Thursday, August 30, 2012


After our standard ritual getting the dogs in from the barn and stopping them from the night coyote chases, which they live for, I got roped into about 10 minutes of torture watching a political speech. I will say this, Romney is definitely not Joe Cool like Barry is, but he is infinitely more capable of being president than Barry is. He is kind of a nerd and does not appear to be really comfortable trying to audition. However, I think he is a genuine guy who should be the president. I do not know if anyone including Reagan the great, could turn this ship around on a dime. However, the prospect of 4 more years of Barry is very scary. I just dislike how dishonest he is more than anything else. We will see what happens, I think it will be a nail biter by the time the Dems get all these illegal votes to count, they may pull off the save. It is hard to imagine complaining about not being able to vote without some type of ID, what is this Afghanistan?

I don't think the winner either way is going to effect the markets. I think we are going to have our standard drift down here now, setting up the typical rally at the end of the year. The one thing that is a little tough to handicap is that normally we get year end rallies due to rallies in bonds ( lower rates ). At the present time they are so low, the traditional impetus for a rally is not really there. As I have said before, whether it is quattro mas and a socialist future, or Romney and a move back in the direction of democracy, I think the markets are going to act about the same either way.

I think the guy who sang and the guy who gave the benediction had a reggae band consultant who taught them how to just say the same thing over and over until about 20 minutes ran off the clock. I quickly grabbed the remote and went to ESPN while that stall tactic was going on, just to get barked at from the other room that we would miss the review of the speech. Arghh.

We are at a time when many markets typically dip, so in the indexes that is the direction in general I am looking. I do have short term signals in various markets in both directions, so I am not quite sure what to expect tomorrow other than a quiet day overall. Gold and Silver in particular appear to be in nice pullback to buy positions.

You can see where my buy orders are resting here for tomorrow in Gold. Ideally here the COT Synthetic would be at a higher level than it is, in the area where it was the last 3 rallies we had. I do have a short term pattern with decent probability, so I am trying to play that here. Maybe we won't get up there anyway, and we will drift into a situation where the synthetic rises more into the buy zone in a few days? I just never know, and when I think I do, I don't!

The good news today was the judge in the PFG Bankruptcy is also questioning the 20K Corleone request by the trustee. This whole thing is just very odd. Maybe there is some chunk of money she has helped locate that has not been disclosed? It appears he is going to have to submit a detailed reply to get this payoff approved, so I guess we will find out specifically what she has done. The snide remark side of me has a few thoughts here, but I don't know if this attorney happens to be hot or not, so I will behave here! All in all the whole situation is peculiar to say the least.

There was a motion sent to the CFTC for approval by the trustee today for an initial distribution of some sort, so for those of you who are fellow victims, we are going to see some money here in 60 days or so. I have no idea how much, even though there are some rumors that it might be a little better than what people are expecting. In the end, the only people who know are not disclosing anything at all, so we really don't know.

Have a great holiday



This is the name of the web site I am opening up. It is not up yet so do not try to go there, I have some content work to do, and some image altering etc.. What you are going to see there which is what I wanted to announce, is something no other place I am aware of is doing. We are going to have a real account with real money, traded live there. We will show the account statements with the real time balances updated once a week to show that we make profits trading. This is of course risky, but I think it is time for someone to do something like this. After all the BS that has gone on in this industry, it is time for this level of transparency. Obviously the risk is if we do poorly who in the world would want to pay for any services? My question is, how do people live with themselves selling things that do not work?

Subs to the Bond Service certainly know that system works and makes REAL MONEY. There is another profitable trade going on there right now. I have not quite figured out how to best display this, I am working with my web guy now on this. It is basically just going to be a daily statement with the account number blacked out to prevent shenanigans. I hope to have the site up by the beginning of next week. I am partnering with a friend of mine who is the best trader I know, that is why I keep stating we, and also why the site name has changed to we from the blog name. I will also have the Pay Pal link up for the services, for those who have wanted to trade the bonds but either live in other countries or sending checks has just been other wise inconvenient. Also, there will be other things we offer. The prices are going to be pretty low, we want a lot of people if possible to get the word out. As a result, we are probably going to price things too cheap for our own good.

If there are any subs of the Bond service that want to send a testimonial that would certainly be welcome. You have to bear with me I have to do some marketing here. I will promise you there will never be a single instance where I over hype something. Under promise and over deliver is my goal, and that is how I have always lived my life from sports to business, to personal affairs.


Here we have an interesting development in the ES, a trend break. I think I have what is the most operative trend line in this market drawn in here, and we clearly are breaking that today, right on schedule for the seasonal tendency. I also have a graph there that shows the very low ratio of short term volatility to longer term volatility. Typically when that ratio gets this low, there is a break out move that is larger than normal as volatility expands. Of course you can see it has been low for a while, so timing things with this is a different matter. I think most of us have just had the feeling that things have been pretty quiet and are due to heat up a bit. This just gives us a hard technical graph that supports that feeling.

I don't like following feelings, my feelings are usually not very consistent. It has been the nature of this market lately, to just break the up trends out of the blue like this and not give us a lay up entry. I am not short this market at this point just for full disclosure. I would prefer to see this go a bit more down and bounce to setup the short, but it may not. If we are going to get a market break down, this time frame is most likely when it will happen. I do think overall dips are buys, so if we get a 2 or 3 week sharp decline, I will be buying at some point when I think the selling has exhausted itself.

The other trades I was looking at today were long in the metals, and possibly energy, but they do not appear to be likely to trigger.

Have a great holiday and look for the site next week. I will give notice here when it is up. Kinda sounds like what a husband would say to his wife huh?

Wednesday, August 29, 2012


It appears my protest to the proposed Corleone payment to the PFG lawyer gained some momentum yesterday. Essentially the argument seems to be that she is working very hard, poor girl, for 30k a month, I think most of my readers would also. According to some reporters I spoke to yesterday, the Corleone bribe payment is an attempt to stop her from fleeing the scene of the crime to go work elsewhere. I am sure offers are just pouring in the window, for someone who was the counsel of the firm that is going to wind up having stuck it's customers with the largest percentage loss in history, for a seg theft case. It may well be she was not complicit, but competent? I certainly would not want it on my resume, that I was the in house counsel for PFG, but that is just me.

