Thursday, January 24, 2013


I am back in beautiful bankrupt Southern California after having moved my father into a retirement home in Michigan where it was 7 degrees below zero the last night I was there. It was a blizzard the day of the move and I had one of my sisters who is a well acclaimed orthopaedic surgeon barking at me all day about how I should not be picking up the furniture the way I was. The truck driver threw out his back so it fell upon me to get it done. I am not a whiner so I just went at it and had a blast. It was a classic barely being able to see the truck as I carried pieces of furniture out of his house to it, my sis served as the tour guide making sure I did not bang into anything. I was a blast doing it in the snow I have to admit. Overall however the trip was a difficult one mentally and emotionally. I always thought we would keep the house in the family forever but now it gets sold and going through 40 years of memories has its ups and downs. My apologies for not posting, I had no time to do so. Some of you have found my elephant man video on You Tube which was recorded when I was back in Chicago last year. Have at it if you want but I can tell you from sitting in the chair with a huge stanchion of lights blinding me and not even being able the see the interviewer, it makes me look 80 years old and I still look like my picture on this blog which was just an Iphone camera shot from a few months ago. I can't explain why I look so strange is this video.

As I mentioned in a prior post the ES short got stopped out for a loss and the question becomes just how far can this go? Whenever I want a negative story I shop at Zero Hedge and found the below article which is great in terms of its detail on the FED and what it has been doing. I have to tip my cap to him, he does incredible research and cranks out one detailed story after another. 


The mistake most people make and I made it myself when I was younger, is getting tied up in arguing with a trend. If you look at the chart below, there is absolutely no reason of any kind to be short this market from a position stand point.

We are just creeping up day after day after day, there is no trigger that I can see saying to be short. We do have a big divergence forming now between Bonds and Stocks which will at some point create a problem, but it is not severe enough yet. I can promise you if you get in a habit of just trying to fade moves like this you are going to find some trouble. 

The most important thing to keep in mind about this market environment is the following:

It is being solely driven by the US Federal Reserve not fundamentals

As a result, stories like Apple do not really matter because that is a market fundamental. These do not apply at the moment. That is why you saw this huge reversal. Even if fundamentals were driving the market you have to wait for the price to confirm the story which has not happened yet. I have told Newsletter readers to stay long through all of this and given specific exit points if we hit them, so I have guided them correctly. There are a couple of very widely respected traders calling for a sharp down move to begin at any moment. Far be it for me to question this, and it would not shock me if it did, but I don't see it at the moment.

Tom Demark who is most known for his Sequential price reversal concept, is one of these guys calling for a top. I have at times used his Sequential indicator and I do think it is a good tool so seek it out and study it if you wish. He is a very bright guy and he has made several tweaks to the original concept over the years. I do not know all of the enhancements. However, I do know that any tool has to be adapted over time to changing market conditions and this is no different. I watched a video that seemed to state he wanted to see a new high first before calling the top, but I don't want to put words in his mouth.

This January steady creep up is something I have seen before, so I am not stepping in front of it other than if my mechanical system spits out a trade. With those I just follow the rules like a drone and it just steered me wrong on one as I stated earlier.

For now I am not too eager to short this.

PFG Update

There is a conference call with the CCC on this tomorrow where PFG will be covered along with MF and also the recent board appointments of the CCC guys to the NFA.

I will not be listening in any more. I am moving on as if I will not see another penny and the loss will be 70%. It appears now the judge is rejecting motions for rulings on things so it just feeds our money to the attorneys, which is the point of the whole process anyway. It is not and will never be about the victims. The only way it will change is if we get enough money leaving the country that it has a financial impact, but most people will just take it on the chin and move on mumbling under their breath. I am not one of those people and I will get my money out of here as soon as I build it back up.

It is a good thing to have these guys on the board but the reality for me is that it does not matter. My money has already been stolen, my life has already been changed. All this bullshit after the fact PR crap to make us feel "sure" that it won't ever happen again is just that, BULLSHIT. Many of the victims don't have any money now so what the hell good is an insurance plan to them? What is always lost in these situations is the victims in most cases lives have been ruined forever and any future legislation means jack diddly squat. I have survived it but many have not. Part of my plan at getting back if it is successful, would entail getting what I can back to some of these people who have not survived this. Unfortunately I am not in a position to even launch the plan yet. I may never be able to launch it, I am going to need really deep pockets when I do it for legal fees.

For those victims still following this closely I would recommend listening in, these guys do have the best information on the case.

I am back to regular posting again, thanks for reading.


Anonymous said...

Chris, good post.
If you decided to leave the USA, what country would you emigrate to? I've been thinking similar things and would appreciate your viewpoint.

Chris Johnston said...

tough to say Canada is the best place for safety of funds in trading accounts but not sure. I have to make back all the money that PFG stole first so I am stuck for now

Anonymous said...

Thanks for the reply. For my part I'd look at:
- Canada
- Australia & New Zealand
- Singapore (interesting that Jim Rogers lives in Singapore)
Anyway hope it all works out for you, I reckon it will.

Chris Johnston said...

New Zealand is also on my list but a move like that with all my animals is almost impossible to make. We know in the US as long as the Dems are in control they are going to keep raising taxes up and up and spending more and more, so we know the end of the movie. California will likely go well into the 70% + range for total taxes before this is over for top earners. It is already 63 as per Phil Mickelsons comments