tag:blogger.com,1999:blog-277843162024-03-13T08:35:58.425-07:00I AM A FUTURES TRADERChris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.comBlogger1151125tag:blogger.com,1999:blog-27784316.post-39585291503700298092013-04-27T10:58:00.001-07:002013-04-27T10:58:44.769-07:00OUR NEW WEBSITE IS UP NOW WHERE THE DAILY BLOG ENTRIES ARE ON THE TOP LEFT PORTION OF THE HOME PAGE, PLEASE GO THERE FROM NOW ON TO READ MY DAILY COMMENTARIES.<br />
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EXISTING CLIENTS, BEAR WITH ME THE SUBSCRIBER ACCESS PORTION OF THINGS IS NOT DONE YET AND THERE ARE SOME OTHER TECHNICAL ISSUES REGARDING POSTING COMMENTS WHICH WILL BE RESOLVED IN A DAY OR TWO. I GOT TIRED OF WAITING AND JUST WANTED TO LAUNCH IT AND ADD/FIX IT AS I MOVE ALONG.<br />
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THERE WILL BE MORE VIDEOS AND ADDITIONAL PAGES ONLY AVAILABLE TO SUBS SO JUST GIVE ME A LITTLE TIME. THE LEVEL OF SERVICE HERE IS ABOUT TO GO WAY UP.<br />
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I KNOW PEOPLE WANT MORE AND IT IS COMING NOW THAT I HAVE A DECENT PLATFORM TO WORK FROM.<br />
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THANKS FOR YOUR PATIENCE<br />
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<a href="http://www.wearefuturestraders.com/"><span style="font-size: large;">http://www.wearefuturestraders.com/</span></a><br />
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<br />Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com3tag:blogger.com,1999:blog-27784316.post-46709832029625044992013-04-25T22:09:00.002-07:002013-04-25T22:09:51.815-07:00<br />
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STOCK MARKET SELL SIGNAL - ONE LAST</h2>
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CHANCE</h2>
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The above chart is the Bernanke 500 formerly known as the E Mini S&P 500. I have a very short term trading system I have been working on that enters at specific spots and exits on the first profitable opening. For Friday a trade is indicated one tick below today's low, it is a short entry. This system has no bigger overall significance, it is just a short term trade designed to get in and out very quickly similar to the Bond System. Most of my other techniques designed to catch more swing types of trades have turned up enough to negate a short entry. That situation could change in a few days but for now it is a no. What I am left with is just this short term system trade in terms of trading a short in this market.</div>
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We are getting nice relief rallies in the metals after the recent meltdown. One of the old adages is support becomes resistance, so if that is true the 1530 area should provide a good selling point for another leg down. It is a commodity just keep that in mind. Technical indicators have to re-cycle after you get a move as big as that because they get stretched to levels rarely seen. If you trade using them study what happens with them when these extreme short term moves take place. I think you will find that they give a lot of false signals following time periods like this.</div>
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Getting back to the trade above, you can see the momentum divergence that has been building with now a large 3 point divergence in place. There have been quite a few false setups like these since the FED took over the stock market so it is tough to have any strong enthusiasm about this divergence which in normal conditions would be meaningful. The trading patterns in this market are so odd now that I don't know what to make of them sometimes. We go through periods where the volume just falls off a cliff then out of the blue accelerates quickly. HFT they cry, perhaps, but that does not explain the periods of no volume in my mind. I wind up not trading this market as much as I used to because these patterns are so screwy my trades don't setup as much in the indexes.</div>
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Here is a general look of the Gold resistance setup.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com5tag:blogger.com,1999:blog-27784316.post-21204923114823837902013-04-24T18:15:00.001-07:002013-04-24T18:15:51.473-07:00<br />
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<strong>STOCK MARKET BREAK OUT OR ROLLOVER?</strong></h2>
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We have bounced enough now where we have taken me out of my ideal setup for a sell in the Bernanke's. All we are is one more bad economic report away from a new high. How ironic is it that we need bad reports for stock rallies? If you keep in mind who is doing the buying it makes sense and we have to keep that in mind at all times. It does make trading the stock indexes very difficult, it is essentially a completely bogus market at it's core now. That flash down and reverse the other day on that twitter skit was really interesting. I think the complete lack of volume tells us that many people are just elsewhere where the markets are still somewhat free of direct manipulation. If you insist on being a 5 min chart ES trader best wishes, that is just impossible in this day and age.</div>
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What I am looking for now is for us to move sideways for a few days to see what happens. We could just take off again, the short term things I use are now mixed. I do have the one component above that is bearish still showing a potential roll over in the price momentum, yet basis the ES we are almost back to the highs. My other two things I use have both turned up too much for a short right at the moment. There is nothing for me to do here right now. I did get popped on my B of A short for $400 on 1,000 shares. The problem like I have mentioned so many times, is trading individual stocks is almost pointless, they all just match the Bernanke's and are less liquid. When you get an ES rally like this most of them just go up right with it.</div>
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There is talk now of this great GOLD SHORTAGE and runs on the mints etc.. Has anyone questioned this at all based on the fact that the futures markets have not moved? Who do you think these buyers are, Small spec types or Commercial insider types? This is akin to a huge buying binge by small speculators in my view. I suspect this is a pump and dump scheme hoping to ignite a futures rally so those who know now they are stuck can get out a little better. The whole thing just seems fishy to me, but I could care less I trade on technical things not this kind of stuff. My general feeling is this it the dumb money buying not the smart but who knows.</div>
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<strong>WEBSITE</strong></div>
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I am hoping the new web site is going to be up any day now so I am dual posting in it and the separate blog. One day this week you are going to check in to the site and viola it will be the new one. This has taken so so long I am going to get it launched and make it what I want it to be over time. It was supposed to take 6 weeks and it is now more than 4 months. I do not have everything exactly as I want it there since time is short for me at the moment. The pay for services section is not setup correctly yet and it is something I have to figure out and will try to do that ASAP. I do have some videos loaded which I will build upon over time. The daily signals are still going to have to go through Aweber like they are now until I can test the lists I have imported to make sure they are all correct. Once I have done that the signals will be in the web site each day so you will be able to just log in and get them. I suspect it will be a month before we get to that point, but will try to get it done faster.</div>
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At this point people have seen the changes in the Swing signals and how long we are staying in the trades. We have been in one for 14 days now and another for 7. The markets have been somewhat choppy and that is typical after you get sharp moves in things. There is a natural cycle that takes us from smooth to choppy and back which is frustrating. I try not to press too many bets and stay patient when I think the circumstances are not as favorable for runs. I do not always get it right</div>
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<strong>PFG</strong></div>
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This would have to fall into the who gives a ... category. There is no news of any kind I know of other than what appears to be all sorts of people selling their claims to the bad debt firms. At this point it is probably wise to do that because there is no time table for any other distributions, a corrupt judge who is taking a long leave of absence, and a general who cares attitude about things. It does not appear to me any more money will come back to any of us this year. Waiting an additional year just to get maybe another 10% beyond what you could sell for now is probably not that smart, but it is what I am doing. I think this is what happens in most of these cases, you get an initial wave, the reporters go nuts, then eventually they move on to the next Brokerage firm Corleone caper. We have had 5 stories now since PFG of shenanigans with Seg money, FIVE! Some of them actually occurred at the same time PFG did, but the people were not caught until later, then fined. This should confirm what I have been telling all of you, this is going in everywhere and it is a matter of time before another one crashes. If you have not done so split your money up to protect yourself. Also look at the lag time involved in them being caught. Remember if they go down at any point even if it is a day after they do something, your money could be completely gone or tied up in court for years. Catching them a little faster means nothing for getting your money back. Once it poofs the process starts.</div>
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If you think Uncle Sam is looking out for you prepare to be disappointed.</div>
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Stay patient maybe the beginning of May with it's seasonal bias to the down side will bring us some action.</div>
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Good Trading</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com0tag:blogger.com,1999:blog-27784316.post-58898580018997908462013-04-23T22:04:00.002-07:002013-04-23T22:04:56.406-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">DOLLAR LOOKS LIKE THE INVERSE OF GOLD</span></b></div>
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While I was perusing the charts tonight I came across the Dollar Index and thought it was eerily similar in an inverse fashion to what Gold looked like recently. In this instance we have a triple top where Gold had a triple bottom. What this could mean is that if we get clear which normally happens on a 4th test, we could take off. There is however, one major problem that I see with that scenario.</div>
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We have a significant Commercial short position and high open interest, right at the triple top. We are also following the seasonal very closely so in those instances it matters. We have conflicting information here. The other development that is interesting is the way the Dollar has re-attached itself to the stock market. I say that because that is the way it used to always move. It was only in recent years that it developed this inverse relationship with the Dollar Index.</div>
