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Tharp's Thoughts
Weekly Newsletter
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Feature: Blueprint for Playing a Capitulation Bottom by D.R. Barton, Jr.
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Workshops: Coming Soon, Strategies For Trading In A Sideways Market
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Tips: Enjoy Bumping Into Walls by Van K. Tharp, Ph.D.
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OUR $700 EARLY ENROLLMENT DISCOUNTS
FOR JUNE WORKSHOPS EXPIRE TODAY!
(scroll down for details)
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Blueprint for Playing a Capitulation Bottom
by D.R. Barton, Jr.
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Capitulation is the kind of panic selling that builds momentum, causing a dramatic decline in stock prices and dropping them to a "bottom." This floor is often near or below previous support levels. A bottom is a mythical place where almost everything looks cheap enough to buy. The bottom, by definition, marks a turn in the market, and is followed by a broad, sustained rally. During a "capitulative" selling period, market watchers talk incessantly about whether there is enough fear in the market. — Dictionary of Financial Terms
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True capitulation bottoms are pretty darn rare. Yet in today’s “all or nothing” swashbuckling market style, it seems that we are seeing them more and more often.
So I’d like to review three major bottoms that have happened in the past 11 months — mainly because I was intimately involved in them from a trading perspective. I also think they provide a very good overview of what happens after the selling stops - and that gives us a good roadmap for catching the next one.
Capitulation Bottom #1: Brexit Vote, June 2016
Last June, all the financial world could talk about was the Brexit vote. I don’t need to dwell on what happened — Brexit surprised most pundits and the equity markets reacted with an initial big drop. Traders could not make up their mind about whether Brexit was good or bad for global financial markets so they took until Monday to find the final bottom of the move. Here is an hourly bar chart of the Dow Futures contract:
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This indecision made the original play a little tougher to grab, but ultimately, it was very successful.
Capitulation Bottom #2: U.S. Presidential Election, November 2016
This trade had similarities to the Brexit trade: pollsters predicted poorly, the populist vote won, and most of the significant activity happened in overnight trading.
The financial markets were far more certain in their love for this election result so we got an extremely tradeable classic capitulation bottom. Here’s what it looked like on the chart for the Dow Futures again:
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This capitulation move formed a traditional “V” bottom with a retrace after the first leg up. That retracement gave an ideal entry.
This classic pattern repeated (to much less fanfare, might I add), just a few weeks ago,
Capitulation Bottom #3: Oil Finds a Mystery Bottom, May 2017
Unlike the previous two trades, this bottom happened far away from the media spotlight. Fact is — it was very easy to miss — but that’s why I always check the markets before I turn in for the night.
My bedtime routine is pretty simple. I enjoy evenings either teaching a youth group, watching TV with my lovely and talented wife, or catching up on some reading. After that, I wrap up the night by letting out our 10-pound Havanese dog named Rocky for his last bio break of the evening. As you can see, his full winter coat makes him really 8 pounds of hair and 2 pounds of dog:
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Right before I run upstairs to brush my teeth, say my prayers and tuck in for the night, I stop by my computer screens and make a quick run through of the markets. Nothing too sophisticated — I check the S&P 500 overnight trading. Then I look at the markets for Japan and China to see the first part of their trading day. Lastly I run through gold, silver and oil to see how they’re trading.
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I was right at the end of my scans on Thursday night, May 4th and I saw that oil had plummeted — more like dropped off a cliff. This 30 minute bar chart shows what the screen looked like around midnight:
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Wow! I was certain there was breaking news because price moves this big usually happen for one of several reasons —
- There is geopolitical unrest (armed hostilities, terrorist activities in the Mid-East, etc.).
- There’s big supply news like a natural disaster that would affect production or
- OPEC makes a big announcement.
I checked my normal news feeds — nothing. I went to specialty energy news sites. Zero. Twitter? Goose egg… I even zipped through trade message boards where some knowledgeable people that I know post. Lots of activity, but no news. “Nothing” had happened. Yet when I looked at the one-minute chart, the drop looked even more severe:
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Now, oil had already dropped 19% in the past three weeks BEFORE this midnight tumble. There was only one logical conclusion: in the low volume overnight trading, a collapse on zero news meant capitulation — buyers gave up and prices plummeted.
As I said earlier, capitulation bottoms are pretty unusual and trying to pick one is tough business. That’s why people say it’s like “trying to catch a falling knife”. I like to get extra confirmation before giving a green light for an intermediate bottom trade like this one in crude. Here’s how the entry decision sequence looked on the chart coming off of that bottom:
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This trade was in the green almost from the moment price broke that retracement high. Here’s how it played out:
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Capitulation bottoms display raw emotion in the market and when you find one in progress, you can usually predict their outcomes. While you would not be able to play these as every day or “bread and butter” trades, it is important to keep capitulation bottom patterns on your opportunistic radar screen.
I love hearing your thoughts and comments! Please send them 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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A couple of weeks ago I wrote an extensive article on some of the history and the evolution of my long-standing Super Trader program. If you missed The Only Program I Know of That Gives You More Freedom, Happiness for No Reason, and More Success Just by Completing It, you can still read it here.