In any event, I did stir this up some, and a couple of motions were filed by others in the court yesterday attempting to block the payoff. Of course the above photo is me whispering in the courts ear that I think it is a bad idea. My label of this as a Corleone is getting it's fair share of chuckles out of reporters. I did speak with the trustee's office yesterday, with one person in particular that I have spoken with previously. I will not disclose what was discussed because I gave my word that I would not. I can tell you from that talk that I think things are better underneath than they appear on the surface, and I do think they are doing what needs to be done. I did point out the lack of disclosure as being a problem for the victims. I think there are some legal things that prohibit them from disclosing certain things, so we basically wind up where we are. I guess in the end we will find out how good the trustee is, he does have a good resume for what it is worth. There is one person at the firm that I really like, who has been very courteous to me each time I have spoken with them. I am just going to assume Bodenstein is doing what is necessary now that I have made my point about the Corleone.

I have a day under my belt with the Think or Swim Platform...... not a huge fan so far. However, it is tolerable. It kind of reminds me of trading in that we all tend to make things too complicated, and we want to cover every possible angle in the rules. In the end we always find out that making things simple works better. I think that is the case with this platform, but I really need some time to get used to it.


Just as life is ever evolving, so is my website. I have a fellow trader who is one of the best traders I know, who is going to join me. We have something very unique we are going to do, and you will see it once the site comes up. I don't think anyone else is doing it. I have decided to offer an addition to the Bond Service, a service for all the other markets, as well as a monthly newsletter. The newsletter is going to be very cheap. It is going to go into very specific trading ideas, systems, etc.. For those who go for it, the annual cost will be so low that the first issue will give readers more value than what the annual cost will be. The idea is to get a lot of people reading it. Just like anything else, I am going to have to hype it some, but as per how readers know I am, it will not be BS. I am not an over hype guy as anyone reading here for any period of time, knows by now. Look for this in about two weeks.


I mentioned yesterday that we have had some significant commodity declines in September, are we going to have one this year?

This is the weekly CRB Index chart. Since it is not traded, ignore the Open Interest being low. What I wanted to highlight here is that we have had significant selling on this rally with the COT Proxy Index, and Sentiment has gotten very bullish. These two things occurring together, generally are a bearish development. It is scenarios like this and how to trade them specifically, that I will be covering in the newsletter. That is why I said one issue will we worth a lot in terms of value. There are some very good trades to be had in situations like this.

There are a lot of things going on right now in regards to the election, the drought in Grains, will Romney fire Comrade Ben if he wins? There is a very strong agenda for the stock market to stay stable here, so I think the FED will really be holding up the indexes with buy programs. I am watching very carefully the energy and grain markets here. We have superb trends in them that have not showed any signs yet of weakness. However, with the heavily seasonal down tendency here, and the cyclical downward pressure that is there right about now, it is time to be on the lookout for a trend change.

The last thing I wanted to show today was a trade I did in Sugar yesterday that worked out very well.

This was basically a day trade that was done due to the setup you see above, and a pattern in price I thought was favorable. I have harped on COT but have always said there are times to use it and times not to. In this case it was time to pay attention to it. This was a very short term scalp basically, but 40 ticks in Sugar in a day trade is an awfully good win. This is not a market that typically moves a lot.

You can see in this market the last time we had big bearish sentiment and big COT buying, we had that huge rally about 6 months ago. Will that happen out of this? Who knows, but I got on the board with a quickie yesterday. If I see a short term trend change, I will try and ride a long trade for much longer that I did here. This one is on my watch list for a trend change.

I guess the happy ending thought for the day is tied to the Corleone controversy. At times it seems like as an individual you can't make a difference. However, you can see with this event, that I did. If something is important to you, don't give up. Fight the good fight, you just never know what might happen.

Good Trading

Monday, August 27, 2012


I have now moved one of my accounts again to a place I feel is more secure than where it was. I now have half my trading stash over at TD Ameritrade due to their FDIC insured daily sweep function. In this wacky world we live in now, I think this is about as safe as it can be. RJO Canada is actually the safest place in the world to have your money, but you need a canadian address, which I do not have. If you live up there get your money there yesterday! Don't whine about the $15 commissions, you will have 1 Million dollars of insurance on your money, the only place in the world you can get that. Take it and run there if you can. I think in the US where I have gone to is the best choice. I am now going to have to deal with the platform so hopefully it is ok. It does have the custom functions I require, so that is a good start.

I sent a letter to the PFG trustee over the weekend and they said they would read it. The Corleone to the PFG counsel is beyond belief. I also spoke to the CCC guy's wife today who works with him, and she said they were going to file a motion objecting to the payoff. That attorney should be drawn and quartered not paid off. She could have been compelled via subpeona to cooperate anyway, and the fact that she is still on the payroll raises my eyebrows a bit. Maybe we should sue her for gross negligence at some point, depending on how all of this works out. Of course, it the trustee would just communicate something publicly that would indicate something positive happening, it would calm down the angst among all of us. Maybe there is a legitimate reason for all of this, but on the surface with a goose egg on the scoreboard, and no communication of any kind about some money being there, it is crazy to be putting in motions like this. This guy has good credentials, but he certainly seems to be handling this poorly so far.


We are coming up on the time when in recent years we have had some significant declines in the commodities markets. You can see with Crude Oil here, we have had steady Commercial selling on this rally. As we know this is typical and not by itself necessarily that big of a deal. However, when it comes at a time when we have had some big drops in recent years, it gets my attention. We have been ignoring the seasonal tendency right here,  you can see it called for a top a couple of months ago. So what we have is a crossroads here. If you look at the other energies, this is the one that is lagging, so if you are inclined to short one of them, this is probably the one to play. I do not see an entry as of yet, but I am lurking here with this market.

There are things I don't show here that told me to ignore buys today, and I am glad I did, they would have been bad trades. Of course that is why they are in there, to save me from myself! This is one to watch for a sell in my opinion.

I am working on my web site this week, and hope to have it up by the end of the week. I am debating a potential name change for it, so it is possible it will be launched next week instead.