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In situations like this I think it is best not to guess. It is also symbolic of this conflicting scenario that the price action on the daily chart is so choppy. I don't think there is any point in trying to push something in this instance so I am looking elsewhere. Even though this is similar to the Gold market flipped upside down, I don't think the level is as well tested as the support level in Gold was. As a result I don't expect to see the same type of break of it. I think if I had to pick I would prefer to see a sell setup on the daily chart as opposed to a buy.</div>
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<b>EARNINGS SEASON</b></div>
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I was thinking as one report after another came out today magically once again beating the estimates by 3 to 5 cents, what an incredible coincidence that is always is. I want to make sure I understand all this correctly. We went through a tough period where one of the outcomes is that the CEO and CPA firms had to sign off and take responsibility for the reports. We added all these regulations to make sure no funny business was going on. Now we get into earnings season during what should be the most transparent time in history and magically after the "full disclosure" conference calls where the result should be that the estimates closely match the earnings reports that so closely follow, yet all these wonderful magical surprises happen. As my cousin Vinny would say, let me ax you dis? How exactly are all of these wonderful magical events taking place at all these companies from different industries, where they all unexpectedly beat the earnings estimates while at the same time being honest throughout the process of discussing how their business is doing?</div>
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This is beyond a racket folks, BEYOND! There is not one single thing that has changed. Keep in mind Price Waterhouse did the books for PFG in the past, during the time the fraud was being committed, yet they are not investigated at all and are even hired by the bankruptcy court in the PFG case at outrageous hourly rates, to investigate whom exactly? Themselves? This insider game is never going to change ever.</div>
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The ES bounce today puts us up into an area where we are close to lifting off again. If the decline is going to happen it seems to me we need to hold in this area, then turn down</div>
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Good Trading</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com0tag:blogger.com,1999:blog-27784316.post-64489199006381682232013-04-22T20:07:00.001-07:002013-04-22T20:07:49.180-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">BANK OF AMERICA REACQUAINTING WITH AN OLD FRIEND</span></b></div>
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Now that I am in the process of building back up again it is time to re-start my quest against one of the dark overlords B of A. I have labeled via a rectangle what I deem to be a momentum rollover that is taking place in this stock and have labeled the sell zone I am aiming for. Since almost all stocks are basically the same as the indexes with a few exceptions like Apple etc, we are getting a little bit of a bounce in this stock along with the Bernanke's right now. I view this as a little weaker than the Bernanke 500. I have recently had another unpleasant dealing with these people so now it is time to go after them on the short side again.</div>
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I was never really able to mount my initial attack on them because of PFG and I had to use the money I had set aside to attack them to survive. I was very fortunate to have set that money aside and not had it exposed to the thieves of the world otherwise known as FCM's. It enabled me to be able to still pay my mortgage and bills while the money has been frozen, and also open some new trading accounts to start trading again. However, I was reminded once again of why I hate them in a recent exchange so time to go on the attack once again. I do think this is a pretty good setup, so it is time to get to work.</div>
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My short term momentum indicators are going up in the Bernanke's so I am looking for a bounce for another day or two hopefully setting up a short entry there.</div>
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I have spent the last few days copying and pasting the blog entries from my old blog to the new website and formatting and changing image sizes etc which has been a pain in the ...... What it means is I am close to game time. Once I launch it I want to do a webinar for existing clients just as a get started type of thing so I will send out a notice for that once I am ready. I hope I don't botch the technology the first time so cut me a little slack.</div>
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I think the Bond market is looking interesting right here.</div>
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We have momentum going up sharply here and a rising wedge pattern which can break either way. I am leaning toward an upside breakout because I am looking for stock sells and also the momentum is going up strongly here. However, some of my other tools show if we were to break down they roll over. I guess the net of this is a breakout in either direction can be played. I guess I can't come back and say I told you so on this one, but I just wanted to point this out. If we do happen to break out to the upside on this, I think it could really go.</div>
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The next few days could be interesting.</div>
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For those who got my video I sent out I think the consensus is that the audio level was fine? I had a few people tell me it was too low then come back and tell me the settings on their computer were off and it was fine. The volume sounded fine on my end when I previewed it.</div>
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Good Trading</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com2tag:blogger.com,1999:blog-27784316.post-4527345101855687542013-04-19T20:54:00.000-07:002013-04-19T20:54:05.034-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">GOLD CAPITULATION?</span></b></div>
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I don't know how I got on the email lists but a few Gold bugs hit me with the Capitulation skit links last night. Is this Capitulation?</div>
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I think there is no question from a short term viewpoint it is. Essentially what this means is that there has been a huge climax of action with a dramatic price change, which this qualifies for without a doubt. Could this be the low? Sure it could be. Newsletter readers are going to get the full monty on this from me this month, so I will not get into too much detail here. However, since I am not biased one way or the other on this from a short term standpoint I thought it would be worth addressing this idea.</div>
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This typically occurs when the last remaining person throws in the towel and exits the trade, which results in either a huge wave up or down as people rush frantically in an emotional run for cover type of situation. I used to always lay in wait for these times and try to fade them. <b>USED TO</b>.</div>
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I like to make money just like the next guy otherwise I would not be trading. I found it impossible to be consistent trying to fade moves like this. You can see from the MACD how dramatically it fell to what has to be it's lowest reading in years. This is what you get at these points, so far so good. Often it will be accompanied by the other side who has been warning of this now chiming in saying I told you so ( yours truly included in this group ). Check mark number two. Here is what is missing with this whole idea from a longer term view point. The pushers of the original idea that has become jeopardized are typically the capitulators which has not even come close to happening. It is when the greatest promoters of the wrong idea give in that the true capitulation has taken place and these guys have not missed a beat. They are pounding the table about a generational buying spot. Buy the mining stocks, physical gold has record demand, this sell off is only in the paper. Huh? The spot price is not paper ladies and gentleman, it is the price you pay to buy a bar. It is when these people admit they are wrong and sell that the real capitulation will take place.</div>
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What we have so far are some of the weak hands realizing they are getting clobbered and as a result running for cover and taking their losses.</div>
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The other thing that normally accompanies a capitulation point which is not here is we are typically at multi-year highs or lows, not in the middle of a range of pricing like we are here. Net net here I think even though we certainly have very strong price action that resembles capitulation, it is not occurring at a spot where that would take place which would be probably $400 or less. It has to be at a spot where the Gold bugs are selling for true capitulation to be happening. From a short term stand point we could very easily get a big rally here but the trend is down and it is a selling opportunity when it happens. It may take a while because you have to give some time for a condition like this to work itself "off." There is no doubt we could rally way up and change the trend from down to up and the Bugs could still have their day I do not know the future. The COT data does show this as a buy more than a sell but as you will see in my video at the new web site, these are the COT setups that are not very reliable.</div>
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The other assertion is that the fundamentals have not changed. I completely agree with this take. The fundamentals have certainly not changed at all. If anything they are closer to being in line with price as it comes down. This move was a speculative move in a commodity, it never had any attachment to any fundamental of any kind. The fundamentals have been saying this would not last, so they have not changed. I agree with the Gold bugs on this one, although in a way they would not like.</div>
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It looks like we are going to get my bounce in the Bernanke's next week at least at the beginning of the week, so we could get a great sell signal right around May 1st which would be "extra good Mr. Coleman sir" a quote from trading places at the end for those who don't get that. Look for the point where the Gold bugs start crying foul and selling out claiming government manipulation etc around $400, that will be capitulation if it happens.</div>
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My web designer just told me I have to manually move over a number of blog posts to the new site so this is going to cause yet another delay, good lord. It is a small detail that they were supposed to do this. Thank god they caught the second scumbag in Boston. If I had my way I would torture this guy like nobody's business if he did not talk, but I am sure the pansies in government will recite poetry to him hoping to break him.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com5tag:blogger.com,1999:blog-27784316.post-77354239815579388962013-04-18T19:45:00.000-07:002013-04-18T19:45:39.265-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">TRADING PSYCHOLOGY</span></b></div>
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I have been asked often about Psychology and what books to read. Here is a somewhat detailed reply to that keeping in mind obviously that all of our personalities are different and I am relating what works best for me.</div>
