Saturday, November 03, 2012


I got some things right and some things wrong in my bold predictions in the last week. This is a good lesson to people not to be too much in a hurry to tell everyone how smart you are blah blah blah. Let's look at the predictions and grade them.

First I mentioned the Vix was giving us a buy signal and to wait for two things: first a close < open of the Vix itself; second a penetration of a prior day's high. There are a couple of ways of exiting a trade like this and it depends on your time frame. You can either hold it or can look for a quick short term overbought exit. I also mentioned that I was not thrilled about this signal because my second filter for it was not saying it was a go. Without the second filter this pattern is 60% winners and 40% losers. It does have an edge but not a big one.

I mentioned that the trade I was really looking for was a sell on a small bounce due to the larger picture of the trend in the Vix being down. Overall I would say that I got this about right. We are not at a sell spot quite yet another day or two is needed. Also we have had a very small bounce. The one way to exit short term trades like this is to get out MOC when the 2 day RSI is closing > 65. That condition was met Thursday so a small profit could have been made.

Second, I predicted that NFP report would be at 7.7% and it came in at 7.9% so I was dead wrong on that and my theory as to why was also dead wrong. The narrative became the gross jobs added which does not add up at all if you look at the ADP report. Perhaps making it 7.7% would have been so obvious that even the F You I Won team decided against that. It might well be that the sales job I have had to have while being hung out to dry with the PFG theft has biased me somewhat. I live in southern California and the business climate is just absolutely dreadful. It is possible I am imposing that view on the national economy in a disproportionate fashion. Maybe the national economy is better than I think it is.

The net here is that my market prediction which is what I get paid for was pretty good and my political opinion was wrong. If I had to miss one of those two I missed the correct one.

Here is a trade we have been in with the Swing Service that is working out pretty well, Natural Gas.

You can see the basic setup of a good sized short position in the COT data and where our short entry was initiated. We sat through some chop the first few days and now we have broken down some. There are the types of trades we try to catch with this service. I showed the one in the DX the other day where we sat in for a few days and wound up getting stopped out for a $70 loss so this is the fair and balanced side of the equation.This one is ahead about $2200 at the moment. That is a good trade off a 50% win rate and a more than 20 to 1 ratio. This is why I told people the Swing trades would make more money but not be as accurate as the Bond trades. That was proven out in the first month we offered both. They both made good profits for subscribers Bonds were more accurate and the Swing trades made more profit. So far so good.

Next week is going to be interesting. The polls are showing the race so close that anything can happen. I do think that regardless of who wins they are going to be facing a stock market decline at the beginning of the year. I fear if BO wins the market could fall hard sooner. I think most people have realized how bad he is for the economy. However, there are a lot of people who will vote for him for the socialism part of his agenda. What those people are not thinking through completely is what they will do when that agenda bankrupts the US and has to be discontinued like we are seeing in Greece. Be careful what you ask for you may get it.

I don't know if Romney is the savior or not but I do think it is time to give a businessman the job to see if anything changes. We gave an intern the job with BO and we saw what happened there. We might as well give the gig to someone who has actually accomplished something in life and see if it makes any difference.

The media's complicity in the Benghazi cover up may well get BO another 4 years. It is really shocking to me that these people would rather have Americans killed than lose an election. I still can't figure out why almost all of them should be for one side regardless of the side. It would make no sense to me if they were trying to manufacture a Republican win either. There is just something I don't know apparently.

I am about as sure as I can be about one thing in regards to the election. If BO wins it will be devastating for our economy. At age 53 I think it will not to able to be saved in my lifetime if he runs the debt up at the same rate he has been doing without any regard to it's long term consequences. We are seeing in NY that you cannot rely on the government to do everything for you. Bloomberg was going to use those generators that could have been used to help victims of the storm to keep the media comfortable for a marathon! He was doing it for money. It was only public outrage that forced him to reconsider. In other words left on his own to make a decision, a supposed champion of the middle class liberal, was willing to let that same middle class die to further his own agenda. If this does not wake you up I don't know what will. Perhaps the Benghazi cover up which might be the worst of it's kind in history? Big Government is not the answer.

Look at what Baldsler ( Gensler of the CFTC ) is doing with the new regulations on the segregated funds.


It has now been made abundantly clear, if you want to trade you are on your own in protecting your money. Please have your accounts at places that have equity account sweep options or in Canada. If you don't have either you are going to get burned at some point. The saying that it is only when the tide goes out that you see who is swimming nude, is going to be applicable. The next market down turn is going to generate the exposing of another one of these customer segregated fund thefts that is probably already going on.

It is interesting to read about MF Global and Corzine's strategy for using the customer money. They actually had internal proposals about illegally using the money that were discussed in meetings and reviewed. There was an executive who was fired that objected to the proposals. Just think about that for a minute. It is illegal PERIOD to use customer money yet they actually gave people the assignment of proposing how to go about using that money for company business! So managers made proposals to use the money and now Baldsler proposes as the solution to have procedures for managers having to sign off on segregated funds transactions. The very people who drafted proposals to break the law are going to be required to approve breaking the law. If this were not so dangerous it would be funny. Baldsler is either stupid or complicit you make the call.

They need to just do only one thing and one thing only. Make it impossible for them to do this. The segregated money needs to be in accounts that are not controlled by the FCM's. This way even when they plan on how to steal the money they won't be able to because they will not have access to it. The problem is they don't want to solve the problem or this is what they would do.


The storm messed things up a bit due to the back office staff of Vision being in the storm plagued areas. I think some of my accounts should be available any day now for trading. If you have money there you should be able to take it out or trade it next week.

I have seen nothing at all on the Forex accounts and cannot for the life of me understand why nothing has been decided on that yet. I think the system is just setup to enrich the attorneys and fleece the victims. Shaw Gussis is getting about a 100k a month by my calculations so what incentive to they have to hurry?

I think in the end seg holders are going to wind up between 50% and 60% of their money and the rest will not be seen ever again. The one thing that could effect that some is how the Forex money is handled. Even now the story is almost an after thought that nobody cares about. I wonder how it will be handled when the next one happens?

Next week I am looking for a sideways to up for the first couple of days then sell signals should be in play.

Good Trading


John M said...

Poliitics aside, I live in NYC, and believe me, government is the only hope a lot of people around here have. FEMA will give out grants, the National Guard has kept order, the Feds are helping get the subways working again so people can get to work...on and on.

Big government may not be the answer, but having lived through this insanity, nobody and nothing else could have mobilized and put together the money to fix at least some of what got destroyed here and return life to normal for some millions of us.

Maybe if the big quake comes out west and the Feds are the only ones able to really do anything of any scale to help, you might change your mind.

One thing that's true: people here in Manhattan have been incredibly orderly and decent. New Yorkers can be a**holes sometimes, but when the you know what hits the fan, they work like hell for the greater good. And sometimes there really is one.

Regardless whatever lying b.s. master wins the election, I don't think your and my older years are going to be very terrific. We're too far down the rabbit hole for anyone to pull us out, but I hope I'm wrong. Regardless, I don't plan to finish out my years here--this place is nuttier than a fruitcake and getting weirder all the time. At the very least, I'll try someplace where religious zealots don't have so much power and sway and are simply not elected to office. We have become, to a bigger degree than I like, the Middle East of Western Civilization in that respect.

Here's hoping it all turns out better than I can forsee.

Chris Johnston said...

I am with you John I will not be living in the US in 10 years or at least not in California. I am glad to hear things are better back there than what I have read and seen on the news. They are painting a different picture. I will tell you the union people forcing the utilities workers that came from Alabama to leave stopped me from donating any money to help.