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Sunday, July 31, 2011


RECOVERY MODE




I think the charade that I have been pointing out all along about the "Recovery" has been exposed. We all knew that was BS by Barry and Co along with the liberal media so desperate to move socialism forward that they just blatantly ignore all the facts. What I never understand about ideologues is that they never see how their own views hose them. It is one thing to be dedicated to a cause, but when it ruins your life doesn't at some point it become clear you need to go down a different road? Apparently not. First it was a recovery, now that has been exposed as a lie, so they fall back on blaming W for the recession being worse than they thought. It really is insulting and also shocking that about 50 Million people are dumb enough to believe this crap. That is how many voted for this clown. There are always going to be dumb asses but 50 million of them? It is just a shocking number to me.

However, I am in Recovery mode after my single largest blunder of my career last week. The one thing that you have to do is learn from your mistakes. You have to man up and identify your weaknesses and address them. My weakness in trading is that at times I make arbitrary calls on bar patterns. Even though I know I do it, at times it still gets away from me like last week. I do admit that last weeks mistake will likely stick with me forever, it was that big of a blunder and one I will never forget. I hope it leads me on to better trading going forward. For those who think I am making a big deal out of nothing, consider this. How many times a year do you think you have the opportunity to make 50 to 100k in just a few days, not many I would venture too guess. I know there are only 3 or 4 a year in the indexes, and I just missed one. It is over now, and had I been short, I would have covered by now anyway, most likely on the large expansion bar down the other day.

I mentioned I was bullish on Bonds, and that call also proved to be correct. Now where do we go from here. Bonds are in an interesting spot in that they just closed above the whole recent range for the first time. That would be a possible trap sell pattern if it were not for the monster size of the range on Friday. It is more likely that the next trade if you are not long now, is to buy the pullback if we get one. I think we will. The above chart is that of a 90000 tick chart in the Bernanke 500. You can see there is a good bit of divergence in the Stochastic at the bottom, and this tells me we will likely bounce this week. It will probably be in sync with a resolution of the debt crisis to give in the the socialists and continue to borrow more than we spend, raises taxes, do no spending cuts ( none of what is being discussed is anything other than slowing the rate of increase there is not one single net cut out there ) and so forth. I for one am glad the Repubs are rolling over, this is going to provide short opportunities of a lifetime when the liberals ruin this country for 50 years in the next year and a half. It will be unfortunate for many, but many of those will have themselves to blame for voting these people in. You reap what you sew.

I do think the deal will lead to a short term rally, and I think it will be short if it happens at all. We now know that what I have been saying all along is true. The only real profits companies have made are the result of the low interest rates. These rates will likely stay very low for quite some time so that means corporate profits will still continue to be fine.

Readers here know I said the trend turned down in the indexes before anyone else said it did, and we are clearly now in sell any rallies that we get mode. I think we will get a bounce this week.

Here are the trades I am looking for this week

Corn shorts, or possibly other grains
Copper shorts and possibly Silver although that is not as good of a setup
Dollar longs
Energy shorts
Index shorts
Cattle longs, Hog shorts

As these trades setup more specifically, I will call them out in here the day before or possibly two days.





2 comments:

John M said...

' What I never understand about ideologues is that they never see how their own views hose them. It is one thing to be dedicated to a cause, but when it ruins your life doesn't at some point it become clear you need to go down a different road? Apparently not.'

Well, the GOP didn't learn it during the first decade of this century, so why should anyone else?

Chris Johnston said...

Clearly the way the repubs just rolled over for the dems, they have not learned a thing. I say let these socialists bring the whole thing down, and we all get rich on the short side. Why fight em, let em score?

Who is in? Let's let Barry run this thing into the ground in 60 days if he wants to, we all get short, and make millions on the way down. Give em 5 trillion I say.

On a serious note, I will not let further political comments through even when I agree with them like in this case. I am so fed up with politicians I cannot take it any more. They are all full of crap with a couple of exceptions.

I am the priveleged one who gets to make his political comments, a force of one! I make the comments when I think they are relevant to the markets. I probably take it too far at times, oh well.