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First of all there is nothing I know of that tugs at your emotions more than the business of trading. Most of us are not conditioned in a way that accepts failure well and there is no way around failing during certain periods of time. As a result one of the things we have to do without question is check our ego at the door. If you can't find a way to do that you need to go elsewhere for your riches. However, at the same time you have to be confident in what you are doing to get you through the tough periods. How exactly to you achieve that balance?</div>
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I think it is helpful viewing this business like other businesses. For example, Many companies have loss leaders, products they discount heavily to get people to do business with them in the hopes that they will also purchase something that has better margins in it. A restaurant might offer coupons for free deserts etc, or maybe a combo meal. The hopes are that once you are exposed to them you become a regular customer and the whole process works well in the end. That is a sound business strategy but also you have to realize that during periods of time you are going to net lose money doing it. You undertake this with the idea of the bigger picture.</div>
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The way this relates to trading in my view is that often when we are watching a setup for a price move, we may have to probe a few times getting stopped out attempting to catch the move. When we do finally catch it we make up the money in spades. This is not easy to do emotionally because we are losing money in the probing process hoping for the larger picture gain. I don't see that as any different than the restaurant example. As hard as it is to do since we all trade to make money, you can't focus on the money aspect of this. You instill money management controls to stop you from losing too much while probing, and that needs to be enough.</div>
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If we think about our Bond System, it is a real life analogy of this. It was like opening a restaurant with a good buzz where many people come on based on the reputation of the chef ( yours truly ). The food was fantastic for a good stretch then all of the sudden there was a month where some of the specials were not as good. Do we just ditch the restaurant or go back to the menu items we have always loved? This may seem a little goofy and perhaps there are better analogies, but I think you get the gist of this.</div>
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I remember when I was studying with Kevin Hagerty many years ago, who is an ex-marine and one tough and rough character. When asked about psychology his response was always if you can't take the heat get out of the kitchen. He did not believe in reading a bunch of books written by people who don't even trade, trying to teach people the psychology of trading. I agree with that premise. I remember someone telling me after PFG that I should go see "someone" to help me get through it. What the hell is some pencil neck going to tell me that I don't already know? There have been times when I have been so angry about it the thoughts I had were almost shocking and it is fortunate that I was not face to face with anyone involved at those times. This is natural, why is that a problem? Man up sometimes you feel like kicking somebody's ass and sometimes they deserve to have their asses kicked.</div>
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I remember the other day a friend of mine telling me that her husband had been really sick for a few days and did not get out of bed, and she said "maybe you are not like that but you know how guys are." Actually I don't. First off I can't stand her husband he is a pansy of the first order and a complete tool. I have not even had a cold in at least 10 years because of my nutritional and fitness regimen, and perhaps genetics. However, the times many moons ago when I did get them I never missed a beat. I also broke my ankle in a martial arts tournament a long time ago and walked on it for more than a week before it finally swelled up so much it split a pant leg so I gave in and went to a doctor who greeted me with laughter calling me "one of those guys." My view is that you suck it up and get on with it. If you have to hack up some flowers like Bill Murray did in Caddyshack to blow off some steam.</div>
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When it comes to psychology I don't make a big deal of it. This business is very challenging but so are many other businesses. At times other businesses lose money also. I think drawing the analogy and keeping it mind might be helpful. It makes you realize you are not alone, it is part of the business cycle, and you have to learn to deal with it. You don't have to lay on a couch like Daniero did with Billy Crystal in Analyze This. I remember the one line out of the movie that is one of my all time favorites and one that applies here. "If I go Fag you die." There is also a line out of a movie called Old School with Will Ferrell and Owen Wilson right at the beginning that is similar. The point is you have to deal with adversity in this just like anything else, so just deal with it.</div>
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FCM CORLEONE'S</div>
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There is another story out there regarding FCM's screwing around with Segregated Money, The Linn Group. Here is the link:</div>
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<a href="http://www.cftc.gov/PressRoom/PressReleases/pr6570-13">http://www.cftc.gov/PressRoom/PressReleases/pr6570-13</a></div>
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Here is the most important thing to keep in mind. MF Global was a clearing FCM hence the Merc was involved and put money in to help make clients whole. PFG was a non-clearing FCM hence was not under the supervision of the MERC and the MERC basically said F you. When you have a non-clearing FCM like that basically one person somewhat outside of the process has control of the money. This is how the thefts can happen so easily. The head of the firm can order some employee to do something and chances are they will do it even if it means doing something that is not right. I think the best rule of thumb is to not use an FCM that is non-clearing. This will not guarantee you anything but it does put you in the best possible situation. I think Linn is a non-clearing FCM but am not 100% sure on that. There is another firm out there that people have been asking me about. I think if you check you will find they are a non-clearing FCM. This does not guarantee anything other than if they go down the MERC will claim they did not supervise them therefore screw you like they did with PFG. One of the big reasons MF Global worked out so well is that the MERC chipped in a huge chunk of money. They won't do this when a non-clearing FCM goes down.</div>
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<b>Back to the Bernanke 500</b></div>
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Here is how things stand now as of Thursday evening.</div>
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I have mapped out once again my scenario I through out in the prior post with a different look added. What this shows is a long term measure of momentum and what it would look like if it rolled over and we got a rally against that roll over. This gives essentially a first retracement entry which can be very powerful. I always want to get in as quickly as I can once I identify a trend change. I am hoping this sets up like this.</div>
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Have a great weekend and thanks for reading</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com1tag:blogger.com,1999:blog-27784316.post-89842679037268304232013-04-18T12:30:00.001-07:002013-04-18T12:30:18.296-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">STOCK MARKET TEETERING POSSIBLY?</span></b></div>
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I will get to the Stock Market in a minute but first I wanted to show a setup in Natural Gas that is worth watching. What we have going on here is what I refer to as a COT Double Top. What this entails is a equal high in the price where the commercials have become heavy sellers trying to potentially contain the price level at hand.</div>
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What is also happening here is that we have a very sharp rise in Open Interest that is comprised completely of Small Specs and Large Traders. The commercials are not buying they are selling on a relative basis and heavier than they have in years. This tells us that basically the volume drive is not from the biggest players and as a result I am looking for reversal patterns up here. This is a setup not an entry. The trend on the daily chart is clearly strongly up, so I won't get into fading the trend until I see something telling me there is a trend change happening that ties into this weekly setup. We may not get it and could sail merrily along. If we do happen to break through upward out of this pattern we could see a huge run up here. This is almost the inverse of the Gold situation, where in that case there was huge support that held, held, held, then broke and the bottom fell out. This is that upside down more or less.</div>
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I just checked into Blogger to check comments and found my whole post for today disappeared and was not even in the draft folders. What I had talked about was the short term sell signal I twitted about the other day, how it had triggered and what I was looking for. Since this is now a bit late to the dance, here is the chart I had in here that disappeared somehow.</div>
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This shows an ideal path for us that we may not get but it would be nice if we did. We are getting the short term support break which does not necessarily have long term implications beyond just the next few days, but it is one small red flag that something bigger could be in the works.</div>
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For now the sell below the low of Tuesday with a first profitable open exit, is the quick short term profit trade I was mentioning. Any open < 1542 in the ES would be the exit. Let's hope we get this break and bounce scenario because if we do I will be a player. This market is the most manipulated market in the history of trading so the setups have to be just what I want to play them.</div>
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In the wake of the Gold wipeout as everyone scrambles to find an answer like the Keystone Cops this gem was on the web. Had anyone been reading here for the last year they would already have known this.</div>
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Here is a quote I had also put in the earlier post that poofed that I found amusing in a Gold Bug site:</div>
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As Gold Prices Collapse, Investors Seek Answers</div>
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Daily Ticker - Tuesday, April 16, 2013</div>
