Wednesday, August 01, 2012


The path back to seven figures has begun with the above day trade I made yesterday in Heating Oil. You can see the entry and exit of the trade. I actually exited in the night session on a limit order a little lower than the day session close. In referencing my post yesterday about always knowing the exit strategy before entering, here is what it was. I have been mentioning I wanted to short energies, and showed a Crude chart the other day. This plan has not changed, and that plan is to hold something quite a bit longer than just a day like this. 

The plan was in this case to take this trade and hold it if it broke big yesterday, which it appeared to be on the verge of doing, yet did not. I wanted a close under the trend line which is not drawn in here but is right about where this 18 period moving average is. If we did not get that I was going to defer to the shorter term pattern for the day trade and just take the money. To me this market is still in an uptrend, and I really want more of a rollover to take place for a short entry. Granted there is judgement in this plan, there always is with my trading other than the Bond System. My judgement in the Bond System as we have seen sucks, and I am better off just blindly following those trades. Why wouldn't I. I would wager there is not a single mechanical Bond System in the world that has made more than the $11,000 per contract this one has made in just 3 months. That would be a great year much less a great quarter.

In summary my plan was to hold this and trail it down if we got a big break and the trend appeared to be rolling over on it. This did not happen so I exited. It may well still just rollover, but you have to have a plan, follow and, and live with what it brings you. Due to the PFG wipeout, my new trading account only started with $50k, divided in half at two places, so I just had one contract. I do have a little bit more that I could put in but I don't trust anyone at the moment, so I am moving cautiously. It is pretty clear regulators don't care what happens to any of us at all, so if another scandal breaks, those traders will also be hung out to dry. Your money is not safe in Segregated Accounts, that much has been made perfectly clear. This was my first trade, so an ok start. I plan on running this way up and some day writing a book about all of this.

It does appear now that the trustee is going after JPM in the PFG case, which we had to know he would do. There are some funny things that went on here with the Segregated Funds, and it all started at JPM. As we know they are protected by the government, and the government wants traders to take these hits, so I doubt anything will happen there. You may think that is an outrageous comment about the government, but if they did not why would they have the system set up in a way that leaves us no recourse against anyone and no back stops? The whole system is designed to hose us in the event of a problem. These guys are annoying, but they are not stupid. However, my in law who told me about this guy Bodenstein said his partners would want him on the case if it were their money at stake, so if he is tough enough you just never know. I am on board now with the anti-bank sentiment. It does appear to me now that they are the culprits in this and so many other things that have happened. It has been incredible to me how quiet this story has gotten. If you have money tied up there you just have to move on, this is going to take a very long time to get any of it back.

The next chart is that of Bonds, a market I have been looking at. 

I have a possible road map drawn in here. My short term indicators have turned down here and we do have what I consider to be a short term trend break where I have the first red arrow. Ideally I would like to see us move sideways for a few days, then roll over. The one problem with this trade is that I am looking for weakness in equities, and these two markets trade inversely. It is unlikely we would get a big sell off in Bonds if stocks declined. Also, the seasonal tendency is for a rally in Bonds here, so this dog has some fleas.

Net net here, I am looking for equity weakness and energy rollovers, but we do not appear to be in a place to do those trades quite yet. Also, I am watching Bonds for a short but not sure if it is going to setup correctly or not. This has nothing to do with the Bond System. I will not be posting those trades live anymore, since there are people subscribing to them. I will review them after the fact in some cases, once the trades are closed out.

John, I think it was you that asked for a dog recap, and as always there is never a dull moment on that front.

Here is the current crew in a shot taken from upstairs since it is hard to fit them into a shot from close range. The big one standing in the middle is my youngster Vinny. In this shot he was 10 months old and 175 lbs, he is bigger now. We found out recently he had a really bad right hip, and will need a hip replacement surgery fairly soon. I am very fortunate to have taken out Trupanion insurance on him at a young age just in case something happened. This will cover 90% of the cost which his a life saver for me right now. The surgery is $7,000. I will miss a meal before my animals will, so I will always do what is best for them and just figure out a way to come up with the money. Having to only come out of pocket $700 is not a problem.

The guy on the far right is Leo, a recent rescue we brought in. We actually got him from a top breeder who was re-homing him since he was not the champ they hoped he was going to be. Unfortunately when we got him he was in terrible condition, so he was essentially a rescue. He is still at least 30 lbs underweight and we have had him for a month or so now. We have put some weight on him, but he has had an intestinal problem, so that has been another difficult situation. The day the PFG wipeout broke, I spent all night in the ER with him because we thought he had an obstruction, which is life threatening. He appears to be on a good path now. He is a wonderful guy, I am so glad we got him, and it is a crime the condition he was in especially coming from a top breeder. He is just learning to swim in the pond and chase the coyotes now, so he is getting into the swing of things.

You can see the small doggy door we have in the front doors. That is for when we have puppies, these guys can't fit through it now so it is closed. We construct a pen out front for them when they are too young to be outside alone, so they can go out, do their business, and be safe from the coyotes until they are big enough to kill them. I am very protective of them when they are young. They do obviously have the best bouncers in town, but they are not always around.

There is no way I would let a guy who is going to turn into this below be picked off by those little squirt coyotes before he became this powerhouse.

All in all the dog world is relatively stable. 

Good Trading


colin said...

Hope you make back your stake Chris, holding thumbs.

John M said...

Thanks, Chris, great to see pictures of the crew and hear more about the dogs. They're a great-looking group, I can see why the coyotes must have a heart attack when they go on patrol around the grounds.

Hope they all continue healthy and happy and that hip replacement goes smoothly.

klh said...

Oh man, you moved to Knight and now this - you are not getting lucky with brokers. I just read that IB was fined $700K by the CFTC recently as well - it is a lousy world out there!

but your intelligence in trading is phenomenal and should be enough to stave the pain! good luck!!!

on Knight