In the wake of all the negative news out there, I think it is time to end on a good note here. I am sure most of you don't play golf, and for that matter I had to give up my club because of the PFG wipeout. However, I found myself watching a movie about one of the greatest upsets in sports history, The Greatest Game Ever Played. It is a movie about how a 20 year old amateur won the US Open. It is a hoosier type of movie. For anyone who loves underdog stories, this is one of the great ones, and for the most part the movie is a correct depiction of history. There are some things that are different, but the basic premise is pretty close.

Why do I mention this? if Claude Quimet could win the US Open, any of you can make a million dollars trading. It is less of a long shot for you to do that than it was for him to win that golf tournament. Keep the faith, and keep working hard. 

You can do it, we can do it!

Saturday, August 25, 2012


I know I had said previously that I was going to get off the PFG topic, but I just decided to read through the court docket to see what was going on and there is a mushroom cloud now above the city of San Diego. The following are a few excerpts from recent court filings:

. The Trustee also requests authority to increase the compensation paid to the 
Debtor’s general counsel, Rebecca Wing.  During calendar year 2011, the Debtor paid Ms. Wing 
$380,219.92 annually, which was comprised of a base salary and bonus.  During the Trustee’s 
operation of the Debtor’s business, it has become apparent that Ms. Wing’s services are 
invaluable.  Ms. Wing contains a wealth of knowledge regarding the Debtor’s business and has 
extensive experience as a commodity/financial  services attorney.  Based on the outstanding 
services provided by Ms. Wing, the Trustee requests authority to modestly increase her annual 
compensation to $400,000.  This amount represents only a slight increase in Ms. Wing’s salary 
from calendar year 2011.    

You mean to tell me I am paying a frickin attorney more than she was paid while she participated in the theft of my money, because of how valuable she is? If she were that valuable we would not be in this predicament. How valuable could she be, they have not returned one red cent to us, ZILCH. If it were not for her would we have had to pay in additional money? This is an insult to anyone walking uprights intelligence.

By this Motion, the Trustee requests further 
authority to continue these benefit programs postpetition (collectively, the “Employee Benefits” 
and together with the Wages, the “Employee Obligations”).  The Employee Benefits include the 
Case 12-27488    Doc 123    Filed 08/22/12    Entered 08/22/12 10:09:25    Desc Main
 Document      Page 7 of 9

a. Vacation benefits.  Unless otherwise agreed to by the Debtor, after six 
months of eligible service, an employee is entitled to five vacation days; 
after one year of service, an employee is entitled to ten vacation days; and 
after two or more years, an employee is entitled to fifteen vacation days 
each year.    As of the Petition Date, certain Retained Employees had 
accrued unused vacation days.  The Trustee requests that all Retained 
Employees be authorized to use such accrued vacation days as authorized 
by the Trustee while the Trustee operates the Debtor’s business.  The 
Trustee does not propose to “cash out” any unused vacation time and he is 
not seeking authority to pay the same. 

b. Insurance.   The Debtor provided insurance  coverage and other benefit 
plans to its Retained Employees, which included dental, vision, health, 
disability and life insurance.  The Trustee requests authority to continue 
the insurance obligations for the Retained Employees for the period prior 
to the Petition Date and while the Trustee operates the Debtor’s business.
c. 401(k) Obligations.  The Debtor sponsored a 401(k) retirement savings 
plan that is administered through a third-party.  The Debtor provided its 
Retained Employees with a matching contribution (“Contribution 
Program”).  The Trustee does not  seek authority to continue the 
Contribution Program, but seeks authority to permit the Retained 
Employees to continue making contributions to their 401(k) plans. 
d. Flexible Spending Accounts.  The Debtor provided its Retained 
Employees with a flexible spending account plan (“Flex Accounts”), 
pursuant to which some Retained Employees maintain accounts for 
healthcare and dependent care.  Under the Flex Accounts, Retained 
Employees have amounts withheld  from their paychecks and those 
amounts subsequently can be used to reimburse Retained Employees for 
their healthcare and dependent care expenses.  The Trustee seeks approval 
of this Court to continue the Flex Accounts with respect to the Retained 

Now we are going to keep paying these ...... not only their salaries with our money, but vacation and flexible benefit spending accounts? This is a systematic scheme to bleed us completely dry. That asshole was paying these people these exact benefits out of our money illegally for years, and now that it has sent the company into bankruptcy and some of us onto the verge of that, we see a motion to continue the same? Pay them a salary, fine, but not this other stuff. They don't have anywhere else to go in bum fuck egypt where this place is located to begin with. Are they in such demand that we are bidding for their services? For god sakes this makes me so mad I cannot tell you.

This may seem insensitive on some level since most if not all of the remaining employees are probably good honest people who had nothing to do with any of this. However, what we have to keep in mind is that they are employed on a false premise. I would not choose to just piss more and more of what little money I am likely to get back here, paying these people to do anything. The whole process of bankruptcy is designed to just completely ruin the victims and enrich the lawyers. I will now be drafting a letter to the trustee, this is just beyond belief to me. This all leads me to the following.

When this is all over, and I have recovered by earning back my money through trading, I am going to be on a mission to go after all those who participated in this scheme to take all of our money. If you just do the math from some of the court documents about the $650 an hour one group is being paid, you can see that the longer they can draw this out, the more likely it is they can take all the money and not have to pay any of us anything. Give me $250 and hour and I guarantee I can do an equal or better job of whatever they are doing for that $650. I have an IQ of 145 do you think many of those people can best that? I doubt it. If they can I have a sister who resides at 170 on the IQ scale, that I could bring in as a consultant, if I am too stupid to pull it off. These people have a great scheme, just designed to bilk victims. This is just absolutely sickening.

I am not sure when or where, but I know the what. I will go after these people with everything I have at some point in time, and they are going to wish I had never been born. It will all be legal, but it will be relentless. I seemingly have survived this albeit barely, but many others have already been driven out of business, while the trustee just merrily prances around pissing away our money. I hope he is enjoying his tea every day. His argument that since the case is based on fraud they want to make sure they don't give someone money who does not deserve it is absurd. When was the last time any commodities firm mistakenly made an error to the positive on a statement balance? I have traded for almost 30 years and never had that happen even once. For him to argue that they have to spend millions of our money making sure something that is almost unprecedented, did not happen, should be illegal.

