Long Term Secrets To Short-Term Trading

"them" getting "us." It is a case of dealing with unstable data. 
Fortunately though, we can make money trading as there are a few indices, patterns, and techniques that 
will make money Not always, 
One of the better of these is the powerful impact that interest rates have on stock prices. This is not a new 
conclusion. In my 1969 book, The Secret of Selecting Stocks, I discussed Will Go, and index I created back 
then to give an idea of future stock trends based on yields (yields are impacted by interest rates). 
An easier way of looking at the problem is to monitor the price of Treasury Bonds against the S&P 500.. 
Not only is it easier, but thanks to the computer we can see what, if any, relationship exists between these 
markets. 
Logic 101 
I had a great logic professor at the University of Oregon, Albury Castell. Many of you used his books in 
your logic and ethics classes. His class was the most stimulating one I took, outside my major, in four years of 
college. Looking back on it, I would also say it has been the most useful in life after college. 
Have you ever thought about how much "stuff" we teach kids, or had taught us, that we never, ever use' 
All that math, and 90 percent of us actually only use about 10 percent of it. When's the last time you squared a 
circle or cuddled up with a copy of Beowulf? Or forgot and ended a sentence with a preposition? I suspect all 
this forced feeding of education is why we are not very "street smart" and fall prey to well-argued fallacious 
arguments and have been easily misled by market gurus. 
These Words Are My Bond 
Back to Logic 101. One of the first rules of logic is that you cannot predict A with A. Yet day after day, 
we market analysts use price to predict price. Oh, we might cover it up and say we are predicting price with an 
oscillator or a moving average, or trendline. But the simple truth is we are using tools created from price to 
predict price. Dr. Castell. would flunk 90 percent of technicians. 
Here is something really wild ... the tabulation displayed in Figure 15.1 showing $141,792.50 profits 
from trading the S&P 500 was accomplished without ever once using the price of the S&P! These buy signals 
were given in a fashion that said when conditions A in data A happens then and only then buy long in data B, 
the S&P. Given the average profit per trade of $1,750, which is 2.20 times greater than the average loss and a

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drawdown of less than 13 percent of monies earned, I think it is safe to conclude that data A is highly 
predictive of data B.