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<br /><br /><br />It's the oldest market pattern in the book.<br /><br />A long-ignored asset finally gets hot, and its price rises for a while. The rising price of the asset attracts new investors, which drives prices even higher. And as the price rises, investors develop compelling explanations for why that's happening, only some of which may have a solid basis in fact.<br /><br />The price continues to rise, more investors arrive, and their buying drives prices even higher. Soon, the stories that explained the early price increases get repeated so often that they start to be regarded as fact. The price rises even further. More investors hear the stories and believe them, and hurry to get in on the action. And so on.<br /><br />At some point, however, for any of a number of reasons the spell breaks. The "story" hasn't changed, but demand for the asset no longer outstrips supply, and the price drops.<br /><br />At first, investors brush off the price drop as a temporary fluctuation--a "buying opportunity." Then, when the price drops even more, they look for temporary explanations and causes. They often begin to point fingers--blaming individuals, organizations, or conspiracies for the price decline, anything but the theory that the "story" they bought into might not have been true.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com2tag:blogger.com,1999:blog-27784316.post-45138423207557287912013-04-17T06:52:00.002-07:002013-04-17T07:22:27.138-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">GOLD BUBBLE NOW WHAT? WILL THIS BRING STOCKS WITH IT?</span></b></div>
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It is now time for all sorts of experts to come out and explain why this huge decline took place. The bearish people have one story and the bullish people have another one. There was one in particular that was made about some looming huge default of something or another. I have been asked what I think happened?</div>
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What happened is simple, the market was in a down trend and it had an expansion of price and volume in the direction of the trend, exactly what we should expect to see from time to time. There is no doubt this was one heck of a move, but it was in the direction of the trend, so from that stand point it is business as usual. One of the things people need to learn and it takes time and some lumps like this to learn it is, you need to trade in the direction of the main trends. You will not always be right, but what you will get is the larger moves.</div>
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For those of you who are reading desperately trying to understand "what went wrong" you are wasting your time. Let's say you finally find the one MIT grad who truly turns out 20 years from now to be the guy who identified some exact intricate pattern that triggered this acceleration, what good does that do you? Wouldn't you rather be a dumb ass who just knew the trend was down and knew nothing about fiat currencies, stores of value, Jim Rogers, etcc and was just short the market because you did not know any better?</div>
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I did see one story that someone sent me a link to where one gold bug actually admitted Gold is really just a commodity and it is not a store of value. LOL! Of course, that is what I have been telling people. Think about this and look at the next chart. What about if you knew Gold was a commodity that generally but not perfectly tracked the stock market. You were in the year 2002 where Stocks were completely out of favor and you wanted to go long stocks. Wouldn't it have made sense to the simpleton to have bought Gold?</div>
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<span style="text-align: left;">I am not sure about you but if I showed a 5 year old this chart and asked him if it looked like these two things moved in the same direction or in opposite I am sure he would tell me they move the same. All of us want to engage ourselves in understanding the why of things but it is the what that in the end matters. I personally cannot imagine going through all the brain damage you have to in order to go through all of these arcane economic theories of macro economics and then trying to make a trading decision from it. How about just following the trend putting on the trades, then going to a sports bar with your hat on backwards with your buddies and saying fuck a lot!</span></div>
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Going back to my reference to the movie Arthur, "of course I took the money I'm not crazy." That is the guy I want to be not the one with the bow tie, horn rimmed glasses and flannel slacks wowing audiences about economic theories. There is a reason economists rarely catch bubbles correctly, they are tied up in their underwear with all of this nonsense. The way it looks to me now on just the basis of being a dumb ass with no other ideas, the next price target appears to be 724. Does this mean we will get there, of course not. It is simply the next significant support point. Often these targets are not hit and even if this one is it will take time to get there. The moral of the story is we are in a down trend, sell the rallies. We might get a good sized rally in this one based on how sharply this dropped, but it will be a sell when it happens. Keep it simple.</div>
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<b><span style="font-size: large;">Will this result in a stock decline?</span></b></div>
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The same logic should apply to this discussion. The stock market is still in an up trend so it is not the same scenario as we had with Gold which was in a down trend. There are ideas going around about whether we will get a margin call selling wave in stocks and I don't think that will necessarily happen. What you have to keep in mind is that the stock market is where it is because of the way the FED is manipulating the ES, so will the FED have margin calls? Will they stop calling B of A ( allegedly ) and telling then what they are about to do in t 30 minutes so they can front run? I doubt it. The individual investor leveraging is not what has created or carried this rally.</div>
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I am concerned that the stock market is a bubble but as we saw with Gold and Real Estate and the Internet bubble, these things can often inflate for longer and go farther, than most people can anticipate. The trend has not broken yet.</div>
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I like to keep it simple in this regard, time for the sports bar and the swearing, and oops don't forget your hat!</div>
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Good Trading</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com0tag:blogger.com,1999:blog-27784316.post-63578946378930594832013-04-15T18:25:00.001-07:002013-04-15T18:25:38.101-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">GOLD BUBBLE HAS POPPED NOW WHAT TO DO IF YOU ARE CAUGHT ON THE WRONG SIDE?</span></b></div>
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Apparently nobody thought my picture of the FCM heads running with bags of money was funny? I guess I have to work on my comedy a bit. As we watch the unwind of what I have been consistently calling the biggest bubble in history if you go back and read all of my posts on this over the last couple of years, the question is what to do if you are caught and getting smoked? My answer will surprise most of you. Today was interesting reading all the takes on what has transpired and one thing came to mind that made me chuckle. There is a line from the newest Bond movie where the Bad Guy who is kind of funny says to Bond, "James all this running a shooting and fighting is just exhausting" as he was getting ready to shoot him. When I read through all the explanations of what happened, I got exhausted. I can't imagine working that hard and creating all these obtuse reasons to explain the obvious. The market was in a down trend and we got an accelerated move in the down trend. That is it, that simple. Big moves most often happen in the direction of the trend. Why get into all this exhausting screaming and fighting over it? Yes there were possibly big orders in to sell, but there always are big orders in the direction of the trend be it up or down.</div>
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<b>YOU STICK TO YOUR PLAN</b></div>
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All of the things that surround bubbles and how they get built then ultimately unwound is pretty consistent. This is why I have been very good at spotting these things consistently. One aspect of the process is one that relates to what to do now if you are caught?</div>
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If you are convinced that it is a safe haven asset you should not be deterred by this one bit. That is a long term view of things and you should be buying more on these sharp declines if that is your plan. It is not mine and I am in the opposite camp in regards to that as readers know, but if that is your view stick to it. If you have identified a scenario where you are proven wrong if something happens, follow that also. I am addressing this whole notion of Gold being this magical savior in great detail in my Newsletter this month.</div>
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What often happens in bubbles is people go in with one objective and get moved by rhetoric and change their plans. I am sure there are some people who initially went in lightly then ultimately bought the story and levered up as prices rose. Now they are getting killed on the add ons and don't know what to do. This is why you always have to have a plan, it really helps during situations like this. Stay committed to it. If you are going to hold this for 10 years no matter what, don't listen to shorter term people. I have been on record as consistently warning this would happen and that was from a longer term stand point, so I have not been caught by surprise. However, if you are someone who has bought the story stick to your plan whatever it is.</div>
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I have one long term argument that I am sure bullish people are looking at on the chart above. If you are a wave counter you could certainly claim this as an ABC correction in an uptrend. There is very good symmetry to this which supports the argument. The next step is you place your retracement ratios on the chart and try to pick a point in space to buy. You will see my view on Fibs in my website in a video I have there, however some people live and die by them. To me this price action is more much like a wave 3 than a C wave in Elliott theory, so I would have a 1-2-3 count here which would call for far lower prices. It looks to me like the target on a monthly chart would be 724 at this point.</div>
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The main take away from this post is that stick to your plan. If you are a bull act accordingly, if you are a bear act accordingly. No matter what side you are on don't get tied up in all the BS stories on either side trying to explain things. It hardly matters what the explanations are. We are in a down trend now on even the Monthly charts. If you go back far enough you will see where I said when it breaks we will see consecutive $100 down days and that is what we are seeing. When bubbles pop they are great opportunities even though they are hard to time due to the nature of how they are constructed.</div>
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I have been saying I am getting a bad feeling about the stock market and we are starting to see the first sign of some real weakness today. For those who read the Newsletter and asked me about the difference in the pattern between the Russell and the ES, you are seeing how well that tool I gave you works. That alone is worth years of the cheap annual fee for these monthly releases. I hope some of you used that to your advantage in your trading. In looking at an ES chart, 1533 is the key short term level that needs to hold. I suspect Ben and company will be buying heavily during the night sessions if we get close to that level to try and hold it above it. If we do get heavy volume they won't be able to hold it up.</div>
