoe: Yeah, that's it. Let's have a look at a couple of ones that don't usually make people's radars, and there may be some reasons for it. Let's have a look at RACE. That's Ferrari-
Phil Newton: Downturn.
Sean Donahoe: Yeah, it's kind of the last
Phil Newton: To be fair, I'm just looking back It's half and half, yeah. 18 months, it's been going up. Beginning, and most of this year, it's been kinda sideways. It's just broken the range. I see the range lows ... I'm just trying to analyze it. I can't see a very clear trade here.
The range low's around about $118. It's currently around about $106. This is what we would've called something new happening, and that something new is a downward break-out of the range, and it's making low highs, low lows. It's sell the rally in a down- a newly established down trend, from my point of view. This just reinforces the ...
Sean Donahoe: The interesting thing is most recently it has had a higher low.
Phil Newton: Yeah, this just reinforces the comments that we just made on Tesla, as far as I'm concerned, and everything else in the sack that is, for the moment, looking not great. Tesla's looking fantastic
Sean Donahoe: Ironically. That's the one that gets the most
Phil Newton: Again, we come back to all the headlines. It's all negative, and, "The short sellers this, and the boo-hoo is that," and the whatever other nonsense. Because it's a headliner, it gets ... Well, it's surprising at the headlines, but it's all negative information, negative headlines. "Let's blame the short sellers." The narrative is not being confirmed by price action whatsoever. Again, just more fodder for me to ignore talking heads.
Sean Donahoe: Absolutely. Here's another one for you. (TM) Toyota Motor Operation. Again, these are ones that you don't see a lot of people talk about. These don't make the headline.
Phil Newton: Am I in danger of confirming my own bias?
Sean Donahoe: A little bit. A little bit.
Phil Newton: A little bit, a little bit, yes, but to be fair, I had ... Literally just picking random stocks. In this case, a sector. Again, this isn't a stock that I normally look at, Toyota. That-
Sean Donahoe: Yes, it's never on my radar, either.
Phil Newton: -in a range ... it's in a downward-sloping range. It's in the middle of that range
Sean Donahoe: This is one of the most gappy, spotty charts I've seen in a while.
Phil Newton: I was just gonna explain the reason. It's gappy, and spotty for a reason. It's dual-listed, isn't it, cause it's Toyota, it's on the Japanese markets.
Sean Donahoe: Yes, but this one's on the New York Stock Exchange ...
Phil Newton: It trades there-
Sean Donahoe: But, yeah-
Phil Newton: Yes, but it trades there, and then it jumps, say gaps, and jumps because of-
Sean Donahoe: -of the time zone difference.
Phil Newton: Yes. If you go to TTM, which is one I've been trading, because that's dual-listed, as well ... Tata ... Tata Motors, which is an Indian stock. Very clear, very obvious down trend; it's got a dual listing.
Again, another reason why it's gappy, as well, for the same reasons. Again, this springs to mind, because it's something I've been having a lot of fun on, day-trading-wise.
Sean Donahoe: That's funny. I've never heard of this company. Never heard of this one. That's funny. Like it.
Phil Newton: Tata ... I'm not sure ... I always like to think of Tater. Mr. Tater Motos.
Sean Donahoe: That's funny.
Phil Newton: I think it's an Indian manufacturing stock.
Sean Donahoe: That's interesting.
Phil Newton: I've probably got it wrong. I know it's dual-listing. I could be completely wrong, now I've said that.
Sean Donahoe: Next one What have we got? TM again, if you wanna ...
Phil Newton: TM, yeah. It's in a range; it's in a little range. It's kind of meh ...
Sean Donahoe: Yeah, that's kind of a meh one, I would avoid ... Just evade on that one. The next one, which is along the same kind of lines, HMC. Honda Motor Company. Again, spotty, because it's dual-listed, like you were greatly saying.
Phil Newton: I think down trend ... Look, , again, I've gotta come back to it just reinforces the viewpoint on Tesla that we were just chewing around.
It's optimistically positive. It's a good stock. It's at the upper end of its range. It's not in an up trend. It's not breaking out of that range, but it's at the upper end. It's as positive as it can be, given its current context. Whereas, in all the other stocks, they're as negative as they can be in their current context, at the lower end of their range; at the lower levels of a downward range, or a downward channel. I see what you're saying. In context, Tesla looks fantastic, just looking at the charts.
Sean Donahoe: Absolutely, no, it's comparative in ... Here's the thing: the financial news media has been bumping up how this is wonderful, all this stuff with China is now wonderful for the automotive industry, and that they're allowing all these other companies in and ... The narrative says something completely different than what's happening at the price-action end.
We're seeing everything in a big down trend, regardless. The one that's holding its own, but is volatile - don't get me wrong - like you said, is Tesla, and it's more because of the negative attention, and the pressure that's being put on Elon Musk. Now that he's stepped down as CEO, after his very infamous tweet, and he's got someone else, who's now running the ship, so to speak, now everyone's confidence is returning back into that company.
A lot of the soap-opera-ish media perception has been pushed aside. It's back on to getting at the business at hand, which is building freakin, and I've gotta admit, awesome cars. I actually took one for a test drive very recently, and I'm a V8 guy. I love my big-ass motors, and lots of horsepower-
Phil Newton: I've heard a lot of people are being converted; lots of big heads, and diesel-heads. They cockily jump in a Tesla, "Yeah, it's not gonna be as good as the big V8s." Tesla really surprises a lot of people. It's not the first time that I've heard it.
