Wouldn't you know ....

First off, I want to thank everyone who wrote comments on my last post. Thanks for taking the time to write something and for all the encouraging words. They are much appreciated. I have realized that there isn't quite something right with me and have made arrangements to get some help. I owe it to everyone, including myself, to do so. Who knows ... maybe a few drugs won't be so bad after all.

After this past week, I have realized a couple of things outside the obvious that have led me to where I am. First, about two months ago, I switched where I was sitting because my coach had a new student coming in. I moved to the other half of the office floor - the half my coach refers to as the "Library". Most of the traders on the side I moved to were hyper-scalpers. They have to focus intensely for short periods of time, but always have to be ready for the opportunities when they arise. The side I came from mainly has position traders (which I am). The traders need to focus but it is a much more relaxed atmosphere. The traders put on a position, put in their stops and let their systems work for them. As a result, the mood is a lot more light-hearted on this side. In fact, my coach likens it to a "good bar" - you just want to keep coming back. Well, late last week, I realized I had to change something because my performance since the switch to the "library" had been crappy. Last Tuesday, I moved back to the "good bar." And whaddya know ... three out of the last 5 days since have been my highest days in the last 3 months. I trade much more relaxed at "the bar." So, I guess you can say I returned home, and it has helped me.

Hindsight being 20/20, I suppose I am a little upset with myself for trading at the "library" for as long as I did. I realized early on that I wasn't having as much fun but I continued to stay there. In fact, I can't remember laughing once. I sat next to a guy who was a great trader, but he was so stoic that I can probably count on one hand how many times I saw him even smile. The guy was just out of college and making $3K/day on average, and it didn't look like he was having fun at all. I think I also resented the fact that he was constantly asking questions about my system and why I was trading what I was trading. Yet, whenever I asked him for "help", he was always brief and seemed disinterested in helping me. Although I tried to block it out, subconsciously, I believe it took its toll on me.

So, I am back at the "bar" - happier and performing better. The one main thing the "bar" has going for it is one trader ("patron"), in particular, who may be one of the funniest people I have ever met. The guy continuously spouts off one-liners all day that keep a smile on people's faces and the mood light. I guess humor runs in his family because his sister is actually a touring professional comedian. Anyway, I am glad I decided to switch back. I feel a lot better, and if I am not making enough money to survive, well ... at least I am getting a good laugh everyday.

So, does this mean the dream is still alive? Not quite. I have been looking for other jobs, but nothing has hit me yet. I don't think I want to go back into the software industry unless it could be with financial or trading software. I have thought about possibly going back into teaching, but having to deal with kids all day doesn't necessarily appeal to me at this point in my life. I wouldn't mind being some type of trading instructor. After all, those who can't "do", teach ... right? The only problem is I think those kind of jobs are few and far between. I have proven over several months that I can spot good trades and call them out to others who take advantage of them. I just don't want to take the risk myself. Maybe I can be entrepreneurial and setup my own daytrading chat room service or something like that. Or maybe I can do the same thing with options. Regardless, I really like the financial industry and all the challenges that it presents. I would like to continue in this field with my next job. I just don't know what I could do though.

Speaking of the industry and the market, up until this point, I have really refrained from sharing my view with where the market is headed in the immediate future. However, I think there are so many things brewing right now that spell disaster that I want to share them with those of you who may not follow these things as closely. In fact, I think sometime after the first of the year, between January and March, we could be in for some tough times downward. So, take this for what it is worth. I am not recommending anything, so decide for yourself what an appropriate action should be.

There were four events that took place last week which, after today, the market has basically shrugged off. The first event was the collapse of the dollar. This means several things. First, the US market may be up 14% this year, but to foreigners, particularly those using Euros, the market is only up a measly 5%. Those foreigners might be inclined to pull their money out of the US markets if they feel they can get a better return somewhere else. Then, you have the problem with US treasuries and bond rates. If the dollar is collapsing and foreign governments aren't getting a good return rate with US bonds, something may have to give. Basically, the dollar right now is in really bad shape and that does not bode well for the US economy.

Secondly, last week, the Institute for Supply Management (ISM) warned that the U.S. factory sector contracted in November for the first time in more than three years. This means the US economy could be softening so much that the Federal Reserve might have to cut interest rates to stimulate demand. The Fed may cut and they may not. If the Fed lowers rates again, the dollar will most likely weaken even further, and inflation will likely explode.

Third, a drop in construction spending was announced. This was the seventh month in a row and the longest on record. The housing sector was a big reason for the bull market over the past couple of years, and with a drop in spending this means fewer construction jobs, which leads to the next item.

Fourth, the number of U.S. workers applying for jobless benefits saw its biggest increase in more than a year last week, according to Labor Department. Bad news.

So, with all this staring investors in the face, why on earth did the market rise strongly today? Simple, it is the end of the year, and there are bonuses at stake for a lot of people in the financial industry (not me of course). For this reason, I really don't think the market is going to fall between now and the end of the year. But come January. look out.

I read an article last night which was written probably sometime in early October which talked about a possible recession happening the beginning of next year. Here is the link. Now, two months later and given the events listed above, things are really starting to take shape. Once again, I am not telling anyone to do anything, but if things start going south, you can say you read it here first. If not, well, I guess it will just prove to all of you and myself, that I have no idea what I am talking about and I have no business working in this industry (even if I like it so much).