Monday, September 17, 2012


Over the weekend I pointed out the selling opportunity I saw in Soybeans, and today we were rewarded with a limit down move. I would love to think I have enough of a following where I caused this, but obviously that is not the case. My following is me, myself and I, and a small posse that is growing slowly. This is an example of what I will be calling a Swing Trade in my upcoming website. These trades will cover all the markets, and are designed to catch moves of 3 to 15 days. 

Just to walk through this one going forward, here are the next steps for me. It is really easy to get excited about a boomer first day in a trade like this, but you have to keep the emotions out of this. We may well just go straight back up from here. However, when I have a potential bigger fish on the line, I try to ride them. Since we had an across the board huge decline in the grains, some follow through should happen. The initial target for this trade is 1621 where I have the red line on the screen. Will we get there? I have no idea. What I do know is that during the course of a year, I have to catch a few big fish to really grow my account. From a short term stand point, if we were to get a couple more down days, it would probably be a good profit taking spot. At this point with a win this big, my stop is at break even. If we just bounce right back to that level, I want to be out. I do run the risk of giving back a big profit, but in case you had not noticed, there is risk in trading futures!

Readers are going to have to bear with me, you will see this market call in some of the marketing I will be doing to try and build a base of subscribers. Can you blame me? I am a understated type of person, so self marketing is not something that comes easily to me, but I have to do some now to get my web site going once it is launched. Besides, anyone who read this and took this trade certainly benefited in spades. The question now is, are we seeing the beginning of the standard September commodities sell off? It is hard to say. The HFT factor is always out there and when you see a move in the energies like today, you have to wonder some times what is behind it.

We saw a sharp break in energies that was quickly reversed almost back to the break out spot. This reminds me of a trade from last year in Heating Oil.

You can see in this instance a similar day. We were tooling along, strong up trend, no worries, then boom. We came all the way back that day to the break out point, and it looked like we might just sail back up. However, what most people missed there was the trend line had broken on that first day. That also happened today. There was a very prominent trend line that broke decisively. Once the low went the next day we knew we were in business. We don't know if the same thing will happen this time, but I wanted to point this out just because I thought it was so similar. The markets have a funny way of making the news people look bad. All the commentary about why the middle east turmoil should cause Oil prices to sky rocket, and that is the top. This is not uncommon. One of the things we have to do if focus on price action and not all this BS about what should happen and why. There are things to know that move markets, but you will not hear them on television. The people that report on these things have no clue, don't trade, and probably don't care to learn. They are paid for volume ( words ) not for accuracy. I always love the breaking reports on CNBC, they always give you a possible buy and sell scenario on every report. Isn't that the whole point? We already knew it could go up or down before we tuned in.

As to the trade in the energies, when I see a bar that wide if I am not in a trade already, I wait for the dust to settle. I may miss a big move, but this stop is just way too big for my taste. If I were short now, my stop would be above yesterday's high. If we are going down, that spot should not be seen again.


Unfortunately we are now likely going into another lengthy period with nothing new being reported. The initial distribution with what I will call the F You amount, is going to happen in two phases, one Sept 28th, and another a couple week later in October. You do not need to file a claim form. They apparently are distributing based on the last account statements. If you have not verified yours, go to the CCC website here and read the instruction on how to check your accounts.

I did so and all four of mine showed the correct balances. It is 30 to 40% of those balances depending on your classification. At this point Forex is not included. In my case that is still well into 6 figures, but we now see all the quotes from the trustee about how we are not going to get all of our money back. This tells me he is not tough which is what is required, and what helped the Madoff victims so much. They have a very tough trustee who threatened people with lawsuits all over the place, and intimidated people on the fringe into playing ball. Why this guy is not doing the same I have no idea. At the very least you would think he would go after the banks.

There has to be something unusual that went on there, but it is just one big secret. All we know is there was a Corleone payoff to a fat attorney who looks like she ate the $200 Million in Twinkies. She supposedly turned down a partner position in another firm to stay? I am calling BS on that. I would have said take it then subpoenaed her the next day. What is another few hundred bucks, they have already racked up into the millions in legal and accounting fees at this point, with all of us sitting here on a goose egg. They have not found a single dollar that has been reported, that indicates it was beyond what was reported to have been missing the day this whole thing imploded.

The biggest problem with this, and it is a common problem, is lack of communication. There could very well be decent explanations for everything that will make all of this understandable, yet we are not privy to these top secret dealings. Here is one thing I have learned, bankruptcies are designed to bilk creditors and make attorneys millionaires. I guess my decision not to become an attorney I made in my 20's was a bad one. However, I have a conscience problem. There is no way I could hear all these stories of people having their lives ruined, and be comfortable knowing I had made millions from it. Had I become an attorney, I would have quit the day OJ walked. At that time my girlfriend was an attorney at a large LA based firm. I was on the phone with here when that verdict was read, I told her if she had any guts she would quit.

I will give updates now going forward only when there are new developments, which will likely not be every day. It is time to focus solely on making money trading and not crying over what is no longer here.

I hope some of you are short the grains, and the trade keeps rolling for us.

Good Trading


Robert said...

Hi Chris
Nice call...when do you think the paid site will be up and running ?
Sure hope soon---enjoyed the talk the other day we had--


John M said...

Chris, another winner from the bond system. Just amazing.

To follow up quickly from the other day...a 1% cut for everything in the govt's budget is an idea. The thing is, some stuff really needs a bigger cut (hello, General, sir) and some actually needs more investment, and not cuts at all (I'm thinking infrastructure and education, for starters). If the 1% idea gets these lunkheads together on a way to start, great, I'm for that. But I think you have to get a little more granular and will end up saving a lot more, since the most bloated stuff will yield big savings.

Regardless, we're screwed because all of these guys are living on some other planet than us. I don't expect progress no matter who wins. In fact, from the past 30 years, I have to be more afraid of Romney. GOP presidents have run the budget deficit into the stratosphere. The world is indeed upside down.

Xiang said...

Hi Chris

Thank for all this again.

You have a potential subscriber here. Have you decide on the pricing for the swing trade and the newsletter? Would there be a time delay for people like me that stay in the GMT +8 time zone? (i stay in Singapore) Really looking forward to all this.

BTW i am pretty new in this business of futures trading. I have read most of the books from Larry Williams. ( i know that you are a student of Larry) I find that is very logical and systematic. Is very useful to me. Very fortunate for me to find your blog about a year ago.Hope to learn more from you.


Anonymous said...

Out of curiosity, how big of a following do you think you need to cause a move like the one in soybeans?

I trade in such small size liquidity has never been a concern for me. At what point (contracts, dollars) do you encounter liquidity problems?

sergio said...

Chris, in the soyabean case where would you put the target objective?

Chris Johnston said...

Robert the site should be up in a week or so, it is now on me to get the content finished and the pay pal process done

Sergio I put the target right on the chart

Xiang, all the signals will be available at the same time to everyone, due to where you live you may have to do the trades in what would be the night for you, not sure of the exact time difference. If 8 hours that is about midnight from when they will come out.

John, I think we are in complete agreement, all these guys are the same. The reaction or lack thereof by our current president to the murders was shocking to me, he did not even try to pretend to care which was really scary. If BO wins we are in serious trouble for the balance of my life in terms of his spending. If Romney wins, I don't know that he will be able to undo the damage that BO has already done anyway. Neither scenario is going to be a great fix for the mess we are in.

I was joking about moving the market with my comments, to the question about if I influenced things.