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Tharp's Thoughts Weekly Newsletter

June 12, 2008 — Issue #376  
  
Trading Education

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Article

Do You Move Toward Your Goals or Away from What You Don’t Want? by Van K. Tharp, PhD

Coming Soon

Van Presenting in Munich, Germany This Summer!

Trading Tip

Oil and Gas – Crudely Speaking Part IV by D.R. Barton

Melita's Corner

Yesterday, NOW or Tomorrow? by Melita Hunt

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Feature

Tharp’s Thoughts

Do You Move Toward Your Goals
or Away from What You Don’t Want?

By Van K. Tharp

One of the most critical exercises in my Peak Performance Home Study Course is the value elicitation exercise in the third volume.  Tony Robbins does a very expensive workshop in Fiji on this process, but the complete instructions for doing it by yourself are in the Peak Performance Home Study Course.  However, I’ve noticed that exercise is primarily for people who move toward their goals.

People who move toward their goals, once they spend a few days doing the value elicitation exercise will find that they have a complete picture of what’s important to them.  However, people who move away from things might not be as satisfied with the results because they may have negative values such as avoiding failure or rejection or abandonment.

As a result, I’ve prepared the following test to help you out.

Before reading any further, take the test (there are only 4 questions), and write down the answers that come to you first.

1.       What are three things you look for when you buy a car?

a.       ___________________________________________  ___

b.      ___________________________________________  ___

c.      ___________________________________________  ___

2.      Why do you want your three most important goals in life? 

a.       ___________________________________________  ___

b.      ___________________________________________  ___

c.      ___________________________________________  ___

3.      Are you more likely to move toward what you want or away from what you don’t want?

__________________________________________________  ___

4.      If you were to buy a dog, what three qualities would you look for?

a.       ___________________________________________  ___

b.      ___________________________________________  ___

c.      ___________________________________________  ___

To evaluate this test, notice whether your responses tended to be positive or negative.  For positive values put a plus sign in the space next to your answers.  For negative values put a minus sign in the space next you your answer.  The illustrations below will help you decide whether your answer is positive or negative.

For example, for question 1:

    “I wanted a car that wasn’t in the shop all the time like my last clunker.”  This is a negative response.  If your reason sounds like that, put a negative sign by it.

     “I really liked the design of the car.”  This is a positive response; put a positive sign by it.

For question 2:

     “I want to be a successful trader so I don’t have a stupid boss breathing down my back.”  This is a negative response because the motivation is to get away from your boss.  Put a negative sign by any like this.

     “I want the freedom to have my own hours, do what I want, and make unlimited income.”  This is a move toward goal so put a plus sign by it.

For question 3.  

If you answered "move toward", put a plus sign by it.  If you answered "move away from", put a minus sign by it.

For question 4 notice whether you are looking for positive or negative qualities:

     "I want a dog that doesn’t shed." This is avoiding something so put down a negative sign.

     "I want a dog that’s really loyal and smart."  This is a positive quality, so put a plus sign by your answer.

Now add up your plus and minus signs.  If you have six or more plus signs, then you tend to be a "move toward" person.  If you have six or more minus signs, then you tend to be a "move away from" person.  If you are a "move toward" person, then the value elicitation exercise in the course will have the most value for you.  And I’m assuming that most traders are "move toward" people.  On the other hand, if you are a "move away from" person, then looking at what values you most want to avoid may have great benefit for you.  If that’s you, then instead of listing all the positive things you want, list all the things you most want to avoid and do the same exercise as it is in the Peak Performance Course.

In addition, you may want to explore why you are a “move away from” person.  Changing that could have a major effect on your success.  But that’s the topic of another article.

About Van Tharp: Trading coach, and author, Dr. Van K. Tharp is widely recognized for his best-selling book Trade Your Way to Financial Freedom 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 at www.iitm.com.

 

Coming Soon

Coming to Europe This Summer: Two of Van Tharp's Core Workshops 

Munich, Germany

Blue Print for Trading Success August  4-6 Germany
Peak Performance 101 August 8-10 Germany

Click here for more information, pricing and hotel information

Trading Tip

Oil and Gas – Crudely Speaking Part IV

by
D.R. Barton

 “Life is too short to drink cheap beer – so why am I consumed with thoughts about the price of oil lately?”

-- D. R. Barton, Jr, in a fit of curiosity about his recent compulsion 

Oil continues to be its mercurial self – with Friday's jump of $11 being an all-time record for a one-day move.  A few things are clear: the issue of high oil prices will not fade into the background because it affects everyone so directly.  In addition, with a national U.S. election just around the corner, the issue of high gas prices will receive added attention.

Geopolitics will continue to be the main disrupter in any technical or fundamental analysis of oil prices.  And one very cautionary note – I reported that volatility from crude oil was at all time highs last week, and they’ve jumped 20% higher from those record levels!  The 14 period average true range of crude oil futures is $5.58 per barrel as I write; playing the crude oil market will require very large stops and sizeable bankrolls.