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You can see in the above ES chart my highlight bars turn back to red if today's low is taken out tomorrow. I would not stress out about what they are you can see they have not been that great recently going back and forth incorrectly. We also are nearing a pretty significant short term pivot area. If we get below that we have the first sign of some further trouble. It is not nearly as significant as the Gold support level I had pointed out at 1530 ish, which was a level that had held for months. This is a very short term point. What I am looking for is a break of this and then a bounce. The Russell as already blown way through there, remember I pointed out how much weaker it was. This is likely where I will sell the bounce.</div>
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Stick to your plan regardless of whether or not Bill Gross, Chris Johnston, or Zero Hedge agrees with it. I think I have made my view pretty clear. We are experiencing an enormous melt down so there is going to be a violent snap back here at some point probably soon. If we were to get another big down day that is likely a good profit taking point.</div>
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Man up!</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com3tag:blogger.com,1999:blog-27784316.post-74887218810289091432013-04-12T21:01:00.000-07:002013-04-12T21:01:59.715-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">DIVERSIFICATION, THE BEST REASON FOR SPLITTING UP YOUR MONEY</span></b></div>
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For those of us PFG victims and for those who will be victims of other FCM crashes that are surely coming, I think you should save this blog post in your favorites and refer back to it over and over. This is probably the most important article I am ever going to write.</div>
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Look at this chart, which shows the Gold crash today ( Friday ). This could be a crash or an explosive rally in any market, it is just the one that is at hand now. With the story about IB that came out as well as the others, and in the wake of PFG and MF and Sentinel and all the others, we know one thing with 100% certainty. At some point in the future and probably not too distant future, some of us are going to wake up with our accounts frozen due to a FCM bankruptcy where they have stolen segregated funds. In this instance you will not be able to place any trades, and you will have to sit there and watch your positions get decimated if you are positioned wrong waiting for a liquidation process that in the case of PFG took two weeks. During that period you will not be able to do a thing to protect yourself in those accounts. This is exactly what happened to us with PFG. Keep in mind that even if an FCM has not stolen segregated funds which is the in vogue move, your money would still likely be frozen up in the bankruptcy process for a very long time. The whole concept of segregated funds is that they are supposed to be separate from this process but we have seen that is almost never the case. There are no segregated funds, that is an urban myth.</div>
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Here is what you can do to protect yourselves against this. If you have another account somewhere, you can put on opposite positions essentially hedging and assuring that your net exposure in your total portfolio is zero. With PFG they wiped out all existing orders so even if you had a GTC order in it was cancelled and you had to wait until they got to you to have your trades exited. This cost both Michael and I dearly with PFG. I always had previously had other accounts so I could hedge in this instance and was fooled by Gensler that piece of garbage into thinking everything was ok. I would take an Octagon fight with him as a fall back to my Wasendorf request since that is going nowhere. I see why Barry wants him to serve another term based on how dishonest and corrupt he is. He and holder should get a room.</div>
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Granted this would not be a perfect hedge because you will never know in a timely fashion when your positions have been liquidated since the communication will be terrible. We had no idea at all how we stood and there was nobody we could call. If you put on opposite positions in other accounts you can at the very least minimize the damage of a naked position in a situation like we have now with Gold. You would likely be net naked the other way at some point without knowing since the communication on your exits in the bankruptcy will be late by a few days at best. However, you have protected yourself as best you can. I think the ideal balance is really dividing your trading capital by 4, having 4 different brokerage accounts. This way the theft will only be 25% of your capital. Beyond that the next option is to use the idea of Notional Value.</div>
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What this means is that if you have set aside $100k for a trading account, deposit way less than that in the firm but trade it as if you have $100k. If it comes to margin calls wire the money in. Initially I was against this idea and it does take some mental toughness to see the inordinate percentage swings in what you see in your account statements. You have to view them within the context of a $100k balance. This is what I am doing now because of how sure I am of many more segregated thefts. The regulators have created a scenario where there is nothing really to fear if they decide to swipe some money. If you are a democrat you won't even be charged with anything see John Corzine, so why not take a flier. They will catch people sooner now but that will not save your money. Once it is gone it is gone. Just because they happen to catch someone sooner, the firm will still have to go through a bankruptcy process that will take years and your money will be gone, tied up in the process while everyone else gets paid their Corleone's for doing nada. They can't just claw back money with a phone call just because the NFA might be lucky to catch someone through electronic monitoring. You need to understand that once they catch them it will just start a multiple year process, you won't just get your money back and be fine. Keep in mind that if they steal your money and are caught the very next day after using it to make a trade or to run their company, the process of getting it back is years not days or weeks. As a result catching them sooner does not really mean much. It could make it easier for the trustee to claw back the money once the bankruptcy process unfolds, but that will be at least a year from the shut down if not longer.</div>
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Create your plan in regards to this and stay with it. The world has experienced a sea change and the days of large balances being safe are long gone. Do not make the mistake I did. I cannot emphasize enough how important this is if you are serious about trading. My trading was absolutely debilitated for 9 months due to this. Protect your money nobody else will. I think if you read the IB response to client inquiries and reconcile that with the complaint from the regulators, something is very wrong. This two versions of the same incident are quite a bit different. This is especially strange in light of the fact that they supposedly self reported. I know what I would do.</div>
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If it does happen to be true that the model of the FCM makes it such that they cannot operate profitably on their own then they should raise commissions to the level that makes the business viable. We have seen this in many industries when cost cutting happens through competition, only the strong survive. Monitor the earnings of the companies where your money is and if they are weakening dramatically take off. If you have the guts to have it at a private company now I tip my cap to you, you have more guts than I do. At some point in the future perhaps many years from now there might be some type of insurance plan but I doubt it. It is pretty clear that the whole wall street insider gig is living off OPM ( Other people's money ) so if the segregated money was truly segregated the whole premise of the game they play would be gone. This is why I expect nothing to change and more shenanigans to go on. It is good for business.</div>
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GOLD</div>
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You may have caught me twitting about this and for those who read here regularly you know I have been calling for this for a long time, you can read the archives. I have recently been writing about it a lot. I am not happy to see this melt down because millions of people have been suckered into this just like every other prior bubble that has ever happened. However, if you are one of the people who got suckered, it is your fault for not doing your research and discovering that all of this BS about safe haven is exactly that. If you are a Newsletter subscriber you will see full coverage of this in the next issue. It is too bad since I have already written the draft, that I did not feature it last month, but I was on record in here on many occasions warning of exactly this type of situation.</div>
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When the next over hyped bubble happens and experts who make money from you buying into the story start talking, raise your middle finger then turn and walk away, in that order. Timing bubbles is almost impossible so there was no way of getting the exact high. Where you can save yourself is by not chasing markets that are extended. The stories always get really good right at the tops. The Stock Market is getting into this mode right now. We still have a tremendous up trend but the market is rising so contrary to so many things that should cause it trouble, it is a matter of time before price marries up with everything else. At this point I do think it is becoming a bubble being inflated by the FED to manipulate public perception. This does not mean it cannot go higher. it is likely we have low rates for many years to come and that is the main driver of this bubble, so timing this one could be really tricky. I admit to being early on Gold. The conditions for that bubble to burst were there for a long time before it finally did. Now we are getting the "it is still a great long term investment" story. Ughh, these guys just never quit. I remember the gal who cuts my hair telling me she was loading up a pyramid of condos in Texas against my advice in 2005 - 2006 claiming it was as an investment. Needless to say she puked em all out and lost hundreds of thousands of dollars. When someone tells you Gold is a great long term investment, your thought should be:</div>
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<b>NO IT IS NOT</b></div>
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<b>It is a commodity that goes up and down, trade it. It will become a good investment again under $500 or somewhere in that range perhaps a bit lower.</b></div>
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Trading a market in a bubble phase is no different than one that is not. It is more for longer term investing that identifying bubbles is important. What you don't want to do is buy into them late. You need to keep your original position until the time comes when the trend changes. There is no way of knowing how far they might go. When you pick price levels in space against trends you are asking for trouble because you are against the trend. Surprises come in the direction of the trend most of the time like today in Gold and Silver. They are both in downtrends on all time frames, so a big down move is less surprising than a big up move would be.</div>
