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Tharp's Thoughts
Weekly Newsletter
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Feature: Markets Don’t Flop from the Top
by D. R. Barton, Jr.
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Tips: Trading a Cryptocurrency (Bitcoin)
by Gabriel Grammatidis
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Markets Don’t Flop from the Top
by D. R. Barton, Jr.
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An object in motion tends to remain in motion until acted on by an outside force.
—Simplified version of Newton’s First Law
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My Grandma Seymour was a gracious woman. A Godly and wise woman. A woman of exceptional beauty (often mistaken as my Mom’s sister, much to Mom’s chagrin…).
Above all, she was the quintessential southern matriarch. She ruled our family not so much from a position of authority (though she had that), but rather from a position of repeated wisdom and gentleness. Thus, garnering and maintaining everyone’s respect.
When I grow up, I want to be just like her.
When anyone stayed at Grandma’s house, they awakened to an essential southern breakfast feast:
Scrambled eggs. Southern biscuits and sausage gravy (or red eye gravy, if you preferred). At least three varieties of homemade jellies and jam. Homemade apple butter. Sausage patties. Tomatoes…always tomatoes. And then – the star of the show — country ham.
If you don’t know country ham, you’re missing out on one of life’s delicacies. It may be my son’s single favorite food. For the uninitiated, it’s a salt and sugar cured ham, a close cousin of prosciutto, though cut more thickly.
Here’s the reason I’m telling you about all this — this bountiful spread was every breakfast I had at Grandma’s house — ever. Even if it was just the two of us.
As I grew older and would go to see her by myself, I might have expected something different, something less expansive. But it wouldn’t matter that it was just me…I got the whole feast.
If you stayed the night with Grandma, you got the full breakfast. Period. Why expect anything else?
Which brings us to our current U.S. markets. They are grinding mercilessly up.
And markets in a slow grind up typically stay in a slow grind up for longer than people expect. Like wondering what’s for breakfast at my Grandma’s house — why expect anything different?
And yet tons of people keep expecting markets to go down. Some even calling for a crash. Let’s discuss those possibilities a bit…
Markets Will Do What They Want, but I Expect Them to Act Like They Usually Act
Let’s start with a premise that markets don’t flop from the top.
Said in less kitschy way: markets tend to make rounded tops before their biggest drops. Let’s look at three examples that most everyone will remember.
First the Dot.Com Bubble:
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Next, we had the Real Estate and Debt Bubble in 2007- 2008:
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And lastly, we had the Summer of 2011 when Standard & Poors downgraded U.S. credit in the midst of the European debt crisis:
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Today’s U.S. markets are just pounding out one incremental new all-time high after another.
This is the second longest bull market in history of U.S. equities markets. Turning that statistic into a strategy and exiting too quickly could be a costly mistake.
We have made many new highs this year. But that doesn’t mean we can’t make more. Let’s look at an interesting string of charts from LPL Financial Research:
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From that report quoting Ryan Detrick, Senior Market Strategist:
“It is important to remember that new highs tend to happen in clusters that can last decades, but in between you can have years without new highs. Recalling this can be one clue that this bull market may not be as old as many think.”
The Dow has been tracked even longer, back into the 19th century. And while this year’s 48 new all-time closing highs is a big number, that is only the eighth highest single-year total! Here’s the data:
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Lastly, the Nasdaq 100, which has made 60 new highs, is close to its record of 66 in a single year (it’s a much younger index). But the key that I take away from the next chart is how long the string of new highs persisted:
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During that 1985-2000 run-up, new highs were made in 15 out of 16 years.
Let’s get to the bottom line: Far be it for me to give any absolutes. But, for people trying to decide what to do with money right now, why fight against a market that’s actively trying to hand you money on the long side?
Many pundits and even some traders and investors I know and respect have been actively calling for a top. For years, now.