The pressure on U.S. politicians to lower prices will continue to grow as we approach the November elections.  It doesn’t take a very big stretch to imagine that the U.S. will put extensive backroom pressure on the upcoming OPEC meeting for some price relief heading into the elections.

A Telling Comparison of Price Movements

In an effort to gain some insight into price direction, we often look at divergences.  Many technical analysts are fond of looking at momentum divergences using tools like MACD, RSI and stochastics. 

Another tool that can give us some insight is the comparison of relative price movement of different instruments.  For example, last week we looked at how both crude oil and the Euro had moved against the dollar.  From that comparison we concluded that the depreciation of the dollar as a world currency had a significant effect on crude oil prices, but that dollar depreciation was clearly not the predominant driver for the run up in crude.

Here’s another chart that gives some very interesting comparisons:

In this chart, the red line is crude oil, which is up 100% in the last 12 months.  The blue line is XLE the Energy SPDR – up 25%.  Lastly, the light green line is Exxon Mobile (XOM) – which is up only 5% in the last 12 months!

So while crude prices have soared, integrated oil companies and oil services companies have reaped very little of the benefit (at least in terms of capital appreciate or value of the business).  So this is basically a commodity leading with everything else lagging; this imbalance will eventually correct itself.  And with the stock market in its current state (long and intermediate-term bearish), the most likely way for this chart to move toward a more balanced look is for a correction in oil prices.

While there are some compelling reasons and drivers (both analytical and political) for lower oil prices, the volatility and outside influences in this market will continue to make it a difficult one to trade and an even more difficult one to predict in the long term.

Until next week…

Great Trading!

D. R.

About D.R. Barton:  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 guest on both Report on Business TV,  and WTOP News Radio in Washington, D.C., and has been a guest on Bloomberg Radio.  His articles have appeared on SmartMoney.com and Financial Advisor magazine. You may contact D.R. at  “drbarton” at “iitm.com”. 

 

Melita's Inspirational Corner

Yesterday, NOW or Tomorrow?

by
Melita Hunt

 

Since the book The Power of Now was released by Eckhart Tolle a few years ago, I hear the word “NOW” being thrown around a lot.

Many people claim to be living in the moment (or “in the now.”)  But are we really?

How many of us really spend our time focusing on what it is that we are actually doing or experiencing in any given moment? Isn’t most of our time spent thinking about the things we should have done, or planning for the future?

Well, I have noticed that at this particular juncture in my life, there is no time for me to focus on anything other than the “now.”  I must say that it is turning out to be a very sobering experience. My mind and body are a constant reminder that all that I have is right now, simply because I don’t have the energy to focus on anything else. And some of those “now” moments are turning out to be particularly unfavorable. In fact, some of them are downright painful.

I always thought that living in the “now” was filled with pleasurable moments, but the truth is it is what it is, exactly as it is. And I can accept and flow with it, or I can kick and scream about it and want it to be something different. Sometimes it’s a toss up between both.

Other words that are bandied around a lot (especially in the realm of spirituality and faith) are acceptance, forgiveness, and gratitude.  I always thought that the acceptance would be a fairly easy state of being to maintain. Until now.

It is easy to say that I “can be” or that “I am” accepting, forgiving and grateful, yet the truth is I am finding it difficult in my current circumstances to live in these states regularly and perhaps that is where the lessons lie. I want to be accepting of the situation that I am in, but I also feel a plethora of other emotions showing up as well. And I am learning to be okay with all of them, the good, the bad and the ugly.

In this very moment (“Now”), I am being given (or have created) a whole lot of reasons to not feel acceptance, forgiveness or gratitude. I have to say that it is taking a whole lot of conscious effort on my behalf to remain aware of how I am feeling…. And the key for me is not to wallow in any given state for too long.

I have had many people tell me to keep positive and, of course, it is great to have a positive attitude, but I think that it is healthy and important to feel the whole gambit of emotions, even those that are deemed unfavorable. It is okay to feel sad, disgruntled and just plain old out of sorts. Once again, I think the key is finding the center of it all and not spending too much time on one side of the fence or the other. 

So where do you spend most of your time? Are you primarily happy, or do you spend a lot of time on the sad side of the fence? Are you positive about your life, or are most days skewed towards negativity? And what exactly do you focus your day on? 

How much of your day is spent in the “now”. Are a lot of your emotions actually attached to past, present or future thoughts?

1. Stuff that should have been done.

2. Stuff that is happening right now and in the moment.

3. Stuff that relates to planning for the future and you think you should do .

All in all, there seems to be nine different possibilities. You can drive yourself crazy determining where you stand emotionally (positive, negative or neutral) in regards to the past, the present and the future. Or you can choose to just let a whole lot of it go. The past has happened, and the future is going to take care of itself.

As I said in the beginning of this piece, I am sort of stuck in the “now” at the moment and I guess that I am actually thankful for that because it gives me a whole lot less choices to think about it.

You should try it!

  

Melita Hunt is the CEO of the Van Tharp Institute. If you would like to keep up with Melita’s progress regarding her recently diagnosed lung cancer (she is a never-smoker). Please feel free to read her blog at www.myleftlung.com. You can contact Melita at mel@iitm.com

 

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