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Gold will not go straight down under $500 without various periods of rallies and sideways moves, but there will come a time and we may see it right here where the emperor is exposed and all the weak hands rush the exits all at once. This will result in consecutive $100 down days which we could see right now. This will be very interesting to see what happens. After today we are short term very very oversold, but the trend is down. We are likely to have a snap back here after today, but we have a waterfall out there lurking that is going to surprise everyone except those of us who trade commodities. For us it is business as usual since we have seen the boom and bust cycle many times. Ho hum business as usual.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com8tag:blogger.com,1999:blog-27784316.post-39498279039514548482013-04-11T22:07:00.000-07:002013-04-11T22:07:00.737-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">CHASING THE HOT HAND</span></b></div>
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I was on a conference call today with some top traders, some of the best in the business and one topic came up that I found interesting. Every single one of them with no exceptions has had or currently has one of more trading services. I asked them at one point how they handle the ups and downs and surprisingly they all said that one thing they know will happen is the minute they get on a hot streak new clients will pile in the door. They also said the minute they get on a cold streak everyone leaves. This type of herd mentality is why most people do not get ahead in trading.</div>
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There are many counter intuitive things you have to do and believe me it is not easy to do some of them. One of the traders, probably the most well known to me of all of them, mentioned a trading program he had that went through a good sized draw down last year. He told me the very last client left the day of the low in the draw down and by the end of the year it had far exceeded the prior equity peak. The problem of course is that not one single person of his original group was around to see the turn around and new equity high.</div>
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If you look at the chart above would you want to be the guy who bought at the high? That is the equivalent of chasing the hot hand with trading programs. I am not picking on that market in the chart, it could be any market, it could be the stock market. The point is that getting in after a rise of that amount is not a high percentage play.</div>
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If you plan on following a trading program from me or anyone else, I think it is a good idea to outline your plan. If the plan is to go do something define how you will do it. Set it aside for one week and do not think about it. After a week come back to it and see if it still makes sense. I would be willing to bet that if the plan was originally at one point to find the hottest trader you could find and just follow him blindly once he gets hot, you would think a week later that might not be such a great plan. It would be a great plan to follow a great trader, but it would not be a good plan to wait for him to get on a hot streak. It would be a better idea to wait for him or her to have a down period. I will give you a real life example in my life. Last month we had a bad stretch in our bond system and Ryan at Robbins put a new client of his into my Bond System atfer the losing streak. The logic was that he believes in me and my system and told his client if he wants to follow me now is the time to do it. The client thus far has 3 trades all wins, the last 3 trades we have done.</div>
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Whether it is me or anyone else, the time to start following someone if you believe in them or their programs, is after a draw down not after a big run up in equity. This does not assure anyone of anything, but it is a better probability play. It is how I manage my money with my Bond System. When it goes through bad periods I trade it more aggressively at some point looking for the reversion to the mean. There is any guarantee that a draw down won't get bigger or just keep going. However, we know there are always going to be draw downs, so if it is in your own trading and you believe in what you are doing stick with your plan. You establish and uncle point and if you reach it stop trading and re-evaluate. The uncle point needs to be realistic, it can't be 2 ES point on a 75 tick chart, and it should not be $5000 on a 75 tick chart either. Something more moderate in them middle would be best.</div>
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The moral of the story is don't follow the herd they always wind up going off the cliff.</div>
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Have a great Friday and weekend next week is bound to bring some action since this week was quiet.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com1tag:blogger.com,1999:blog-27784316.post-1946784334285952412013-04-10T21:51:00.002-07:002013-04-10T21:51:25.827-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">SEGREGATED FUND THEFT</span></b></div>
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<span style="font-family: Times, Times New Roman, serif;">This is a picture taken by reporters at a recent commodities industry meeting of a couple notable president's of FCM's. It reminds me of one of my favorite movies Arthur where at the end he comes back over to Susan and said "of course I took the money."</span></div>
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<span style="font-family: Times, Times New Roman, serif;">The story broke yesterday about Interactive Brokers being fined for screwing around with the rules as they pertain to segregated funds. I know I have readers and clients who use this firm so I thought it would be a good idea to talk about this incident.</span></div>
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<span style="font-family: Times, Times New Roman, serif;">It is amazing how common sense is never allowed into conversations to solve problems. When treatment centers treat drug addicts they take away their access to the drugs. The solution to the issues with Segregated Funds ( now that term is a f.....king joke at this point ), is as simple as the day is long. Take away their access to the drugs.</span></div>
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<b><span style="color: red; font-size: large;">PERIOD</span></b></div>
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<span style="font-family: Times, Times New Roman, serif;"><b>The only way this problem will ever be solved is to completely remove all access to client funds. </b>Of course the industry does not want this because then it takes away their drugs. The have to fall back source to steal money from in the event they get into a bind. The temptation is simply too great, lose your business or take money that is just sitting there. I think since we are seeing so many incidents of this that the temptation to screw around with the money is too great for most people to pass on.</span></div>
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<span style="font-family: Times, Times New Roman, serif;">I have to admit to not being the most objective person around when it comes to this now having been burned. However, if you look back at one incident after another of a company making a public statement trying to soothe angst, when a story has broken, it is very hard to believe any corporate executive. Wasendorf of course released one of these statements after MF Global. I remember Lou Saban the football coach releasing a doozie the day before he changed jobs. Unfortunately lying has become so common that it is almost part of the job for a CEO. As a result I do not even think it is worth any effort reviewing the release from IB on this matter. What would you expect them to say?</span></div>
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<span style="font-family: Times, Times New Roman, serif;">I have no idea whether or not there are some deeper issues going on here or not. I left this firm long ago because of their terrible fills and customer service ( Peggy from the Ukraine from the Mastercard commercials ). I did mention I was concerned about them when I saw them getting into real estate loan with almost no margins at all. That told me something might be going on. That was a year or so ago, but it seems to me that the time of when this violation occurred was possibly around that time. I am not sure about this I am thinking out loud. I am going to use something they gave to one client in an email here which was news to me.</span></div>
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<span style="font-family: Calibri, sans-serif;"><i><span style="color: red;">The protections available under the Securities Investor Protection Act ("SIPA<a href=""></a>") are only available in the context of a liquidation proceeding of a SIPC<a href=""></a>member broker-dealer and relate to the "custody" of your securities at the SIPC<a href=""></a> member broker-dealer. Thus, if a SIPC<a href=""></a> member broker-dealer were to fail at a time when a customer had securities and/or cash from or for the purchase of securities in the custody of the SIPC<a href=""></a> member broker-dealer, in most instances it would be SIPC's<a href=""></a> obligation to restore those securities and cash to the customer, within statutory limits. That does not mean, however, that the customer would necessarily receive the original value of his or her purchase. SIPC<a href=""></a> does not protect against the decline in value of any security. In a liquidation proceeding under the SIPA<a href=""></a>, SIPC<a href=""></a> may advance up to $500,000 per customer (including a $250,000 limit on cash in the account).</span></i></span></div>
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<span style="font-family: Calibri, sans-serif;"><i><b><span style="color: red;">Interactive Brokers Corp. and Interactive Brokers LLC are both SIPC<a href=""></a> members. However, other entities using the same name, such as Interactive Brokers (U.K.) Limited, are not SIPC<a href=""></a><a href=""></a><a href=""></a> members. </span></b></i></span></div>
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<i><span style="color: red;"><a href=""></a>SIPC does not protect forex<a href=""></a> transactions. SIPC<a href=""></a> only protects cash to the extent it is on deposit for the purpose of purchasing securities. SIPC<a href=""></a> does not protect cash, even if held in a securities account, if it is there for another purpose like conducting a forex<a href=""></a> trade. However, if cash is held in other currencies to purchase securities, then it is protected. For example, if you deposit Euros for the purpose of buying shares on the FTSE, the Euros will be protected. However, if you are holding Euros as a currency trade, the Euros will not be protected.</span></i></div>
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<span style="color: red;"><i><u></u>If IB<a href=""></a> were to fail, a trustee would make a fact inquiry as to whether the cash in your account was deposited there for the purpose of purchasing securities.</i></span></div>
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<span style="color: black; font-family: Times, Times New Roman, serif;">What I find surprising about this is that I had been under the impression they had a sweep into an FDIC insured account like TD Ameritrade and from this it is clear they have no such thing. You can see that in the event of a company crash you have no protection. We all have learned the protections supposedly offered by the commodities exchange act is a farse and that is essentially what is stated above being what you get with them.</span></div>
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<span style="font-family: Times, Times New Roman, serif;">If you read the complaint you can see that there was a period of time that had they gone down a heck of a lot of money would have been missing and you would be like me waiting for years hoping to get some of it back. Fortunately, nothing bad happened during that period. It seems to me when I read the complaint they were playing a dangerous game with currencies and then claiming oops we did not mean it etc..</span></div>