On a positive front, I did find the solution for getting funds covered by insurance, and it is a really great one.


Joe, if you are reading this post, thank you. I also think there was another comment or two about this in the blog, and I don't recall who made them. You mentioned this to me a while ago, and I did nothing with it, but finally decided to check into it. TD has a daily sweep into an FDIC insured account of any excess margin, which would then be insured up to 250k. They have two such options, so that allows basically up to 500k per account, that could be covered. Open positions are not covered in this fashion, so any margin there would be segregated and subject to theft. With large account balances I trade way under margin, so in this case had I had my money at TD, the over 500k amount would be all that would have been lost. I was flat when this went down, so I would have only lost the amount I had in excess of 500k, which is a hit I could live with.

This is just tremendous news, and really lifted my spirits yesterday after I left their office having conference called with their people in Chicago. I did ask for it in writing and they are working on that, but it actually is right in the account application documents. I also think from talking to them, their Sink or Swim platform is pretty good. I have yet to try it, but I will put up with it no matter how it is, for the safety that is available here. Of course as well all have learned, seg money is just a sitting duck to be stolen, but here we have some back stopping of things due to this being a bank.

Yee Ha, this takes a load of my mind because it has really been nagging me knowing that there are other seg thefts clearly going on that have not been discovered yet. It is my belief that just like MF Global, daily usage of Segregated money for company business, especially with firms that do prop trading, routinely goes on. It is tough to plan a business knowing you are hoping just by random chance you can luckily move your money around right before someone else steals it. That is not much of a business plan.

Now to some market talk.

I would normally say the Gold market here was more of a sell setup than a buy, NORMALLY. The reason why I don't think it is now is that this market like the stock market, is being manipulated by governments to rise. At some point even though I do not like that, I have to accept that it is what it is. I discussed often that recent support level and how important it was. Now that it has clearly held and we are flying higher, even though I see the COT data shows heavy small spec buying, and an overly bullish sentiment, I think that can be ignored. Since stocks and GOLD are so closely tied together now, and the stock market is in full bull mode, I see no reason to be bearish on Gold.

One of the reasons that I like the COT data, is that it gives hard fundamental information to look at. However, what I don't like about it is a couple of things. First, I think some groups are getting improperly classified, and as a result, the numbers are not as reliable as they used to be. Second, even if they are accurate, they are not great for short term trading, which is what I focus on. The purpose of showing this chart is to illustrate an instance where I think COT should be ignored. We have a buy the pull back situation here in my view at this point.

You can see how well the entries on pullbacks where my bands are work. I have several labeled with just one being lousy, the last one. What this calls for now is a pullback to the green band for long entries. It currently calls for about 1360ish. This will rise as price does, or goes sideways. The bottom line is that I am looking to buy a pullback, hopefully a steep one that gets every one scared. Will we get it? Who knows, but I have a plan if we do. I do not see anything in the COT data here that tells me anything. There is selling going on in the Proxy and regular Commercial position, but when that happens against the trend I ignore it.

For the most part we have up trends everywhere and it is buy the pullbacks, with exceptions being Coffee and Sugar, and I might have left a few others out.

Enjoy the weekend

Friday, August 24, 2012


I did get stopped out on the Natural Gas trade yesterday, when that huge turn around happened intraday. I did say in the post that in today's world a good gain like that can disappear in a flash and that was prophetic unfortunately. However, it is just another trade that I would take again, it just was a loss. In a "fair and balanced" approach, I will also show two other trades I made yesterday that had better outcomes.

The first of those is the above trade in Corn. You can see on the chart where I entered and exited. I love trades like this because it was never out of the money even for a single tick. There are a couple of questions that I am sure would be asked if we were in an auditorium. First, why did you exit so quickly? The answer to that is simple. This trade was based on a short term pattern, and the edge was only for one day. It may very well waterfall and become a huge trade I could have held. However, the reason why I did not hold it is also the answer to what would most likely be another question that might be asked. Why did I short a market this strong?

The answer to the second question is also an answer to why I did not hold this trade. The pattern for the trade does work in both up and down trends. When determining when to hold something that is a very short term pattern or not, I take some other things into account. One of those is the strength of the underlying trend. I have mechanical ways of doing this, and in this case the numbers were just too strong to try and hold this for more.

Since I have decided to get back into things, bring my website back up, and offer trading services again, there will be more specific details available through those services. I have to hold some things back from the blog and I am sure readers can understand that. I already give up quite a bit here as it is. The PFG situation has just made me realize I have to diversify myself somewhat again, so that is what I am doing. I am sure the subs of the Bond service would tell everyone they are getting their money's worth and more there so far. To close the book on this trade in Corn, it made $450 a contract and was more or less a day trade, and that is pretty darn good in a market like this one.

The next trade I also did yesterday, which I call OK, was Feeder Cattle.

You can see on this chart where I entered this trade on the long side. In this case I have decided to try and hold this one because it appears to me the trend is turning back up. I could have easily taken a quick good sized win on this, but the big money trading is not made day trading, it is catching larger moves. That could mean just a 3 day move, since the markets are so volatile. You can see right on this chart the big move down, which is a good example of the types of things you have to catch. In that instance you had several days where the prior days high never even went. You could have just trailed the stop down until one did get taken out, and gotten a very good gain out of that move, about half of it.

This leads me to a question from yesterday's post about the Natural Gas trade, which was the ugly.

This one looked like a beauty for a couple of hours, then completely reversed. You can see where I entered and where I got stopped out. Yes price has come back down, and you could say "well you had your stop too close." Perhaps, but my patterns are designed to move right away, so when they don't I do not give them a lot of room. It is all about risk control to me. I could wind up shorting this again next week, the setup is still there.

Today you have seen 3 trades that are all different. One was a disaster, one was just great, and one remains to be determined but had a good first day. This to me is typical of this business. Sometimes you just get kicked around a little bit but you hang in there because the good streaks, like what the Bond System is having, will come along. That is when you make your money.

We are getting a pullback in stocks here, which at the moment to me is still a buy. If we were to mess around down here for a few days, then go up and test the high and start coming back down, that could be a sell signal. It is too soon to tell on that front for me.

