Wednesday, April 13, 2011


Above is our current and unfortunately closing account statement and balance in the trading contest. My partner has run into some personal issues and we are going to have to dissolve the PNJ Advisors business as a result. I am going to attempt to switch over to another contest account but I doubt they are going to let me continue on. Most likely I will have to enter mid year, alone starting from scratch. I have not decided if I want to do that or not yet but I probably will. I have nothing to lose, but let's face it I will be a long ways behind starting off. It would be a true underdog story if I were to win.

We have done ok but not great this year in this contest account. I felt it was important to show the actual account statement just for credibility purposes. You can see there was one outstanding trade still on but it was liquidated last night at the same price as it closed, so the balance is exactly the same on a closed out basis as what you see above. People can talk all they want but showing actual proof of a return is what walks the walk. Admittedly this account only started with $40,000 but you have to keep in mind most entrants start off with less since it is a percentage return contest, not gross dollars won. We chose a moderate amount to try and have enough to do what we wanted but not so much as to hamper the return percentage. So there you have it, up 22% January through April 12th.

Since PNJ is formed in another state, and I do not reside in that state, I cannot just carry on with it as is even if I were to buy out my partner. As a result, we are just splitting this in half and shutting it down. California is so onerous with it's regulations, that I doubt I will form a business here so if I re-enter it will likely be as an individual. I will let readers know what I do in this regard. I wanted to make sure everyone did not think we lost all our money when our name disappeared from the leader board all of the sudden. This is of course the second year in a row I have been involved in a mid year withdrawal which is really a bummer. Last year I told everyone about the software problem I had with Genesis that caused me so many problems entering orders that I had to close some of my accounts. That was a fluke, and I was having a decent year as I told everyone at the time I had to withdraw. Now this year I have this happen, which came upon me fast. We tried to explore alternative solutions to avoid having to do this, but there are just not any we or our attorneys could come up with.

I guess net net with the two consecutive years with problems, I have basically proven I can make between 20% and 35% in the first quarter every time! Most people can't do that in a year. Anyway, enough on that and time to move forward. Maybe I should call me new company First Quarter Trading Advisors!

I showed everyone my Bernanke 100 short and it was stopped out last night for a measely 6.25 point gain. The chart is below.

You can see that once we had that day yesterday where we appeared to be breaking down, I tightened up the stop on this and got picked off last night. No regrets, I followed my rules and will look for the next trade. It does appear to me from what I am currently looking at that if we were to close here, I will short this again below the low today tomorrow. Of course alot can change between now and the close, but if the range were to remain the same and we closed up for today, that is likely what I will do. I know there are a couple of you that are going to want to ask about why I did what I did with the stop. I can just tell you this, stops are a judgement call, there are not absolute etched in stone rules that I follow. I try to keep them back as much as I can, and at times I tighten them as in this instance. I will say this, in this instance I would always have tightened this stop down to where I did. This should have gone right from here if it was going.  If it breaks down again, I will short it again.

Here is another trade I have going right now, Soybeans.

You can see I shorted this Monday night. It traded through the prior day's low then bounced and I got it on a limit a few cents better than the real entry level. This is why the arrow is above the low and not at it. As with any other trade, I have no idea if this is any good or not. It has been good for one day so far, but many trades like this with how volatile things have been, have reversed the next day so who knows what will happen here. I do not have my stop displayed because I am going to keep that to myself. I don't want too many people knowing where they are just in case some wise ass wants to gun for them. I doubt that would happen but you never know.

Here is one market on my wish list, Crude Oil. I have drawn in where I hope price moves to in order to give an entry on the short side. I see this at the moment as having broken the short term uptrend, and now I am looking for a bounce to sell. It may not happen, but if we do trade up for a day or two from here, I will be looking. It does not appear my indicator here will be on board by then in the sell zone, but that is not an absolute at all for me at this point as I have explained in here repeatedly.

That huge day at the top is ominous to me until it gets taken out. When you look back at charts you often see major highs have a bar like that.

On a separate note, I read something interesting this morning that makes me realize everyone has a take on things. I read some Gold bugs talking about how they now have proof that there is a conspiracy by the government to keep the price of Gold down!!!!  I would imagine they think it should be $10,000 an ounce? That is by far one of the stupidest things I have ever heard. I actually think if there is any manipulation it is going on in the opposite direction as a bubble they are inflating for people to place their money. In all seriousness, I also doubt that, but if I had to bet on one side or the other if there were a conspiracy, it is up not down. These people cite the reports that the government is reporting they are selling Gold. If you look at the COT reports, it is a fact that the largest players are selling gold hand over fist. That is actually a fact, not a bogus statement.

The only way this could be true would be if the COT reports have data that is inaccurate. I have brought this up before as one possible explanation as to why the COT has been so far off in predicting correctly where Gold prices are going. We are just never going to know this, but to suggest that there is a conspiracy to keep the price down on something that has had the highest percentage increase in it's history is just insulting. They are just trying to further their agenda. Whether we go up or down in this market means nothing to me, but this theory is just a furthering of a lie to make money.

I bet these same people thought there was a move to keep pet rock prices down or Mazda Miata prices in check when they zoomed way up. These of course where rampant speculative runs in things that imploded. I would also speculate that they owned pet rocks and Miatas at the highs and got their ass kicked when the prices rolled over.

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