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<span style="font-family: Times, Times New Roman, serif;">It is up to everyone to make their own call but I think no matter who you are or where your money is, if you are going to trade futures at this point you had better have your money divided up into multiple brokerage accounts. If and or when we enter into another market down turn you can bet your sweet bippy a few FCM's are going to go down and take clients with them. Keep in mind these shenanigans which now include IB, Cantor Fitzgerald, and also a large Japanese firm whose name escapes me, are going on during a time of one of the biggest stock market rallies of all time. What do you think will happen if we get a 30 or 40% decline? POOF is what will happen.</span></div>
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<span style="font-family: Times, Times New Roman, serif;">We hear that one of the problems that "causes" FCM's to screw around with client money is that the margins are so small it is hard to make a profit and stay in business. I guess we are all supposed to accept that and say well then steal our money to survive. If you look at what the CFTC is doing, it will have no effect at all on preventing more of this crap, ZERO. They also don't want insurance. Where that leaves us is... "When you have eliminated all the possibilities what is left no matter how improbable it might seem, is the explanation." In this case what we are left with is they don't care if more of these things happen. If they did the regulations would be such that they have no access to the money directly.</span></div>
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<span style="font-family: Times, Times New Roman, serif;">I can't tell anyone who might have an account there what they should or should not do, but I do think the best way to proceed is to split your money up no matter where your money is and that includes banks to based on what we are seeing happen as well as brokerage firms. That is just being smart it is not being negative or paranoid. I wish I had been more paranoid or negative when it would have mattered and had my money split up like I am recommending here.</span></div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com3tag:blogger.com,1999:blog-27784316.post-596173014801988402013-04-09T21:52:00.001-07:002013-04-09T21:52:04.923-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">IF THIS SURPRISES YOU WAKE UP</span></b></div>
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<a href="http://www.cftc.gov/PressRoom/PressReleases/pr6560-13">http://www.cftc.gov/PressRoom/PressReleases/pr6560-13</a><br />
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I got off this subject because I was tired of talking about it and felt I had driven the point home. It is amazing to me when I talk to people the lack of concern over another PFG. I don't consider MF to be the same since most segregated holders are going to wind up with all of their money back. There is no chance of that happening with PFG, zero.</div>
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Readers know my thoughts on this firm. They screwed me so many times on fills then I got Peggy in the Ukraine from the Mastercard commercials every time I called customer service, so I vowed never to do business with them again. When I saw this article about them it was no surprise to me. It was not that I expected it to be them, I did not. What I am 100% sure of is that FCM's mishandle segregated money every single day still. The government actions have done nothing at all to prevent any more disasters. What they have done is make it so the thefts will be discovered sooner. The outcomes won't change at all. The money will still be gone and what is left will be paid to attorney's and or tied up in court for years. What will happen is that you will know you have been hosed much faster whatever comfort that provides.</div>
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The moral of the story is split up your money. FCM's are still screwing around and more PFG's are coming. You don't want to be in the position I was where the majority of your trading capital was in one place. If it poofs you poof. There are poofs coming during the next turn down we have. I say this with 100% certainty. Do your homework and split up your money. I don't know it this firm has any issues or not but obviously with at one point $400M not being accounted for, there are some problems going on. I know in my world if the word segregated comes up in any way with an FCM in any negative way I am gone the next day period. At the very least I would take out half my money immediately and ask questions later.</div>
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I am not seeing any setups I am in love with here. Gold I think is looking like it might be worth a shot on the short side here and ironically so is the DX. This is odd because all the experts tells us they move opposite which of course is not always true just like most of what they tell us. Fact checkers are not among their peer groups. The DX is also moving separately from it's recent relationship with the stock market. I think the reason for that is that the FED is now just focused almost exclusively on the ES.</div>
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I noticed in the court docket today that a ton of people are selling their claims in the PFG case to bad debt buyers. This is probably not a bad idea due to the continued delays and the prospect for another distribution this year being very bleak. Whether it is worth it to wait for a whole additional year for only another 10% is a good question. It probably isn't. I have already written off the loss on my taxes so I am going on the assumption that nothing more is coming. It does however seem likely that we will get to 50% at some point in the next couple of years.</div>
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My parting thought is I wish someone would step on that little shrimp over in Korea who is running his mouth. Fonzie said it best in Happy Days, at some point you have to hit somebody. Until you do you got no reputation.</div>
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I have to get cracking on my web site so cutting it short tonight. Hopefully some things are going to set up the way I like them soon. The bond system has also only made 1 trade this month so far, a win, so things have been quiet this last week. Sorry no charts tonight I think I have chartitis!</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com2tag:blogger.com,1999:blog-27784316.post-84310432683129405742013-04-09T07:23:00.000-07:002013-04-09T07:23:13.985-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">STOCK SELL SIGNAL STILL LURKING</span></b></div>
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Here are the ES and RUSSELL charts with the ADX on them. I hope readers of the newsletter have spotted the pattern that is here and also have spotted the difference between the two and which one is the better setup. If you are a client and are not sure please email me. If you are not sorry, it is not fair to them to tell everyone just dropping in about this. For those who are not I would suggest studying the ADX it can be a very valuable tool. The purpose of the Trading School section is to show people how we trade and the tools we use to do it, that is why we have covered this in a few different editions.</div>
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You can also see here that the accumulation indicator is also showing a different situation in each of these markets. I want to stress these are setups not entry patterns at this point. As I pointed out in Natural Gas the other day. That was a sell setup not a sell entry. For those who thought I was a moron when the market took off that next day I said right in the article it was not a rush in guns a blazin sell, it was a setup. It still is and is now looking like something could come along there in a few days. This is how setups are they are situations where my attention is now drawn to these markets looking for shorter term entry patterns to develop.</div>
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How you enter the trades is another matter. There was a comment made in one of the posts about specific price levels for the Russell on a bounce. I have no idea about those, I do not use Fibonacci and have made a video about why that will be in the new web site. I focus more on short term pattern setups, then price confirmations of them via price movement in the direction I am looking to drag me into trades. I don't represent that it is the perfect way to trade, I represent it is how I do it. There are pluses and minuses to every approach.</div>
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I am working on something interesting that I think lends itself well to a webinar so hopefully I can put that together so we can start taking things to another level. My website is about a day away from being turned over to me. I keep botching some of the changes in the Word Press edit mode and have to wait over night for the hoster to reset things for me, UGHH. There are two modes to be in for editing and if they have created content it requires one mode and if I have created it there is another mode. Whenever you use the wrong mode the whole thing gets messed up. Believe me running a trading business and trading are two completely different animals to say the least.</div>
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Let's be watching the Bernanke's here something is brewing with them I think in the next few days.</div>
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On a side note, I went over to a buddies place to watch the NCAA mens final, I am from Michigan originally so I was pulling for them. My buddy is a big hoops guy and my best friend is an NBA General Manager, so I follow hoops closely. It was a great game too bad Michigan lost but the best team won I think. The coach out coached Michigan's coach. Michigan had them on the ropes with the up tempo full court game and Pitino was able to slow it down which favored his team. I bring this up because one thing I always do when I am trading lousy is slow things down. I am not a fast break up tempo trader. I like to wait patiently for certain things. At times I push things in the Swing trades trying to catch a fast break and that is why our win percentage is lower in that than bonds. I am not going to do that any more. Sometimes I worry that there are not enough trades for people and they may not be happy about that. However, the bottom line is making money not the number of trades. Look for fewer trades that we stay in longer in that service.</div>
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What I hope people do with the writings here is use them to study on their own some of the things I discuss. You may well be able to use them better than I do.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com1tag:blogger.com,1999:blog-27784316.post-29255778273344017342013-04-06T09:15:00.001-07:002013-04-06T09:15:55.547-07:00<div style="text-align: center;">
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Zero Hedge had this yesterday and I think it is interesting. You can see it came from one of the dark over lords Morgan Stanley. There is a lot of talk now about how stocks are very cheap by historical standards and as a result are going to ramp up in price from here. I am a believer in timing stock market swings at extremes with earnings ratios in general. In general is the operative phrase. What I want to do is buy when prices are low and the ratios show under valued levels, and sell or go flat at high points, where stocks are over valued. I have not found any evidence in my research over the years to support buying at extended price levels on the high side regardless of whether or not earnings measures may or may not be valued correctly. </div>