Good Trading

Thursday, August 23, 2012


This is going to be a little hard to read, but you can get the gist of it. I have above a summary of just trades by some systems I have this week. I did not do all of these obviously, but you can see that overall most of them are pretty good. However, you can also see that there is a rough stretch the last few days on these. You can see 5 of the last 12 trades have been losses. This is the harsh reality of trading. Even though overall these results are incredible, there is still a bad period where money was lost. I know of no way around this. It really aggravates me when I come across people who advertise things, and how they never lose, they caught this, they caught that etc.. Then you check into it and find out their methods do not work.  I recently checked into one of them, who had a good record. There were 7 strategies that supposedly were available to trade the emini SP 500. They released one of them as a teaser, and when I studied it I found it does not work. I then traded some emails and talked to someone who worked there who admitted that one did not really work. HUH? I think what we probably should do is a trade if the league salary cap rules will allow it.

I think we should swap all the people who are in jail for trading violations, for those who are not but suspected, just switch em all right now. Of course we will let Madoff and Stanford stay there as being grand fathered in to stay there. We also throw the judges in jail that support the theft of Segregated Funds starting with the court of appeals judges in the Sentinel case. The judges are worse than the con men in that they support their crimes.

The moral of the story here is, there are always going to be losses and losing periods. I was talking with the head of a brokerage firm the other day, and he told me of the prop accounts they were currently running, only one guy was ahead. The guys trading these accounts are all good traders, so that tells us how tough it is to be consistent, year in year out. In as much as my Bond System is just absolutely killing it right now, having made over $11,000 a contract just since the April introduction of it here, I know a period like what we see above is coming. I would bet my life on it. I also know that some people will quit once it begins. Most people do not have what it takes to trade through a draw down, and that is why so many people fail. It is not easy.

You always feel like a genius and get so optimistic, when you are having good trading runs, and get too down when you have tough periods. This happens to me also, although I try to stay as even keeled as I can. Now that I have had so much money stolen from me, the wiggle room I always had for draw downs is gone. I have had a couple of lousy trades this week after starting off with one that was great, and it has ticked me off. I am so determined not to let PFG ruin my life, yet my start back up has been slower than I wanted. Nonetheless, I will stay the course all the while moving my money from one firm to the next and back and forth to banks, to try and stay ahead of the next customer theft that we know is coming. I feel like Jason Bourne.

Moral of the story, trading is tough, suck it up or do something else. This is not an easy road to riches in spite of what so many represent. It is like any other business, you have to work hard, and grind through tough times.

Here is a trade I am in today, Natural Gas.

The reasoning behind this trade is as follows. First, we have a rollover in price and a retracement into what is now a short term down trend. We have the momentum indicator at the bottom rolling over confirming the trade. We also have some red arrows on the chart. Those are somewhat complex and will not be revealed in here as to what they are. Essentially they are indicators of buy and sell points. You can certainly see instances here when they are great and others where they are not, so they are not the holy grail. However, when I get a confluence of things like this all at the same time, it is a trade I need to do. I have not established a target yet because it would be too far away to be hit today anyway even if we went way down. Since I do see this as being with the current short term trend, I will try to ride this one for a bit if it goes in my favor. As anyone who trades knows, what we see on the screen could evaporate in an instant nowadays.

Interestingly enough, I do have a few potential short term sells in grains today, that I doubt will trigger. Gold and Silver are absolutely flying, so we can see how significant that support level in Gold was that I talked so much about. I did say if it held we could be off to the races, and we are. The Gold market is very much like the stock market now. It is being artificially supported by governments and their buying. The one difference is that the buying by governments in Gold is more transparent than the stock indexes. The reason is, it is other countries. Isn't that great, once again we have to look outside the US for integrity.

One last note for today. I have decided to re-launch my website on trading, iamafuturestrader.com. There will be a link to it here in a week or two. I have to redo the site, and finding the time is a challenge. What will be convenient about it is that subs to services will be able to access the orders and pay via Pay Pal right there, without having to screw around with sending me checks like the current arrangement. I got a very good deal from my old hoster to help.

The day it is up I will announce it here. It keeps things simple since the name is the same. Since subs are doing so well with the Bond Service I decided it was time to get back into this again. I may do a newsletter also, which will be dirt cheap, and teach more specific techniques for trading. I also plan on expanding beyond Bonds for trading signals for those interested. 

The PFG update is basically just that everyone is getting pissed off at the trustee for dragging his feet on the initial distribution of customer funds. I guess I am too. Just watching accountants and lawyers charge $650 and hour for weeks on end, which it taken out of our money, is beyond frustrating. It is nice to know they all become millionaires, as I was taken of that list of millionaires in the process.

Good Trading to everyone

Wednesday, August 22, 2012


I posted some really aggressive targets yesterday for the SP 500 in the 1571 area. This does not mean I think we are going to reach those levels. They are simply possible upside projections to keep in mind if the run keeps going. The only way I use targets, is when I am in a trade that I think can really roll, I use them for exits. If I were long here in the ES which I am not, I would NOT be trying to hold for 1571, no way! I don't really have an opinion one way or another about whether or not we will get to that level or not. We are in a bull market, so surprises for the most part should come on the upside.

In the mean time back at the ranch, we do have some short term things that are potentially setting up for a short term trade on the down side. You can see one of my tools is showing some divergence here, which draws my interest a little bit. I have marked off the recent divergences with this tool, and you can see they all spotted a good short term move that quickly followed. I think this one is a little different in that it is what I call a running market. This means were are just moving along with almost no pullbacks. Divergences in situations like this are much more difficult to trade, and I don't trade them stand alone. There is going to have to be a dip and re-test of the high in some fashion for me to get interested on the short side here, if I do at all. I have seen many instances of divergences like this just working themselves off, and the market continuing onward for quite a while.

I would not get too wrapped up in what this line is, it is notoriously difficult to work with and I do not use it much anymore in my trading. However, I thought it was worth posting this as I stumbled upon this yesterday. We have had two consecutive outside bars which is somewhat unusual.