I have about 15 available slots for 2017. However, the tuition will increase at the end of July.
If you have been on the fence about signing up for ST in 2017, there are only two screening opportunities left before the next price increase goes into effect:
The Peak 101 Workshop, June 2nd through June 4th
Oneness Awakening Workshop, July 8th through 9th.
The early enrollment discount expires today for the Peak Performance 101 workshop. If you want to submit an application at this workshop this is your last chance before the price increase.
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PEAK PERFORMANCE 101 June 2-4
Peak Performance 101 is Dr. Tharp's core psychological workshop, and his most transformative course for over 20 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. You will not only learn what makes a great trader great, but you will also discover what is holding you back. There are many ways you could be sabotaging your market experiences: overtrading, not pulling the trigger, over confidence or lack of confidence, or just making mistake after mistake. Van Tharp designed this workshop to help you break down barriers, as well as teach you specific tasks and
strategies that will improve your trading results overnight.
Workshop Objectives
Students will learn and begin to understand each of these objectives after attending Peak Performance 101:
- How great traders approach their craft and learn a daily procedure that resembles what they do.
- How you create your own experience in the market and how you are responsible for the results that you get.
- Become more aware of some of your own psychological issues that affect your performance as a trader/investor.
- Learn about expectancy, position sizing strategies and the power of big R-multiples through a simulation game. This game is also designed to help you observe your emotions in a setting in which only a small amount is at stake compared with what you will face in the market.
- Learn some of the variables that affect your emotions and how you can gain control over them.
- Learn to overcome self-sabotage through exercises done in the class.
- Students will get guidance on how to develop an ongoing program to work on themselves using the Super Trader Program as a model.
- Students will leave with a plan to make the maximum use of the workshop.
- Participants in this course will get to meet and network with some really great people who a lot in common with each other.
Peak Performance 101 is the prerequisite course for any other workshop in the Peak Series. This workshop is also a qualifying event for those interested in applying to the Super Trader Program. Peak 101 this June will be your last opportunity to attend before the Super Trader Program price increase in July.
Attend all three June workshops and get an extra $900 discount!
PEAK PERFORMANCE 202 June 6-9
Workshop Objectives
This workshop has a team of instructors who will be focused on meeting these objectives:
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- To teach you how to obtain greater control of your life and to give you a broader perspective of what is possible.
- To teach you how to create your own experiences and how you are responsible for the results that you get
- To help you use “Big I” to solve what seem like issues and keep you on course. To make you aware of some of your own psychological issues that affect your performance as a trader/investor.
- To teach you about games and the factors that affect games:
- Level of awareness
- The ability to make up rules
- Game domains
- Game rules
- To teach you your “Winning Strategy” and how - although it has been responsible for your successes - it holds you back from doing even more.
- To give you a procedure to re-invent yourself using advanced psychological principles.
- To allow you to meet and network with some really great people who have a lot in common with you.
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PEAK PERFORMANCE 204
Modeling Great Trading Through Mental Strategies June 10-12
Workshop Objectives
The material presented in this new, advanced workshop is poised to make a dramatic impact on your life. While in attendance, you will gain understanding about how you are the central character in your story, and how you really create this story, and see how you can ultimately play an active role in shaping your own life. By thoroughly exploring how each of us uses mental strategies and the sequencing of thoughts, you will have the groundwork to continue to hone your skills throughout the workshop and beyond.
Learn the Mental Secrets for Getting What You Really Want!
Attending this cutting-edge workshop can translate into real profits and successes for you. The material presented in this three-day workshop will be information you can use to improve your life and increase your effectiveness, and is not the sort of thing that you can learn anywhere else.
This workshop is likely the only one of its kind, with such unique and powerful concepts geared toward traders — all in one place! Most importantly, the material presented is also quite practical, including plenty of exercises so you can incorporate the strategies you learn right into your daily life with ease. When you leave the workshop, these important strategies will become part of you.
Advanced Mental Exploration
If you have successfully completed Peak Performance 101, you have met the primary prerequisite to attend this course. However, we want to caution you that this workshop involves advanced mental exploration. You must be open to what goes on in your mind to appreciate the depth of this workshop. We will be doing a lot of work with sub-modalities so you should also have at least a little experience working within this framework.
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Presented by Van Tharp
with co-presenter RJ Hixson
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Presented by Libby Adams and RJ HIxson
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June 10-12
Saturday-Monday
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Presented by Van Tharp
and Rebecca Price
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Reach A Higher Level of Consciousness: A Special Event With Van Tharp
How could a higher level of consciousness help a trader? Most people have had the experience of watching someone who is really great at what they do. Whether it's a sports star in the game or a masterful craftsman, there is an element of effortlessness that comes from their ability to be "in the moment." Many people have had this experience themselves, in some aspect of their lives — for a few seconds or even a few minutes. The moments may be fleeting, but you know when you've had one. It's at these times when we can recognize these people are in a high state of awareness. Participating in the Oneness Awakening Course is an extraordinary opportunity to benefit from some of the most important journeys
Dr. Tharp has taken to transform his life, and to cultivate this awareness in your day to day life.
