Long Term Secrets To Short-Term Trading

Table 6.6 
Best TDMs for S&P 500 1982-1998 
Table 6.7 
Best TDM's for T-Bonds 1977-1998 
Monthly Road Maps 
To give you a better feel of how prices usually move during each month of the year, Figure 6.4 shows a 
daily chart that reflects how price changes on each TDM. Again, these are general outlines of what price has 
done in the past. Like road maps, price may, or may not follow the same pattern this Year and this month. 
Usually though, these price formats will be followed. Figure 6.4 charts T-Bonds for 1998; underneath the 
price activity is a line that reflects the daily movement during each month. No one should expect price to 
follow this index exactly, but, it generally follows the ups and downs. This index shown was created on data 
from the past and extended out into 1998. As you can see, the January peak came on schedule as did the May 
lows, June rally, and late July pullback. 
Is this a fluke? Could be, so let's look at another TDM road map, this time for the S&P 500, again 
created on data ending in 1996, and then look at how prices moved in 1998 (see Figure 6.5). Although not a 
perfect representation, the similarity is remarkable and some excellent "stacked deck" trading time periods 
did appear in the future as the past suggested they might. 

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The best example is the major stock market slide that started in July 1998, right on schedule, congruent 
with the TDM road map. This index is one of the tools I used to get all my stock subscribers out of the 
market in
Figure 6.4 Day T-Bonds (daily bars). Graphed by the "Navigator" 
(Genesis Financial Data Services). 
Figure 6.5 S&P 500 Index (daily bars). Graphed by the "Navigator" 
(Genesis Financial Data Services). 

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91 
June 1998. 
I do not believe the past precisely predicts the future. My view is that the past is an indication of what 
is likely to happen in the future, thus it is a general guideline, an outline or bias we can and should take 
into consideration. It is time to think about what we should be doing on this day, this month, this year. 
I am closing this chapter with an actual example from my own trading in 1998. Based on a system I 
use for trading Bonds, I was short a little over 300 contracts of Bonds where the arrows are marked on 
Figure 6.6. This was not a very good place to be short; price moved against my position to the tune of 
almost $250,000. I was emotionally fraught as my automatic dollar stop was close at hand calling for me to 
exit and take my licking at 122 22/32nds. 
Had I not known of this map or pattern I would have been stopped out. But, knowing of the pattern of 
weakness usually starting on the 12th TDM, I chose to not only raise my stop to the 122 21/3 2nd area but 
also went short on the 2/19 in hopes the TDM influence would come to play as it usually does. Fortunately, 
the market "knew what to do" and declined from that point until February 24 when my system called for 
going long. I still took a loss on