Monday, April 04, 2011


Anonymous has left a new comment on your post ""If this guy owned a funeral parlor knowone would ...":

Hello Mr. Expert,

When are going to write up a follow up article on this post... is it going to be anytime soon? :)
First off I am not quite sure if this is a nice or mean spirited comment. I am a free believer in discussing anything and owning up to my blunders, I make my fair share as I openly admit. However, what I won't allow is advertising for auto parts companies which was the balance of this attempted comment. The comments that attempt to post links for advertising, this one had one of those at the end which I cut off, always seem to be on very old entries. Maybe there is a reason for that or maybe the search vehicles pick up certain words that best line up with the attempted links, and they happen to usually be older posts. I have no idea. However, I am thrilled if this means that you were interested enough to have read all the posts going back that far.
First of all Expert is a term assigned to someone by others. I have never considered myself to be an expert at anything. Whether or not others do I cannot say. I put out what I honestly think, so I am always prepared to own up to what I have previously said. Readers in here know how often I criticize myself, so I would assume this post is probably from a person who is a Barry supporter. Although it is almost impossible for me to see how anyone could be so especially with the interns latest round of blunders. Also, regular readers know I constantly am critical of myself and this is such an old post, so I suspect this must be a new reader.
Since my whole dialogue in here is a constant following up of what I said before, this seems a bit redundant, but let's review that post which was from August 19 of 2010 and see how accurate it was. I had to go back and pull it up because I forgot what it said since I do an entry every day except weekends. It basically predicted a stock market rally in the fall of 2010 and I was long GOLD at 1245 at the time. I stated the trend was down in stocks and to wait for it to change if you were inclined to go long. It changed about a month later in a very clear manner. That happened to be at the beginning of the fall, hmmm...Hard to imagine how now looking back I could have been any more accurate than that isn't it? I wish I had remembered I had been that accurate so I could have bragged about it.
I also took a few shots at Barry and what he was doing to adversely effect the economy. Here we are almost 7 months later and it is also pretty obvious I was dead on about that. I also took a shot at the psycho Pelosi, again another incredibly accurate comment. She was blown out of her little position and tax payer funded jet during the mid term elections, which I also predicted in that post would just result in a stalemate and that it would not slow down Barry too much. Again dead on balls accurate. We have a stalemate now to the point where a government shut down is looming. I am not sure what I should do for an encore other than put a link back to that post in August of last year to make myself look good. I am not always that accurate unfortunately, I wish I was. I sure wouldn't want to link back to a post where I predicted a GOLD top incorrectly based on the COT data!
Of course posting in a blog is like calling a radio show because the host can always hang up on you if you are getting over on him. I only do that with the advertising skits. However, it might be fun to let one of those German penis enlarger spam posts go through. I bet I would increase my readership into the millions! If I have not addressed what you were looking for please send in another comment so we can discuss it. Please do not attempt to add on at the end a link to a web site for advertising purposes or I won't post the comment. I have nothing against sharing links, but not to auto parts companies, it has to be in my industry for it to make sense for me. My views on most things are updated almost daily, so what I have said in the last week, I would have to say would be my update on things.
Now that we are on this subject, let's let me hang myself with a couple of predictions going forward and see if I can do as well as I did in the aforementioned post.
I predict the stock market is going to stay strong until at least the end of QE 2 now. The most obvious trade in history is to short this thing when QE 2 ends which is probably why that is a bad idea. A trade the world waits for is probably not going to be any good. Maybe we will roll into QE 3 as Bernanke seems to be hinting he would prefer. I think even the most naive person understands now that the stock rally has been driven by the FED. It is really their call almost exclusively as to when and where this might end. Larry Williams in his annual forecast showed a top in the June/July time frame, so I am going to stick with that even though it does seem to coincide with the most obvious trade of all time scenario just discussed. That is still a couple of months away so for now the only danger lurking is the possibility of a trap reversal at new highs. This is something we need to watch for this week since it appears we will make new yearly highs any day now. The Russell has already done so. I don't see anything in what I watch that tells me a breakout will be a trap but things can change.
Traditional indicators of fundamental activity have been rendered completely useless during this run, so it is time to go outside the box for examining things. This is why I have been working on my COT Synthetic which I have been displaying on charts. You can see the way it is currently constructed, it tends to flash buys then immediately retreat. This aspect of it I like because it does not stay pegged on the wrong side of the market for months at a time like the COT data does. However, I am still not sure I have this dialed in correctly yet. It does flash buys and sells too quickly on trend changes like you can see in the above chart. That is something I need to work on. For now I reference it but do not solely trade with it alone. We recently had another example of a sell indication that is now turning back out of the sell zone. This one I think was a decent sell signal, it did not trigger too fast during this monster rally. It never triggered an entry because no lows have been taken out. Now it is working back up and out of the sell zone.
Next on the prediction tour is the Dollar Index. I mentioned recently that we could have a trap break down and reverse versus the 2008 low and this is setup right now. The worlds most crowded trades are short here and long the metals. At some point the rules of humanity are going to prevail in both of these situations. The small investors cannot drive these markets solely forever. Of course the possibility exists albeit it slim, that the COT data is being tinkered with. The longer this goes on the more I think there is something going on there. There might be a group that is misclassified like we had with Crude Oil when it ran to $140. For now we have to accept the data for what it is, and it is basically worthless. If it were performing like it has historically we would have cratered in both Crude and Gold by now.

I think we have a buy setup for tomorrow right here in the DX. You can see in this market my COT Synthetic has been dynamite indicating insiders were selling on 3 rallies in this downtrend. They were dead on with their activity here and this is why I am trying to dial this in a little better. This is also why I have not changed this indicator yet because of situations like this where it works perfectly. Such is the life of a trader, we can never seem to have it all!

So there are two predictions, let's hope they are as good as my August 19 2010 post was.


Anonymous said...

Where is your stop on the DX trade? Ie if DX closes below the low made two days ago, will you stay long DX?

Chris Johnston said...

I would definitely be out by then. I would likely have my stop even closer than that. This is setup to go now so it should go right away if it is going