Sunday, October 14, 2012


I missed catching this fiasco live but caught some of it on the back side. As BO himself would say "folks" if that behavior did not scare you there is nothing anybody else can say. Keep in mind if something were to happen to BO this imbecile would become the President of the US! If for no other reason than that you should vote for Romney. That type of behavior would result in you getting your ass kicked in most venues. With Ryan's workout regimen I suspect that fight would not last very long. It was kind of funny on some level but the arrogance of this guy especially while he was lying through his teeth was shocking. The last person to realize one is an idiot is the one.

The reason I am bringing this up is that the sheer arrogant tone the government has taken on does have something to do with the markets. They think it is ok because they won ( remember it is the F You I won regime ) to do whatever they want to do regardless of what anyone says. The manipulation of the stock market upward and the windfall profits they are giving to trading arms of banks by tipping them off in advance of liquidity moves is just another example of this arrogance. Many individual investors have not returned to the equities markets so they have not benefited by this upswing the government has created. Although we know the markets are historically biased to the upside and should always be looking to buy into these huge drops when they happen, it is understandable why some people do not do it. The sheer lack of volume during this rally off the lows tells us average Joe has not participated fully. It has nothing to do with the VP being a moron but it does have to do with the culture of arrogance they are fostering.

You look at the PFG fallout and the government is not willing to do an insurance fund. HUH? There should have been one after MF Global and there will not be one in place when the next one happens. It will happen. There is just so much corruption on all levels from local school boards in San Diego all the way up to the oval office. It is no wonder people are losing faith. I am as well. That debate did not help matters much. I will just make one last comment about politics then leave it alone. If we get 4 more years of BO this country will take decades to recover from what he will do to it, DECADES!

We are in somewhat of an in between spot in the stock market right here.

We have broken the most pertinent short term trend line at are now at the 50 period moving average. The typical seasonal buy is a couple of weeks away here from a larger perspective. It appears to me on a short term basis this market should be traded from the short side here on bounces if we get them. Sunday's are notorious for early slides that get "magically" reversed on Monday morning so don't get too aggressive tonight if we start moving down some. It is probably more likely a buy. I have been working on a system for this but it is not complete yet. It is a tendency I have observed over and over in the last few years. Ironically just straight up it does not have an edge so I am digging deeper into how to trade this scenario.

You can see the sharp contrast between my new COT tool and the COT data. At the recent low I had a buy in my tool that was accurate where the COT stuff was a sell. Then my tool moved down into a sell to catch the swing down. I designed it to move faster so it is doing it's job so far.

We are at some interesting inflection points in a few places. The metals now are in pullback mode and at a juncture as I stated on Friday where rollovers have taken place. I think they need to hold right about here or we can see a decent turn down there. Since the world is still one trade, stock and metals markets will likely move together in the near term just like they have been doing for so long now.

Here is a chart I have shown many times the ES with Gold over layed on top of it. For those of you who think being in gold diversifies you from the stock market you might want to rethink that premise. This does not mean Gold will fall, if we get into big inflation everything including stocks will go way up. Just don't count on dodging a big stock decline if one occurs by being in Gold or Silver. They will come right along for the ride.

PFG Update

The trustee has put out a document addressing the issue of FOREX as the next subject to delve into. He is lashing out at the criticism he has received on all fronts claiming that threats and complaints will not effect the outcome. I am sure that is true. However, to watch him make millions while many have gone bankrupt is a frustrating process. If he can't take the heat he should not have taken this gig. After MF Global this was clearly going to be a challenging scenario. He has made millions already in fees so poor little baby. Maybe he could give me one of those millions and make me whole and I will stop criticizing him. What has been identified is about $45 Million in forex money that they have found which apparently is the whole amount that should be there. The real issue in cases like this is there are laws that govern bankruptcy cases. They establish a pecking order for creditors typically the secured creditors are first and unsecured are next in line.

What a judge will do in establishing this order is anyone's guess and I have no idea other than I expect a weird decision that makes no sense to many. I think judges are the single biggest problem we have in this country. They make decisions based on politics and not law see the Obama care decision if you question that. Forex is not segregated money so as a customer you would think that would make you an unsecured creditor but who knows. I could see any one of a number of outcomes happening here. They could take the forex money and split it up across the board. They could give it back to forex only which would be shocking in the face of what the law says should happen. They could give it all to the segregated account holders. There could be another scenario other than that.

The problem I see here is that if you decide to trade forex you sign documents and when you do this you are agreeing to the conditions by which they money is held. It is not segregated. You cannot come back after the fact and say you did not know that. This is why until it becomes segregated you should not trade forex. Perhaps there will be a ground breaking case here where the bankruptcy laws will be ignored and you will get all of your money back. That could set a precedent for further thefts which we know are coming. It could give you a de facto precedent for the next theft. I do not have any idea what will happen with this.

Wassendorf keeps claiming the amount of loss as a percentage is way higher than it should be. I think he is using that as leverage to try and get out of jail and flee or off himself. However, they have identified some 300 plus suspicious accounts so I doubt he would be able to recount the bogus numbers of that many accounts off the top of his head. They keep saying he is cooperating yet the full extent of the fraud is not known yet after this long? Something is missing here it is pretty obvious.

I am mentally planning on getting back about half the money and just moving on. If more comes along later it is what it is. It will likely be many years by the time that happens and too late for many whose lives have already been ruined by this. I have divided up my trading accounts into 2 places at this point and will keep dividing it up. I know I will have another account stolen from me before my trading career is done so it is my fault if I let it be such a large percentage again. This one was not my fault but the next one will be. Isn't it a shame that we have to resign ourselves to knowing and accepting that money will be stolen from us again and the government will do nothing about it?

Trading Services

We are sending out emails through Aweber and it is imperative that you confirm the subscriptions. There are still many who have not confirmed the bond service. Please do so this is inhibiting our ability to fully switch over to a more efficient way of sending out the daily orders. We need a couple more days to test Aweber to make sure we do not get into what happened last week. Everything seems to be fine but we are just making sure. I was very stressed out not knowing if people were able to get the orders when we had trades going and not knowing what to do. Always keep in mind that all the stops in both bonds and the Swing trades are the same until we tell you otherwise. If for some reason you get the orders late on a day or don't get them for some reason, defer to the stops and exits you already have. In most cases they don't change much if at all day to day.

We had to cut off two good trades last week that were already on that went on to make good profits because of the problems. If everyone understands what I just stated we would not have had to do that. It is our fault so we apologize for this. There is an awful lot that goes on behind the scenes with services like this and I was not prepared fully for the level of interest. I am thankful to all of you who have signed up for something and we have made money in all the services. So far so good.

Have a great trading week!


Order Flow Trading said...

Thanks for this interesting post.. i like the way of sharing and going to bookmark it for more post

Vikas said...

Chris, spot on with your call on the ES weakness on Sunday night being a buy! Almost 20 points up from the lows last night.

Elliott Wave said...

its good to hear this story from you as i like the way you written your post ...keep it up good job !!