Friday, March 29, 2013



Since I seem to be alone in my forum here about my views on the Cyprus situation, I thought the dissenters might want to rethink their views based on reading this above article.This is the exact point I was making, there are plenty of regular people getting hurt including this business that was shut down. In the end this is so similar to PFG and you people need to wake up. In fact the numbers in this are not too far off from mine from PFG. At this point I have only 30% of my money and it appears no more is coming for at least a year or more from now. I was already affected this dramatically, but ironically this pushed me into a business offering the services, and that has worked out very well for clients so far with them being very profitable. The saddest part of all of this and also the brilliance of those who are doing this makeover of the US is this. They have been able to create a small majority who relish in someone like this being ruined. Now it is a bad thing to have had $800k in a business bank account. That money should be taken from him anyway and given to others less fortunate. How dare he have a business and employees? It is unfair that he had 800K and we need to take some of that from him. After all if we are bus boys we are hard workers too why shouldn't we have some of his money? The reality is he will take his jobs elsewhere as he should. I think even though I don't like it at all, that this plan to makeover the US into this type of collective thinking is brilliant. This is why I maintain that the last election told us the collective will of the US has been changed for a very very long time. Reversing this type of thinking is almost impossible.

It is a far cry here in the US as compared to Cyprus in terms of something like this coming ashore, but let me throw out something else that is going on here I found out about yesterday. I had lunch with a friend of mine who has a close friend who owns many things among them a gun store in Arizona. A funny thing happened with the gun store owner and our precious government. The government came in and bought all of their ammo, every last bit of it. They gave them $1.6 Million and told them just to store it. I had heard something about his on the news the other night and just brushed it off and I should not have. Since they cannot get guns outlawed they are going to use tax payer money to buy all the ammo. This type of thing should scare the you know what out of all of us. It is starting to appear that people who were labeled as extremists who have been talking about the government take over of our lives are nothing of the sort. They are telling the truth. I guess I have been naive, I did not realize the level to which they are going to transform us. There is one guy that is a bit goofy, but he has gotten virtually everything right in advance, Glenn Beck. It is amazing that a guy with his background would be this dead on accurate about things. I am not sure his solution which seems to be just pray to God is really going to work, but I am starting to listen to him now. He talked about the gum ammo thing a long time ago, as well as many other things. I am not saying I subscribe to everything he says the point is just that he has called in advance virtually all of the bad things that are happening, and he has been kicked to the curb by the main stream. The last part is the reason to listen to him. I know liberal readers will go ballistic over this but I am not so sure this is that much about politics any more. This government take over is about power more than ideology. I listen to left leaning people all the time trying to understand their views, if you lean left listen to the right, you already know what you think so you don't learn anything listening to the same views. I am the same way, I get annoyed some times listening to the conservatives, it is just blah blah, stuff I already know. I want to hear the opposing views, maybe I am wrong? At times I have changed my views from doing this.

How does this tie into Cyprus? When you look at governments around the world if you throw out the dictatorships ( although that could almost throw us out now ) you see that most of them are doing the same types of things. Do you really think banking is done that much different there than it is anywhere else? If you look at the ratios in US Banks, the real ratios, you will see that the reserves they have measured against the exposure in bad loans, is almost nothing. If even a small percentage of the bad loans go bad, they do not not enough money to cover it. In the end where might they go to get it? When you are delivering bad news to people it is always best to ease them into it, that is what is happening here. We are being eased into thinking all sorts of things, including it being ok to steal people's money in a bank, is an acceptable option. I think you are kidding yourself if you really are not concerned about this.

I think the best plan is to spread things way out, cut your exposure to any one place. Try and find banks that do not have much real estate exposure, and be prepared to take a hit of a 100% loss in any one place or perhaps more than one, and have it not be a game changer. If you think about it, these people had no reason to believe this was on the verge of happening. If it came to us here neither would we. We would be lied to until the day it poofed. The CFTC lied to us about PFG and the other FCM's but that is okay apparently. I have no idea if this could happen here but I have learned the hard way never say never.

I want to address the Trading School portion of the Newsletter for a bit here. I know from the feedback that a lot of you are excited about some of the things we have been writing about which is great. This is the whole intent of that section. However, I want to tell you what not to do with this techniques.

When I first started out trading and even to this day, I have one bad tendency that I am aware of. When I find a technique that works really well I tend to overdo it. One of my favorite phrases in life which is a quote from my wife's brother is " anything worth doing is worth over doing." Unfortunately he uses it to justify being a drunk, and it is an equally bad idea in trading. I just like the phrase because I think it is funny. Most of us are very passionate about trading and it is why we grind out the process day after day. The techniques we taught over the last two months with ADX are seemingly very popular, and they should be. These are valuable tools. What you don't want to do with these is go crazy trying to fade every trend move when these reversal indications start to develop. I am going to eventually do webinars on these types of things but there is only so much I can do each day, so it may be a while before I can get to that.

The single best trade to make is the first one you can catch once a trend has changed, it is what I call the lowest common denominator. Here is a chart that shows this basic idea.

What that last phrase means is basically your lowest risk trade. You can see in the Crude chart here that the best trades were right where I have the green highlight bars or red after they have changed from the opposing color. These are proprietary trend change indicators we use, they don't all work this well. However, in the service we knew when we got stopped out on the short in Crude we had a trend change happening so we definitely wanted to reverse and go long knowing this was the lowest common denominator for a long position. It was the first possible entry. There was one losing trade that would have occurred at the lows before the first arrow where you can see we shifted from long to short and got whipsawed. So this idea got 3 out of the 4, not bad by my way of looking at things. 

Do not bother asking what these highlight markers are we are not going to divulge those at this point. Blogger is striking again it won't let me left justify here so I am going to cut off this post here. The main point I want to make is that use the tools we teach, but don't go crazy with them. The ADX techniques work great but they work best when combined with some other type of indication in the price that the trend has changed. I do not just blindly fade market moves just because those patterns are developing.

Happy Easter Holiday to everyone

1 comment:

PD Quig said...


Your buddy that owns the gun store ought to pull a PFG / MF Global and sell the $1.6M in ammunition but "rehypothecate" it to other purchasers. He could tell the government that they still have a claim on the inventory, but that it might take a while to get it back to them. In fact, those who work for government may end up collecting the ammunition one bullet at a time. :-D