Here are the results if you sold at the low when there were two consecutive outside days in the ES and exited when the RSI(2) closed under 35. You can see this is certainly a terrible pattern in general to enter a short trade today on. These results are over the last 10 years, so you can see that we have only had this pattern 6 times where the low was taken out the next day. This is not enough occurrences to base anything on in my opinion, unless there was a very strong bias indicated. If anything here is what you could do with this.

This shows buying at the low of the second outside bar on a limit and exiting at the first profitable opening. I still feel there are not enough instances of this for this to be a trade I would do, unless there was something else backing it. However, the point is that you can see if anything there is a bullish bias over the very short term with this pattern, not a bearish one.

I know we all trade with different entry and exit techniques, I just discuss here what I use. For me net net there is not a trade here today, even though I am looking for a potential short term trade on the short side here at the moment.

Good Trading

Tuesday, August 21, 2012


I have one possible target on the screen at 1571, will we get there? I have no idea. We are in a very strong bull market now so who is to say how far we will go, and whether or not we will have a decline next month. It certainly does not appear to me a decline is coming, and picking tops is something that is a fruitless exercise. There is certainly no doubt in my mind if a dip comes it is a buy. Once again we see that the disconnect between the economy and the stock market is alive and well. I have maintained and continue to maintain, that we are going to have a long flat period in the economy and not Armageddon, a Japan type of situation.

If that assessment is correct, and we have low rates for a very long time, I don't see why we can't have a strong stock market. One of the things I researched and reported on in here a couple of years ago, when it was apparent the new regime wanted to change our system to one of socialism, was what effect that would have on stock prices. Now that it is patently clear that hypothesis was correct, we have to look at what that study showed. It showed clearly it was not a negative for stock prices. What it did show that was curious was that stock prices in countries converted to socialism tended to follow the world leading country. The dilemma now will become who that will be if Barry gets four more? It is clear he does not want it to be the US, since he wants to diminish our dominance. Further, it is hard to believe it could be China, a communist country. Further than that, there does not seem to be an obvious choice. 

Just by definition, a socialist country cannot be a leader, so if the world becomes flat economically, it will be very interesting to see who emerges as the new leader. I have no idea in all honesty. Net net, for those looking for a big decline because of the conversion of the US, it is not likely to happen. It just boggles my mind when I listen to this guy talk, and that complete idiot VP on top of it, that there are 100 Million people dumb enough to vote for this guy. It is shocking 1 Million people would vote for him. He has done a fabulous job of creating internal turmoil and pitting us against each other, to the point where the class warfare is actually working. Even in spite of what happened to me with PFG, I do not want a hand out from someone else. I will build my money back up, and if that blank... comes in and tells me I did not do that somebody else did, LOOKOUT BELOW!

As I watch the circle of the Fed and the Banks get tighter and tighter, what I have missed in all of this analysis has become clear. They are controlling us through the banking process. They keep giving banks beneficial legal decisions that have no legal precedent. The Fed is controlling the stock market almost completely. The money is getting concentrated in a place where they can control it and control us. I don't know why I did not see this before. I do not know how to break this circle other than to leave the US, and I don't think that is the solution. Keep in mind if we were to get an inflation spiral, which does all of the sudden now appear to be a possibility, that gives them more control. There will be more people relying on the government than ever. Check mate.

This is all conjecture on my part, but it would be tough for someone to change my mind. I never really thought the idea of the tri-lateral commission was even worth studying, because I just never thought the collective public could be manipulated to the degree that it is being done now. Perhaps that is an area for further study.

To pull of this grand scheme if in fact there is one, Bond prices need to remain strong. You can see in the next chart, there is a text book BUY setup with the COT data at hand.

We have an up trend in price and a decline against that trend with Commercial buying accompanying it. We have a huge decline in Open Interest. There is very negative Sentiment now. The Proxy Index has also shown huge buying. From a COT perspective, this is about as good as it gets. This does not mean you run out and buy Bonds. It means that fundamentally we are setup for a rally now. It is up to shorter term tools to ferret out trades.

Good Trading

Monday, August 20, 2012


One of the basic concepts of COT data is following the Large Specs. Everyone focuses on the Commercials when they first start learning about this. However, what they come to find out is that the Commercials are on the wrong side of the trend a good portion of the time, and you can just get run out of Dodge trying to fade trend moves if you focus solely on them. You will notice that the black line in the chart above is the Large Specs, pretty much a mirror image of the Commercial positions.

This is typical for them to be the polar opposite, but it is not always the case. One of the basic COT theories is that the Commercials are the trend changers, and the Large Specs are the trend drivers. You can see this is pretty much the case where I have the arrows on the chart. Clearly in those cases, there were trends, that as they went along, the Large Spec position just got increasingly more supportive all the way to the point where the trends changed. The reason for this is that the large funds are typically scale in buyers and sellers. As a result, they will most of the time have their largest net shorts at lows and net longs at highs. Conversely, the Commercials will typically have their largest shorts at highs and largest longs at lows.

Neither one of these as a result, is great from a short term timing perspective. The Large Specs get you leaning the wrong way at the end, and the Commercials often get you leaning the wrong way too soon. It is this dilemma which makes using this report and art and not a science. It is also why I go back and forth with it in terms of when I pay attention to it and when I do not. For the most part I do not watch in any more other than when I am looking to do something on a longer term basis.

One pattern that you can see at the first arrow, is one that can be quite useful. You can see in this case, the Large Specs starting buying pretty heavily before the trend started to change, or at least lightened their shorts quite a bit. This was telling of a trend change coming. We then came back down to test that low in price, and yet the Large Spec net position held way above that same low in price. This told us that they were going to push a move higher most likely. You can see how sharply we rose after that pattern was formed. It is these types of subtle things that are helpful with this data. Just looking at grand totals of who is where is not really meaningful in my view.

Hope this helps

Just the update on PFG for those of you stuck in this with me. The trustee did put out a memo at the website basically saying they are a few weeks away from getting some money back to clients. There is no mention of the amount, and it really is anyone's guess as to what it might be. Here is the one glaring inconsistency in the numbers in my opinion. On the day of the debacle, there was supposedly $397 Million dollars in Seg funds at PFG. The NFA complaint cites over $200 Million dollars missing. So that would roughly say about half is gone. Also according to the CFTC records, that number is what they had consistently claimed recently in the Seg amounts. However, the trustee has reported very specifically that $197 Million dollars went to PFG from MF Global clients since the October implosion of MF. So if we back that out of the $397 Million we get to $200 Million which must have been there before October of last year. Now we are told that $200 Million is missing, if we back that out of this we are left with zero? 