I find it much easier to swim with this slowly rising tide. Peter Lynch famously said:
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”
Staying on the right side of the market is not always easy. But when it is, keep riding the easy move up while having a plan in place to protect your capital when the inevitable big pullback comes. Just don’t pull that ripcord until an actual drop starts happening…
I always love to hear your thoughts and feedback – just send an email to drbarton “at” vantharp.com.
Great Trading,
D. R.
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About the Author: A passion for the systematic approach to the markets and lifelong love of teaching and learning have propelled D.R. Barton, Jr. to the top of the investment and trading arena. He is a regularly featured analyst on Fox Business' Varney & Co. TV show (catch him most Thursdays between 12:30 and 12:45), on Bloomberg Radio Taking Stock and MarketWatch's Money Life Show. He is also a frequent guest analyst on CNBC's Closing Bell, WTOP News Radio in Washington, D.C., and has been a guest on China Central Television - America and Canada's Business News Network. His articles have appeared on SmartMoney.com MarketWatch.com and Financial Advisor magazine. You may contact D.R. at "drbarton" at
"vantharp.com".
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Forex has evolved into a market in which individual investors can trade efficiently.
Early enrollment discount expires soon on our Forex courses in November!
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Presented by Gabriel Grammatidis
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November 10-12
Friday-Sunday
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Presented by Gabriel Grammatidis
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November 13-14
Monday-Tuesday
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Hear more about what former students have to say about our outstanding Forex courses.
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Learn to Trade Three Forex Trading Systems with an Edge
Gabriel will be teaching three robust Forex systems based on trend-following. Each system is based on similar “ingredients,” but each has a different recipe to capture a different part of the trend. Consequently, the systems are complementary to each other and together offer several trading setups nearly every day of the year.
Gabriel will spend most of the workshop teaching his trend-following systems. The first half day is spent to go over the specifics of trading the Forex market and cover such topics as:
• Why trade Forex?
• What are the advantages and drawbacks of trading Forex versus other instruments?
• What are the main market characteristics, and who are the Forex market participants?
• What methods work best in the Forex market?
• All you need to know about Forex trading sessions and the currency pairs.
• How are Forex chart characteristics different than stocks or futures?
• What do you look for in a Forex broker? What do you avoid?
• Why Forex may actually be the best market for new traders to learn trading.
• What are the trading edges that work in Forex?
Join us for this three-day workshop and leave prepared to trade the systems right away. Plus, join us for 2 days of live Forex trading so you can trade the systems live for even more hands on experience!
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NEW BONUS OFFER. For the first time Gabriel is extending a combo discount
on the workshop and live trading. Attend both for an additional $500 discount on live trading.
Special price offers:
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Start your study early. Order the Forex Home Study Course now and walk through the door with a thorough understanding of the Busted Breakout (System 1). Home study buyers get $600 off the price of the live workshop!
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Combo discount: We have never before offered a combo discount on the live portion of the Forex training. But now, for a limited time, when you register for both November events you'll get an extra $500 off on live trading. Learn More...
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Trading a cryptocurrency (Bitcoin)
by Gabriel Grammatidis
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Bitcoin as the main cryptocurrency behaves just like an “established” currency pair.
Analyzing the charts there is not much difference between trading an “established” currency and a cryptocurrency — the same patterns occur repeatedly.
This is not only true for S1 (Busted Breakout pattern), but as well for the FLB (S2) and the 3TMA (S3).
Cautionary note: Stay with the 6 Majors — all cryptos shall be traded without margin!
Watch the short 3 mintute video from Gabriel below on patterns in the Bitcoin chart
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About the Author: Gabriel Grammatidis is a successful full-time trader and graduate of the Super Trader program. He has extensive experience trading Forex and shares his knowledge at his Forex and Live Forex Trading workshops, held regularly at VTI.
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January 19-21
Friday-Sunday
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Van shares years of knowledge about wealth concepts, wealth creation modeling, being wealthy inside, and the infinite wealth processes. Attend this workshop and completely reshape your attitudes toward money, work, paychecks, income, wealth, scarcity, and abundance. Your paradigm shifts in just three days will amaze you and release you from your current beliefs about wealth that have been running in your unconscious and holding you back.
