THE POWER OF ONE
More taxes, now there is a shocker, the kid has one pitch and he just throws it over and over. A one trick pony if there ever was one. Please someone email that jerk Buffett the IRS address so he can send them the money he wants too. He apparently does not have a phone book or internet access to find them. He has sadly just become a political hack, which is a shame. I can guarantee and would bet my life, that he would find a way of sheltering his money from Barrys taxes anyway. I doubt anyone has sharper tax attorney's working for them than he does. Tax loopholes are not mandated, the law does not compell you to use them. Also, why doesn't he give his secretary a raise so she can pay lower taxes? Aah the simplest solutions are always the most elusive aren't they? There was a time in my life that I worked for a company owned by Bershire and he is a notorious cheap skate. He thinks 100k is a lot of money and at that time did not want to pay anyone more than that regardless of their title.
Today's action was fascinating to me for a reason that will surprise you. Larry Williams in his weekly video on market setups called for a coming sharp decline in stock prices based on a few of his proprietary tools he has developed. It was like clockwork, the minute the markets opened it was as if all his readers just started clicking the mouse. Keep in mind that many of his readers are significant traders, some managing large amounts of money. Larry is one of the all time great traders, and his ability to time markets is legendary and rightly so. I know him personally, and he is brilliant. I owe much of my success to things I have learned from him.
One of my challenges which is always one with anyone who has a mentor, is that nobody is right all the time, nobody. He is wrong at times, so all of his students have to learn to think and stand on their own. That is his wish, and from knowing him, I know he takes great pride in seeing people succeed with his teachings. I also know he does not want people to follow what he says blindly, and he states that publicly often. Further, he did not say to sell Sunday night!
The lesson to be learned from this is as follows. No matter how good someone is or no matter how well you know them, do not just blindly follow anything. You should always take things under advisement and make your own decisions. This is why I am at times hesitant to make stronger statements about things than I do. I do not want everyone who might think I know what I am doing to just blindly buy or sell right at the open, just because I say I think something is going to happen. I love Larry, owe a tremendous amount to him, but I would never just buy or sell anything just because he said so, and further, he would not want me to.
Please, please do your own thinking! He does not trade like that so neither should you.
This type of action also tends to mess up fills on entries, and it also often leads to exactly what happened today, a huge reversal in the price. You get an initial move that exhausted itself, then reverses. As long as you keep your stops far enough back, the bounce does not matter other than if you are death staring the screen, then it might be a bit hairy.
The next chart is that of a trade I have shown before that I am currently in, Soybean Oil. I have two potential price targets on the screen, one is a projection using Larry's target shooter, the other is a nearby low point. In the best case scenario, the lowest one should be the true target. Most of the time we don't get to these types of targets without chopping around enough to get stopped out. I have not decided which one of these I am going to use yet at press time. There is no magic answer to this, it is a judgement call. It seems when I take the nearby one, like I did in Coffee recently, the further point is reached. When I aim for the further one the markets stop at the nearby one and reverse. Murphy must have been a commodities trader to have made such a law that seems so true.
The next chart is that of the Dollar Index, a market I am looking for a short entry in. You can see what I have marked off here with my COT indicator. What would be ideal would be for us to muck around for a bit here, and have the indicator fall down into the sell zone like it did last time while it formed a right shoulder. Will it? I have no idea. However, if it does, it will be a green light special since it will line up with the weekly trend which is decidedly down. If the stock market crashes this may head straight up, but interestingly, that inverse relationship seems to have weakened a bit. Maybe both can fall together like in the good ole' days?
I am not short the indexes yet, but you can see from the top chart, that my COT indicator is now in the sell zone again, so it is time to be looking for an entry. I do not see one for tomorrow. I am sure those of you that have assorted entry techniques, might be able to find a way in before I will here. It appears to me it is going to be a few days for any of my patterns to develop here, so I may miss this one. However, I don't chase markets, if I miss a move I miss a move. I take trades on my terms when they come along, that is what works best for me.