This would mean if he were stealing over time as he has claimed, they essentially had zero Seg Funds on hand in October of last year, or the $200 Million has been stolen during the last 10 months. If the latter were true, he must have had a lot of people involved in that to pull it off. Also, clawing it back will be easier. I doubt this is the case, so the net of this is that these numbers are so inconsistent, that I think it is causing the trustee quite of bit of trouble trying to figure out what is real and what is not, hence the long delay. Since the odds heavily favor most of it having been syphoned off before now, the question is how in the world they met the margin requirements for all the trades of their clients for so long. Even though those dumb asses at the NFA accepted fake statements, the clearing people are not going to do that. There had to have been money somewhere?

In the end all of this will come out as to who else was involved and how exactly this happened. He does not appear to be a Democrat, so he won't be exempted from the law like Corzine is. Although one thing to keep in mind with Corzine. I am not sure if there is any actual hard evidence or proof that he did what we all think he did. If there is he will be bankrupted in civil courts which might be even better than him going to prison. He is pretty wealthy, and I can tell you from the life style changes I have had to make on a smaller scale, it is no fun having you money taken away when you are used to having some. Also, what is lost in all of this for some unexplained reason is that MIF Global Clients are going to wind up with 100% of their money back. All these articles I see never seem to mention that for some reason. Also, the few articles we see on PFG don't seem to mention how much worse this is likely to be as a percentage?

Good Trading

Friday, August 17, 2012


We have gotten back into this quiet creeping mode here, a wet dream for the PPT. They can control this thing on an almost hourly basis with volume being this light. It is rare to have it be like this at this time of the year, this is more of an early summer type of feel. You can see the Presidential Cycle stuff down at the bottom here, and it is clear that this year we are following the 4 year Cycle more closely. Note that both of these cycles indicate a downward move is coming here.

In the old days it used to be that these slow creeping moves would all of the sudden out of the blue, just waterfall downward with no warning at all. In recent years although we have seen that a couple of times, more often than not, those waterfalls are quickly contained by the PPT. That was the original reason it was formed, so this is not a surprise. Also keep in mind it was formed by a Republican president, so we cannot blame this on those that may have different views politically.

The challenge with cycles like this and forecasts as well, is that although they give us road maps that often wind up working out pretty well, it is tough to know at any point in time, when they will kick in. It is certainly a tough proposition to short a market like what we have now just because we think a cyclical influence is about to exert itself. I would not do that. The best way to play this in my view, is to wait until whatever tools you use line up with the cycles. Once that happens you have the combination of both together, which should make for a better trade. 

In my view, the way this is looking, the coming decline forecast by this stuff most likely sets up a buying spot at my bands now that the trend is back up again. I doubt very seriously I will try and cherry pick this top. However, if my patterns happen to give me high probability sells, when the cycle is due, I will take a swing. One thing we have to keep in mind here, and this is an opinion on my part, is that we probably have more at stake in this coming election than at any time in the last 100 years. As a result on both sides, there is going to be a lot of manipulation of just about everything you can imagine in an attempt to sway the public one way or another.

We are going to have the Dems hawking the stock market to try and get the focus off basically everything else that has gone completely south during Barry's regime. The Repubs will be doing their schtick. The PPT is going to be balls out to support any decline that happens. As a result, I expect any drops to be quickly contained. 

All I have is some long positions that are short term trades in grains. I was looking to short Crude today if it broke, which it is not. I was also eyeing Silver on the short side, but the stop was too big based on how big yesterday's range was.

One other comment I wanted to make is on the subject of Segregated Funds. As I have been able to get a little less emotional about all of this and look objectively at all of the things that have happened in the last few years in regards to this, I have a few thoughts.

1) The courts are supporting the illegal use of such funds by the brokerage firms
2) The courts are consistently putting banks at the front of the line in the distributions
3) It is completely incumbent upon us to protect our own money, the system is not going to do it
4) There will be much much more of this because of items 1 and 2 above.

My plan going forward is as follows. For every 100k I make, it will be taken out of where it is and divided in two, then sent to new brokerage accounts I will open. The goal is to never have more than 20% of my trading capital in any one place ever again. I would bet my life I will have all of my Seg money stolen again at some firm as yet unknown. This way it only will be 20% of my trading stake.

I will also monitor rating services very closely. If any parent company shows any kind of trouble, POOF my money is gone. I did that with Knight, and just did it with Tradestation with some of my equity money. Their parent company has a very low rating at one of the services I reviewed. The FCM there is rated well at Atlas, but if the parent gets into trouble, that is when the money starts getting stolen. We have seen this over and over. Also, I am looking mostly at firms that hold a good portion of the seg money at the MERC. These are about as prudent a safeguard as I can muster. Please keep in mind as we have seen, even doing this will not assure anyone of anything. With judges constantly putting the banks in front of us which is illegal, even if your money is at the MERC, it will go to the banks in all likelihood in a bankruptcy proceeding, and you will be left holding the bag.

The other thing I am going to do which I don't want to but feel I have to is this. I will keep the balances in my trading accounts smaller, but view them as a larger amount in terms of risk. Here is an example. If I have 1 Million dollars to trade like I used to, I will put 200k of it in brokerage accounts and keep the rest at banks. If I want to risk 2% per trade, which would be 20k of the 1 Million, that will wind up being actually a 10% portion of my brokerage account balance, but only 2% of my total. My brokerage accounts will be more volatile, but they are a portion of the whole. I will wind up doing a lot of wiring of money most likely, but I am not going to let another one of the MF's steal my money so easily.

The two things that could change this are insurance, if they establish it, and insurance, if I can buy it reasonably. Having all the money at the MERC is not enough of a safeguard. The bankruptcy judge can still give it all to the banks like they did in Sentinel. I am also not going to subject myself to another wacky decision by a judge who may be corleoned by someone or otherwise beholden to someone other than me.