Sean Donahoe: Yeah, I got in one of their big, top-end sporty ones. I put it in insane mode, and I was literally put back in my seat so hard, I was a passenger in a rocket ship. I was very impressed. Again, it was silent.
The thing there is I love the noise of V8. All my vehicles ... If you look in my garage with all my sports cars, which again, I'm a complete bloody ear-head, everything has at least a V8, and at least 5.5 liters. I've got mostly Hemis, and everything else.
I'm a car nut, and I've got my fingers in a lot of different automotive interests, as well, because I am a car nut, and I love to race. I love to drag; go on the drag strip. I love to drift, and everything else. I do ... I look great in high heels.
Phil Newton: Sean, I misheard you a little bit. All I latched on to, Sean, was that you love drag.
Sean Donahoe: Yeah. You see, I love doing the quarter-mile in high heels. That's what it is.
Phil Newton: There is nothing so fabulous as doing a quarter-mile run in high heels.
Sean Donahoe: There you go. I got in one of these damned vehicles; I must admit, I was thoroughly impressed. Thoroughly, thoroughly impressed. I haven't got one in my garage, but maybe that's the next acquisition.
Looking at this entire sector, a lot of the narrative, and this is one of the things is don't trust the narrative, look at the numbers. We've just looked at an entire sector with some of the market leaders, all over the globe, and you can see that they're all pretty much in a down trend. The one that is holding its up is Tesla, which is very interesting, considering all the downward, or the negative news that is surrounding that company. That says there's a lot of investor confidence.
Phil Newton: I think this just comes back to our favorite quote, Sean, and a beautiful place to wrap this up on, which is, "Always be prepared to change your mind with new information."
Sean Donahoe: Absolutely, and that's
Phil Newton: Keep an open mind. Make your own mind up. Have a structure with which to fill the things - will I, or won't I trade it? Just keep collecting information. Just keep making those observations, and with new information, always be ...
To be fair, a good example this week is the markets. Monday, I was bearish on a break-out with the futures - very short-term break. Tuesday, I was bullish for the exact opposite reasons. With new information, the situation had changed.
Sean Donahoe: That's it.
Phil Newton: I'm not married to that opinion
Sean Donahoe: That is a very, very valid point is it's a lack of that emotional attachment to any one thing that ...
Phil Newton: So many people keep hold of that viewpoint. "I've got a position on ... and I'm bullish. Has my viewpoint changed?" If you answer yes to that, "has that viewpoint changed?" Then you need to be out that position Simple as ... It's as simple as that.
Sean Donahoe: With that being said, that's it for this week's show. Hope you've enjoyed listening, and again, please remember this show is not free.
Phil Newton: You know what, Sean? I've had a fabulous time. I've had a fabulous time, Sean. I hope everyone else at home has.
Sean Donahoe: Absolutely. I actually really enjoyed doing this, as you can tell. We actually really enjoy ...
Phil Newton: We've had a giggle. We've had a giggle, today; even pre-show, we've had-
Sean Donahoe: Yeah, so, I wasn't gonna go there. We're not gonna talk about ... We're not gonna talk about the Hungarian-
Phil Newton: The other incident.
Sean Donahoe: -rendezvous. Yes, the Hungarian Incident, which, again, another story for another time, over a few beers.
Phil Newton: Maybe if we ever have a meet-up, we'll Maybe if we ever have a meet-up, Sean, we'll save the Hungarian Incident for closed-door conversations.
Sean Donahoe: Yes, closed-door, no recordings. Yes, indeed, because that is unique. Anyway, this show is not free. It will cost you a five-star review. Just go to, where you can subscribe, and review us on your favorite way to hear the show. It helps us reach more traders, and investors just like you.
Phil Newton: You can also connect with us in all the usual places, and some of them, even less unusual than others. If you wanna send us a postcard, you certainly can do that. If you wanna do it snail-mail, you can do it via email, rather than snail-mail.
You can contact me at [email protected]; Sean is [email protected] If you wanna get in touch with us directly, we're usually very responsive. We've already mentioned we've got the Facebook group. We're very active in there.
You can find all the details, all the links, all your ... Your favorite way to connect with us ... Please send me a message. I'm lonely. I need some communications. Send me a Christmas card, if you want; a Hanukah card, whatever you wanna do. If you wanna send hate mail, I love the occasional hate mail. We do get a giggle out of it, but nevertheless, Sean-
Sean Donahoe: We do, actually, yes-
Phil Newton: Nevertheless, what have we got coming up in next week's show, Sean? I've just opened the floodgates gonna get lots of fake, maybe even some real hate mail this week. I've just opened the floodgates.
Sean Donahoe: You have. You've opened yourself up for that one
Phil Newton: It's my own fault, Sean. When I come crying in your shoulders, later in the week, because someone's offended me ...
Sean Donahoe: That's it. I'll just call you a big, bloody snowflake, and "Get over it. Put on your big-girl panties ..." but, there you go. Anyway, next week, we are going to be talking about how to fast-track your trading success. As we're winding up the year, taking a little stint back on how you can actually make 2019 your best year for trading. We're gonna be doing that. Rock 'n' roll. We'll see you next time. Take care for now.
Phil Newton: Awesome. Bye for now.
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3 Key Takeaways From This Show

  • Always be prepared to learn more
  • The more you practice and gain experience the clearer the markets become
  • Become a Master at your own personal brand of Kung-Fu

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