Fly Fishing the Stock Market: How to Search for, Catch, and Net the Market's Best Trades

THE WEATHER STATION

We have a saying here in Idaho: “If you don't like the weather, wait 10 minutes and it will change.” There are days on the lake or river when that cliché is absolutely true. Henry's Lake is one of the most productive float tube fly-fishing lakes in the world. Nestled beside the Continental Divide near Yellowstone National Park, it is an area where treacherous conditions can form in an instant. Each time we fish this lake, we always check the weather forecast first. In particular, it is very important to know both the direction and the speed of the wind. A north wind is notorious for bringing in violent weather. The wind speed is equally important. If it is blowing hard early in the day, we can expect it to intensify and develop into dangerous lake conditions later in the afternoon—conditions that can sometimes be life-threatening.

When we swing trade or day trade the market, it is likewise important to know if—and when—adverse market conditions are approaching. It is very important that we possess the tools that monitor and warn of this on a continued basis and in all time frames. As explained previously, the weekly, daily, and intraday forecasts do just that. But it is time-consuming to review seven different charts continually in real time. To solve this dilemma, I have combined them all into one system (Figure 7.7)—which I call the Weather Station. The cascaded charts in this workspace contain a combination of all the individual tools listed above. The shorter-term ...