Friday, October 05, 2012


I have been telling people for the last few months that no matter what the real data was the unemployment rate would be reported under 8% before the election. We know that history shows no sitting president has been re-elected with a rate at 8% or higher. As a result there was no doubt in my mind that this month they would report it to be under 8%, viola 7.8%. My thinking is it was probably going to be 7.9% until that ass kicking BO got in the debate the other night took place. They then realized it might look more suspicious to make it 7.9% so they moved it another .10.

This is so incredibly obvious and disgusting. The arrogance of these people to think that they can do this type of thing is beyond anything I ever thought I would see from our government. Sometimes I would prefer not to be right about things like this. Now they can change the narrative. They are so intent upon completely changing this country regardless of what any of us think it is really almost like watching a movie. This can't be happening! If it were true it would be nice but anyone who is not biased in either direction can see right through all of this. Perhaps this blatant lie will work against them you never know. Sometimes when people are doing things they should not be doing they do not know when to stop and take things too far. This results in them getting caught. Here was the dialogue that undoubtedly went on somewhere. Boy that debate did not go too well, let's show them move that number down to 7.8%. However make no mistake, the plan was to gradually move this number down to this level for the last year. I think the last .10 was created by the debate.

Aside from my rant here which I know annoys some readers, the markets are doing what I have been talking about. They have rallied off this most recent decline. I showed the VIX signal the other day and it has worked very well. For those who did not see that here it is again.

This is from the 10/2 post. You can see that the VIX can be very useful for picking swings in the stock market. What would be nice for us would be that if at the end of November we were down into the lower bands. That is the time frame the weird Euro cycle predictor says to look for a top. For now it is stay long. Sometimes there is nothing to do but just stay with what you have. If you are long stay long.

The above chart is that of the Swiss Franc. We do have a COT setup on the sell side here that is pretty clear. We also have the typical up trend in price that is normally there when a sell signal sets up. The way I see this is no shorts should be done until we break the trend line I have drawn in here. For all we know this could soar and it will be the typical COT scenario where they fade the move for months until it ultimately turns. I always say using COT is an art not a science.


It appears the latest here is there is now a bulk transfer that has been approved to Vision Financial. There was a twitt from the CCC to this effect yesterday. I have not confirmed this yet at press time. If this were true it is possible it could be a small amount of good news. The twitt indicated within 11 days accounts of all sizes will be moved. The battle over Forex continues. For those with Forex at stake you might want to read up about MF Global and how it was handled there. I do not know I do not trade FOREX due to the unregulated nature of it. It is this exact scenario I always feared. Since MF seg people have most of their money back it might be a good precedent to look at to see if the forex people are still waiting or have gotten some of their money.

I have no idea, I just read the law on this which led me to the prior comments I have made here. As we all know a judge can do anything at any time whether or not it is legal or not. When things go to court you never know what will happen.


Apparently last night not everyone got the first email I sent regarding one of the trades we were in. I forward these to myself to make sure they go out and I got the confirmation on my end so I don't know what happened. Thanks to a few of you who pointed out they did not get the first email. For those who got the second one you benefited in getting a better exit price in the one trade. We are tracking the results based on the original even though it would enhance them some using the second one. I think everyone knows I don't operate like that. We are switching to AWEBER to make things better in this regard.

Bond System - make sure you follow the rules exactly as I state them. There was a great short trade yesterday that a few of you messed up the order on. If there are any questions please contact me, you don't want to miss one like that.

Swing Trades - we have made a little bit of money this week but got stopped out on our trailing stop trying to catch a bigger move in one trade. This is clearly explained in my web site. When trying to catch larger moves you have to be willing to give back some open profits and it does happen. We were long Coffee and looking good, then...... One other note. This is a discretionary approach. There are going to be times when conditions change and we react to them. If we see something that changes the outlook for a trade we have on that we are trying to catch a larger move in, we are going to get out. This will not happen often but it will happen. For better or worse the results in the services are something I will have to own and they will be what I am measured by. As a result I give them my best. If something I use to trade with tells me to get out of something we are getting out.

You can see that decision was the correct one based on today's action and it was also correct when I did this in bonds recently.

If there is any doubt about any email I send please contact me immediately. I monitor emails constantly.

Let's look forward to getting the PFG dough and moving forward with it with good trading.


MBAGearhead said...

The employment number is fake? Did you know that the commissioner of the Bureau of Labor Statistics, John Gavin, is a Bush appointee and a career BLS economist.

Chris Johnston said...

The government has been doctoring these numbers for years, it has just reached a new low now. Study all the details including the revisions of the prior months, you will see that a lot of things do not add up. I mentioned in here many months ago that right before the election the rate would be just under 8% how do you think I knew that so far in advance? I knew it because I knew the magic historical number was 8%. Make no mistake, if the tides were reversed and the other party was in control the same thing would be happening. This is not partisan both sides do this stuff. They create new ways of "measuring" things to back their way into the number they want. The CPI is another one they mess around with.

MBAGearhead said...

I guess I'm much less of a conspiracy theorist than you! And don't care enough to study the numbers. I have charts to study after all!

Chris Johnston said...

trust me it is not conspiracy I learned of this from someone "in the know" so to speak many years ago.

It is just idle chat anyway because we can't do anything about it and it has nothing to do with how we trade.

Anonymous said...

Hi Chris,

I have noticed that the nasdaq (NQ) and the russell (TF) have lagged the S&P500 (ES) quite a bit this week. On a weekly chart the ES looks strong and it would be a hard case to short it here. But the NQ and TF look quite a bit weaker to the point that you could make a fair argument short them. It would be nice if you could reflect upon your experience and let us know how you interpret these discrepancies.


Steve in SF

Chris Johnston said...


You are correct and that is something that does matter. The Naz tends to lead as it has been doing, when it shifts to being the laggard that is a negative sign. If you do any shorting you should short the weakest market in a complex or buy the strongest one. This is a good example of that.


I let your comment through but it has not shown up yet. There is an address for the PFG claim forms right in claims form section of the www.pfgchapter7.com web site. It is Rust Omni in California.

Robert said...

i think you will enjoy this--and MBA you must be living on Mars if you don't think they manipulate just about everything

This just in:

ABC is reporting that the White House has told defense contractors to not issue layoff notices until after the election. They even went as far as to offer to pay for any legal fees associated with not giving employees proper notice - pardon, you will pay for any legal fees associated with the administration keeping the unemployment rate artificially low.

Two things:

1. Why aren't we hearing more about this from the mainstream media (rhetorical)?

2. Still think the jobs report yesterday was real?


Chris Johnston said...


Yes I was aware of that other story which is also just the crazy mindset you get when you already are getting away with doing things illegal. You begin to think you are above the law. With what we see politicians repeatedly get away with it is no wonder they think they can do whatever they want to.

It has gone to a new level the last few years and I think the reason is there is the most at stake in this election as any in the history of our country.

Too many people have their heads in the sand.