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Friday, September 30, 2011


SPEAK OF THE DEVIL



All of us should thank the good lord for the blessing he had given us to be free of the PPT for so long. They re-appeared yesterday out of the blue in the last hour. These are pretty easy to spot and obvious even for those who do not understand what they do. I will get to that in a moment. The above picture is just a screen shot of the stock shorts I have on. I have covered the sizes because I do not want people getting the wrong impression. I do throw out dollar amounts in trades here from time to time, just to give people a general sense of the size I trade. However, bragging about money is obnoxious and I will not engage in that. In general I trade anywhere from 300 to 1000 shares at a time in stocks, and like to put several of them on at once, spreading my risk out a bit.

One trade that was a complete home run was TIF. If you click on the chart it should enlarge and you can see that I exited that trade yesterday with the huge windfall. I was a bit lucky in that I got out at 62.01 very close to the low. Whenever I see a large expansion bar like that I take profits or at least partial amounts out. In this case due to the choppy nature of the indexes, I decided to take the full position off. The others I will use trailing stops and targets and see what happens. I am still unsure at this point if we are going to get the last thrust down before the rally that I have been looking for, but I want to be positioned to make some money if it takes place.



Here we have a Picasso painted by the PPT yesterday. We were on the verge of falling off a cliff yesterday and low and behold out of the blue in the last hour a "surprise" rally. When you see this type of thing you can rest assured, this was the PPT at work. They chose a spot to make a stand, and chose wisely. I don't think too many people saw a big buy program coming when this happened. It fizzled overnight, so we will have to see how determined they are today to prop it up again. I sure wish they would not do this, but it is what it is, so there is nothing any of us can do about it.

I really think completely free markets without government manipulation work better in the long run, but obviously "they" do not agree. The trend is still down, so when that is the case you, have to be prepared for erratic bounces due to these folks doing this. New readers please read up on the Internet about the PPT I am not going to keep explaining this in here other than just pointing out when I think they have done something.




Here we have one of the Bond Market charts. You can see my COT indicator here has reached the buy zone, and also how well that has timed recent rallies in this market. What I am looking for here is a rally, that sets up a right shoulder sell signal. Perhaps we will just take off again, but my plan is to look for a sell after this bounce here takes place. For now it appears to be a buy, we don't know if it will become a legitimate short yet. I have been short here recently but covered that trade for some daniero thinking we were going to bounce and I would get another entry.

In summary, I am short the indexes and some individual stocks looking for a decline. I have lighter than normal positions due to how choppy things have been. I am comfortable with that regardless of what happens, this market has been very tricky over the last month and a half. The Hogs trade I mentioned the other day I did take and it became a stop out loss immediately on that big range day. Oops I thought when you write about trading you never admit to a loss? Silly me!

Good Trading

6 comments:

Anonymous said...

What do you think about live cattle and lean hogs now? They have broken out strongly to the upside.. It seems not everything is a short

Anonymous said...

Chris.

How do you deem taking over 5 positions in the same direction as spreading risk? Why not just trade an index?

2nd sounds like you got stung on a short due to ppt. So is every bad trade down to "manipulation" or something else you missed. Would be more interested in lessons ftom losing trades rather than reading some ego stroking babble.

Chris Johnston said...

Well I guess had I reversed in the Hogs that would have been the right move to have made. I did not. There is a school of thought that says a trade that loses that quickly should be reversed. I have a hard time doing that especially when I take the trade due to what I think is a weekly setup that is in place. That is still there for a sell but the short term trend on the daily is so strongly up now that there is now no trade for me in either.

Chris Johnston said...

This second question seems quite antagonistic, but perhaps I am reading into this something that is not intended.

There are 7 not 5 stocks on that chart. By taking the total percentage risk on that stock account then taking 1/7th of it per trade, I diversified the risk quite a bit. Although individual stocks tend to track the market as a whole, it is not a 100% correlation. You always have the news element for earnings or some other item that can move them more or less than the indexes.

This is what I do, I trade in the direction of the overall market trend in individual stocks, not against it. If it does not suit an individuals taste then I would suggest not doing it the same way. I discuss what I do in here.

I mentioned several times that I was short the index also, so you must have missed that. The short in the indexes was exited for a profit yesterday, so I am not sure where the stung by the PPT came from. That late day move the day before was as clear as intervention ever gets. It is not always that obvious when they decide to do something. My stop was at 1182 on my ES trade so the market never got near the stop. If you don't like the concept of the PPT that does not matter to me at all.

I cannot prove on paper that they do what I allege, but I have learned from those who can prove it. Also in reality, there is nothing we can do about this anyway. They have been doing this for many years now, just not as actively as they have been recently.

Every single losing trade is due to something I missed, the PPT is never a consideration in trading since we have no idea of knowing when they will appear. Make no mistake about this.

AS A TRADER EVERY SINGLE LOSS IS YOUR FAULT NOT SOMEONE ELSE'S.

However, trading is a probabilities game. Some trades such as the Hogs trade are legitimate trades that just don't work. I would do that trade every time. It lost so it is what it is.

If there was something about that which I had blown, I would have pointed it out. I do not see anything with it that was an obvious blunder by me. It was just a trade that lost. I suppose I read my one indicator incorrectly, but when a nice trend line breaks like that did on the fake down, I generally go with those breaks if they are in the direction I am looking.

I hope I have answered that question. It does seem as though it was more of a shot at me by someone who does not like me and was calling me a cry baby. However, if it was a legitimate question, let me know if I have answered it.

Anonymous said...

Damn good response. Silence is golden

John M said...

'Ego stroking babble' didn't sound exactly like an objective observation to me...and while I get annoyed by people who blame 'them' and 'manipulation' every time the market does something they didn't expect, I didn't see that at all in your post to start with. In fact, you never do that, period.

Some people are a tad strange, Chris. Thanks for the posts, you're a great read and I appreciate the insights.