The Oneness Awakening Weekend course has become a fundamental tool in helping Dr. Tharp accomplish his mission of transformation and ultimately help each of his clients succeed. Students who attend this two-day intensive workshop will walk away with tools to help them cultivate awareness in their life, and they will also experience an immediate and tangible shift in perception. As a result of this experience, traders can expect to naturally become more aware, positive, calm, and centered. By extension, they will also experience a shift in how they perceive the market. When a trader sees the market as it really is, rather than what they want to see, the act of trading becomes more relaxed and they
become more confident and successful. Does this sound like the type of experience you want trading to be? While this two-day course is not a technical course about trading, we have seen amazing results in the traders who experience the benefits of being more 'awake' and aware, calmer and more centered. Why? Because the person themselves are always the primary instrument, even before the technical skills of trading are engaged. Just like the athlete with impressive skills, traders can also utilize the phenomenon of tapping into their awareness to achieve premium results. Keen awareness, in turn, opens up new possibilities. Another great thing about the concepts and experiences in this course is that they have benefits that apply throughout students' lives, not just in their trading
endeavors. Time and time again, traders tell us that their trading improved after taking this course, but also their personal lives as well!
The Role of This Course and The Super Trader Program
If you are interested in applying for admittance to the Super Trader Program, this workshop is a qualifying event. The first stage of the Super Trader program is very much about working on the self, rather than working on systems or trades. Since this course focuses on your inner-growth and self-work, Dr. Tharp is willing to allow candidates to use the course in a similar manner to those that attend the Peak Performance 101 workshop, and motivated traders are able to apply to the program after attending either one. At $495, this course is also the most cost effective way to take a qualifying workshop to apply to the Super Trader Program.
If you would like to know more about this workshop, or talk with one of our staff members to see if this workshop is right for you, we invite you to call or email Rebecca Price. Rebecca is a certified Oneness Trainer. She has been teaching with Dr. Tharp for 3 years, and is enthusiastic about helping others to dive into their own transformation. Call 919-466-0043 or email [email protected].
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August 5-7
Saturday-Monday
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August 8-9
Tuesday-Wednesday
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NEW! Trading in a Sideways Market
Presented by Super Trader graduate Kim Andersson
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August 11-13
Friday-Sunday
Profit When Price Goes Nowhere: How to Successfully Trade Sideways Markets In Every Timeframe. More information on this exciting new course coming this week.
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There is a possibility Dr. Tharp will be holding workshops in Europe this fall. More to come as that develops! When we confirm that location we will release dates for Sept, Oct and Nov.
The Super Trader Summit is in December.
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Enjoy Bumping Into Walls
by Van K. Tharp
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In any endeavor in life, you have up and down periods. Dealing with the market has many such up and down periods. In order to profit from the up periods, you have to tolerate or even “enjoy” the down periods.
I’m an NLP modeler. That means if someone does something well, I can figure out the essence of what they are doing by understanding their thinking. Thus, when such a person goes from A to B easily and effortlessly, I can determine how they do it and teach that skill to other people.
One of the major problems people have in going from their current location to their desired goal is all of the walls or obstacles they continually run into each day. There is a common solution to these obstacles — make them okay. Don’t worry about getting from point A to B, just enjoy bumping into the walls.
If you’re in the market, one of biggest obstacles you’ll face is the wall of losses. It’s fairly difficult dealing with the markets if you are not willing to lose. It’s almost impossible. It’s like wanting to be alive, but always wanting to breathe in and not being willing to breathe out.
When you want to be right, you’re not dealing with the obstacles. Instead, you’re forcing things. When you want to make a profit out of today’s trade, even though it’s a big loser, then you’re not dealing with today’s obstacle. Enjoy the obstacle — embrace it — and be willing to accept it. If the market tells you it’s time to get out at a loss, then do so.
Quite often traders transmute their relationship with the market and develop a different system or put money with a professional money manager. Now, the old struggle they used to have with the market — of not accepting what the market gives them — becomes a similar struggle they have with their new system or with their new advisor. Instead of giving up on the market after a string of losses just in time to miss the really big move, they avoid their system until it is doing really well. When it is showing tremendous profits, they jump on board — only to be blown away by the market. And the same thing happens when they invest with money managers. This desire to be
“right” motivates them to jump to the top money manager when he’s hot, only to go through a big string of losses. It’s all the same thing.
If you don’t come to grips with your psychological obstacles and embrace them, you will simply find another way to repeat them. Realize that the walls occur because they are there for you to bump into. When you accept this fact and embrace it, you’ll accept bumping into walls. And strangely enough, you hardly even notice that the walls are there. The result will be a new level of success in the markets.
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About the Author: Trading coach, and author, Dr. Van K. Tharp is widely recognized for his best-selling books and his outstanding Peak Performance Home Study program - a highly regarded classic that is suitable for all levels of traders and investors. You can learn more about Van Tharp www.vantharp.com.
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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...
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800-385-4486 * 919-466-0043 * Fax 919-466-0408
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