I hope this all makes sense.

Have a good weekend and stay long, tighten stops come the first of the month in case the cycle kicks in.

Thursday, August 16, 2012


I just received an offer of .25 for my PFG claim, might as well be a penny. Any of you that have claims of over 50k will be contacted soon if you have not already been. If you have less than that the offers will probably be less at this point. I don't think there is any reason to bite at this right now. Just the tax right off alone for most people will get you back that percentage or more. We are nearing the motion for the first transfer, which is likely to be close to that amount as far as I can tell. I am sitting tight.

It is time to get rid of all the negative thoughts, we are on the verge of full on bull mode again. A 5 year old would have felt we never left that mode probably. Guess what, he would have been right. It is always so easy after the fact to see the trends, but we have to have some rules for identifying them as we plod along. The ones I use got whipsawed here, plain and simple. I missed the memo where they teach people who talk about trading on the web, to never admit when they are wrong. I don't believe in being dishonest like all these other people are.

My plan now going forward is to buy dips here. There are so many things going on here that are bullish, there is no reason to get carried away with all the political BS about Barry vs Romney, who is better or worse. Who will make stocks rise etcc. Interestingly enough, there is a slight historic edge in market gains, to democratic administrations over Republicans. It is not enough of a difference to matter, but the point is Socialism is not necessarily bad for the US Stock market. It might be bad for our society, which is how I feel, but just for stock prices alone, it is not.

Here are two road maps that show average prices in the third year of a presidential office as well as the fourth year of the term. You can see in the fourth year, we are tracking that dead on thus far this year.

These just average out all the years, but I think you can see how accurate this has been this year. This tells us to expect strong prices for a bit here, then a dip into the actual election. After that we should get a good rally. This does not take into account party affiliations. This is blind data, what we should base things off. Since now the short term trend is up, and the cycles are up, we should be bullish. We will have to see come September 1st, how things look. For the next two weeks we should be off to the races it appears.

Good Trading

Wednesday, August 15, 2012


You think I got a mess on my hands with the PFG wipeout, get a load of this? This is pretty much what knee deep in shit looks like. Vinny likes to go swim in our pond, then come back up top and roll in just about anything he can find to roll in. He does this every day so when I come home, it is basically like washing a car because of how big he is. I have to wash my car/Vinny every day. I just thought maybe some might get a kick out of this. I have learned to laugh at myself, because you just have to get away from the stress of every day life. This is especially true as a trader.

The daily PFG update is as follows. I talked to the trustee's assistant again yesterday and it appears they are waiting on the courts to give them some direction as to the asset classes, before they can file any motions for a transfer of funds. There is no way of knowing what the delay is, but I am hoping the Sentinel case ruling is not the reason. I don't know if there is any one large creditor like Mellon Bank was in that case, let's hope not. If there is we could be looking at a 100% loss. That legal decision is beyond belief to me in this country. I think we all know judges are the single largest problem we have in this country. I would just once like to backfist one of them. I remember once in my fiery younger days, dealing with an attorney at our dog park. He was just a nasty little punk. I was always worried about popping him one, because he was always threatening to sue people in front of us.

One night however as luck would have it, my chance presented itself. I was walking my dog down a path and ran into him, with nobody else around. He started running his mouth about something when we passed, said he was going to sue me for something. I got real close to him, within inches, and asked him how he was going to sue me if he was 6 feet underground? The little wimp just ran away as fast as he could, and never gave me any lip ever again. In fact he never came back to the dog park we hung out at. The point is someone needs to have a chat or two with some of these judges. I would assume there was either some political pressure put on this appeals court, or some illicit tie to Mellon Bank. This decision makes no sense on any other level that I can conjure up. This company took segregated funds illegally, and used them as collateral to get a big loan from Mellon Bank. They subsequently defaulted on that loan. The judges have ruled then that Mellon should be in line as a creditor for assets, ahead of others including those who had the segregated money that was stolen to get the loan! Quite frankly someone just needs to beat this guys ass PERIOD. It is time not to be nice in that instance in my opinion, the system has once again failed those it is supposed to protect.

It does appear there is insurance that can be bought for protection against the PFG and MF Global situations, and I am waiting on some quotes right now. It is clear to me that things are moving in the opposite direction in terms of the courts on these matters, and I am not waiting for Congress or anyone else like the MERC to do something. I don't believe they will do anything prior to the next one of these episodes occurring. Trust me there are going to be many more. Assuming the insurance is reasonable, it is a cost of doing business as a trader. The Canadian option is also something that some IB's I have talked to are looking into. There are some draw backs to that option, so stay tuned. I will give this information out as I get it.

It does appear to me now that we are about to lift off once again in the stock market. The trend is about to change back to up, assuming this gap I have marked holds through the end of this week.

There was a small gap that is hard to see but it was there during the last move down a couple of months back, that had shifted the trend to down. Now it appears we are about to shift back into up mode, so this trend method got whipsawed here. It happens. This is not a trading system, it is just a way of determining what side of the market to trade. I then look to shorter term things to make actual trades. In this case the only short I took was that Russell trade I showed the other day, that wound up a scratch. I just never had any of my sell patterns show up, which is why I do this top down approach. The second level of filtering saved me from losing money here as this market has taken off again. We seem to be back into this light volume, PPT controlled, up drift. This light volume is heaven for the PPT, it is so easy for them to make a save when it is like this.

I have been looking to get long Silver today, but it does not appear now that my orders are going to be filled. This is such a large range that even if we go up to my entry price, I am going to try and enter on a retracement. Often I miss trades doing this, but I have to get my risk lower than I used to for obvious reasons.

The Bond Trading System has been quiet the last few days. For those trading it be patient, this does happen from time to time. We have had a gangbusters start, so just be patient.

The reason I said Euro's rule in the topic was just alluding to the accuracy of the EURO Commercials in predicting our stock market. They nailed it once again, INCREDIBLE. I think in all my years of studying the markets, that chart and it's predictive power, is the most befuddling thing I have ever come across. There is absolutely no reason why that should work other than some incredible intricate tri-lateral commission type of conspiracy theory. Even that doesn't explain this to me due to the one year lag.

Good Trading