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Presented by Libby Adams and RJ HIxson
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January 23-26
Tuesday-Friday
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Immense success is possible for most traders and investors. But the secret to that success has little to do with some magical trading system. Instead, it has everything to do with you. You are the secret ingredient to your success. And when you transform yourself, you transform everything. Peak Performance 202 is a major leap forward for those of you who are willing to step out of your comfort zone.
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Presented by Van Tharp
with co-presenter RJ Hixson
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February 17-19
Saturday-Monday
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Peak Performance 101 is Dr. Tharp's core psychological workshop, and his most transformative course for over 25 years. If you want to know how great traders think, behave and act so you can achieve consistent and profitable results, without stress, then this workshop is for you.
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Presented by Van Tharp
and RJ Hixson
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February 21-23
Wednesday-Friday
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In just three days you’ll see how all of Van Tharp ’s strategic trading concepts fit into one seamless design for more predictable trading results. Your trading will never be the same.
This course illustrates the relationships among the steps so that the process is logical and reasonable. Moreover, you will learn how to take each step experientially, so you really get it. Dr. Tharp is an expert in delivering elicitation questions to bring forth each person’s most important issues.
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March 2018 - Sydney, Australia
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Presented by Van Tharp
with co-presenter RJ Hixson
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Presented by RJ Hixson
and Van Tharp
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March 13-15
Tuesday-Thursday
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March 23-25
Friday-Sunday
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NEW E-learning Course!
Forex Trading Systems: The Busted Breakout System
Click on the image below to watch a brief 1 minute video that hightlights this new course.
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Gabriel developed and refined his Busted Breakout system on the concept of trend-following while he was still enrolled in the Super Trader program.
The system has a high win rate (about 65%) and it takes advantage of a price pattern that happens again and again in the charts — breakout failures. The main advantage of this is that it benefits from running for other peoples’ stops. This is a unique edge of the system making the trade break-even early on. Watching 15-minute charts for 4-6 hours a day and trading only the biggest, most liquid currency pairs, the system finds easily more than 150 trades per year. The pattern works equally well on 5min, 60min and 240min charts so the trade opportunity per year can be much higher depending how you trade. Gabriel is confident that someone with the programming skills could turn the system into a well-performing automated trading system.
The three-day workshop cost is $3,995 but the cost of the home study program is $1,295. As a special introduction price for early responders you can get this new home study for just $995.
Plus, buy the home study now and if you decide to join us at the 3-day Forex Trading workshop in November (or for any Forex workshop in the future), you can deduct $600 off of your course payment for the workshop.
This is win-win for all! If you are among the group of clients who simply cannot come to one of our workshops this home study offers you the benefit of still gaining access to a robust and premium forex trading system. Gabriel has traded it himself in several timeframes for many years now offering a persistent edge in the market.
But, if you have already been considering attending the workshop this is a great way for you to get a full-steam head-start and walk through the workshop door already understanding the system well. You will then have the opportunity to ask Gabriel anything you need. And in addition, learn two new Forex trading systems. The three systems taught in the workshop all offer unique advantages. They complement each other giving you the opportunity to reap various stages in a trend.
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FREE Book!
We pay for the book, you just pay for shipping.
Read Van’s Latest Book —
TRADING BEYOND THE MATRIX
The Red Pill for Traders and Investors
Eleven traders tell their stories about transforming
their trading results and lives, in this 400 plus page book.
Below is a brief video on how powerful this book is to traders.
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Cary, NC Workshop Information
For a list of nearby hotels for our Cary, North Carolina locations,
click here.
Book your flight arriving to the Raleigh-Durham International Airport (RDU).
When traveling to a three-day course, it's best to arrive the evening before.
To help determine your arrival and departure times, see:
Questions? Click Here to Ask Van...
CONTACT US
This is a supplement to our subscription based newsletter, Tharp's Thoughts.
800-385-4486 * 919-466-0043 * Fax 919-466-0408
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