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What I like about this chart is that it focuses on Forward P/E's. I have found that measure to be one of the two best of all the measures for doing this type of thing. For every egg head who comes up with something like this there is another showing another stat with the reverse, supporting a buy here. I think at some point you have to step back and just think using basic logic. By any measure the stock market is extremely extended during this rally, we are at all time highs basically. Is it really logical to believe that stocks are under valued at such a price juncture? Not in my mind.</div>
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I went through some statistics in my Newsletter this month about this time of year with the stock market that also do not support a new long position being put on here, and why. If we pair this with the horrible NFP report with the absurd doctoring of the head line number with the participation skit, it has never been more clear that there is a huge divergence building here. We then have the story break about the trader who was supposedly controlling 20% of the ES on any given day. There seems to be a preponderance of events now taking place telling us to look out.</div>
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I always focus on price and from that stand point we do not have sell signals yet from a broad perspective. We once again saw the PPT bring the market back from the brink yesterday, and this has become business as usual. It is a shame that something like this is so widely accepted by the public. I never would have thought 10 years ago that the public would be so accepting of this level of government intervention into our lives. From that perspective it is different this time. The proposed changes by BO with retirement accounts are the next step in the re-distribution plan. It is becoming as clear as day that his policies are wrecking this country and I am now getting a little worried that the fall from all of this is going to be sooner than later. When I see his proposed budget adds $7 Trillion to the debt, I am beginning to think now he is doing this intentionally to bring us to our knees. I thought before he was just so set in his ways and was stubborn, but there is no way with the advisors he must have including Soros, that he does not know his plan is going to bring us down. As a result the only conclusion I can come to now is that it is deliberate.</div>
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What does all of that editorial stuff have to do with trading? We cannot just go run and hide or blindly short the market because we think politics are leading us astray. The last few years have shown what a mistake that can be. However, it does tell us from a bigger picture perspective, that we may have a monster short trade to be had out there on the horizon. Catching it correctly is never going to be easy because of what the FED is doing with yesterday being a great example. We had the real reaction happen pre-open, then the governments reaction once the pit session hours kicked in. If you are inclined to try and catch this short I think you have to be willing to probe a few times and get kicked around a little. This is not easy to do from an emotional stand point. I am going to be looking for a short entry on a bounce from here now.</div>
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I wanted to show a chart of a trade we are currently in with the Swing signals to illustrate how we are trying to ride trades for a big longer. We got long on March 25th in this trade and have been trailing a stop up since that time. I have one possible short term target on the chart that I judged was too close and we should try for more than that amount. I do use discretion in these trades. In this case that turned out to be a good call since we zoomed through that level. You can see we traded in sync with the highlight bars showing green for a buy where we entered. I would love to say those highlight bars are the holy grail but they are not, not even close. They just give me a general idea of where the trend and momentum line up and the direction the large moves should go. In choppy markets they can go back and forth but tend to do so less than some of the other things I have used over the years.</div>
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We are going to be taking profits here shortly since we have had some range expansions especially yesterday. The PPT took a little back from us when they reversed the stock market late.</div>
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This coming week should be interesting, hopefully we get a bounce to sell. I hope everyone enjoyed the Newsletter I think it is imperative to get the stock market right and so far I have been dead on with it. Timing the long exit and or short is going to be key going forward.</div>
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Have a great weekend</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com1tag:blogger.com,1999:blog-27784316.post-28159334007275561262013-04-04T21:40:00.003-07:002013-04-04T21:40:45.219-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">NATURAL GAS - ARE YOU NEWSLETTER PEOPLE GETTING THE HANG OF IT?</span></b></div>
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One of the ADX setups is here for those who are studying the Trading School section of the Newsletter. Once again this is a setup, not a situation where you just run in guns a blazin! We also have the COT picture supporting a potential decline and we also have something interesting going on with Open Interest. If you look at that you see a huge increase just by itself is bearish. If you add to that the significant decline in the Commercial long position it tells us this big Open Interest increase is everyone but the guys who matter.</div>
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It is time to put this on the watch list for a sell. I do not see any reason to sell yet.</div>
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Tomorrow we get the comedy and magic club routine otherwise known as the NFP report. After the weekly claims and the ADP report before it one could reasonably conclude the report might not be very good. Of course we know that means nothing any more. There is a big recovery we are told and millions of jobs are being created allegedly. Things are so good I just can't stand myself how about you?</div>
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I don't try and game this report, never have. I won't be watching when it is released unless for some reason I happen to wake up with another zany idea to go check out that can't wait. I still don't have a good feeling about things but trying to guess when the FED's scheme might come to an end is too tough for me. I do think the story about the rogue ES trader is a must follow story. We can only hope it leads to some truths being revealed but who am I kidding?</div>
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I apologize about the difficulty with the Newsletter somehow that link got out to a lot of the wrong people. Based on how many people emailed me asking for a copy and comparing that to our list of clients and how many people viewed/downloaded it, it got it somehow to a lot of people that were not authorized. I am just asking one more time please not to do things like this. I worked very hard on this one so I hope everyone enjoyed it. These are interesting times and we need to stay on top of things right now. The chance for a shock is out there.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com0tag:blogger.com,1999:blog-27784316.post-69575405230216000182013-04-03T20:01:00.002-07:002013-04-03T20:01:17.728-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">PPT SERVING SOMEONE UP?</span></b></div>
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I have to give it up to Zero Hedge. I have no idea how he comes upon all this information throughout each and every day. I found this article quite interesting. It seems we now have a second "rogue trader." If you read through this article there are all sorts of things that might come to mind. There is one thing in particular that jumped out at me, 20%.</div>
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<a href="http://www.zerohedge.com/news/2013-04-03/how-28-year-old-ex-goldman-trader-who-accounted-20-e-mini-volume-blew">http://www.zerohedge.com/news/2013-04-03/how-28-year-old-ex-goldman-trader-who-accounted-20-e-mini-volume-blew</a><br />
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The nefarious relationship that exists between banks and the FED has been showing it's true colors over and over. One of my favorites is what has been called by some setbacks. Translated this is segregated fund money that the bank holding it somehow comes up with some BS reason as to why it is all of the sudden theirs to keep. Judges never wanting to be one upped by the next corrupt person kindly oblige them and let them steal the money. See recent fraud cases for more on this, I am not a lawyer but do know JPM is forecast to keep some of the PFG money through this process.<br />
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We see the banks constantly getting inexplicable favorable treatment in court cases. It is my allegation that the reason for this is there are some back door relationships going on that "we are not privy" to. It has long been alleged that the PPT does it's dirty work through Citi, GS and JPM. Is it a coincidence that the rogue traders caught "manipulating" the ES worked for those firms? Here is the bigger question, why is the CFTC allowing GS to exceed Large Trader position limits? They are not commercials, they should not be provided unlimited position sizes. Since positions have to be reported at the end of each day, why did more than 1 day go by before forced liquidation of some of a position like this took place?<br />
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It has been alleged by me that the big run in Crude Oil was caused by the CFTC allowing commercial status of large commodity funds where they could push price to ridiculous levels. If you look at the COT report during the huge Crude rally in 2007-2008 the commercials had a monster long position right at the top! That would not likely ever happen with true commercials who are hedgers. It was pointed out by me and many others more prominent, that something was amiss with that situation. Now we fast forward again to this bizarre situation.<br />
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There are all sorts of possibilities and I have no proof to make a case on any of them. I do find it curious that he apparently was only a long side trader. Anyone who trades knows you can make money faster in crushing the market with a short position. If his sole goal was money why didn't he play both sides and bully in both directions? Might there have been another reason? Might there be a back door deal already struck here? I would love to say we should have an investigation but we see where those all go. At this point it would only be truly investigated if all guilty parties were Republicans. If there was one democrat anywhere that would be implicated Holder won't do anything as we know. Let's hope this guy is a Republican, maybe he will spill the beans if there are any to be spilled. I will just leave this commentary with the following thought, I think there is a heck of a lot more to this story than we are ever going to find out.<br />
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The following chart speaks for itself.<br />
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It certainly appears the free fall is beginning. I am sure Fib guys have a Christopher Columbus type of navigation chart drawn showing the magic numbers this will stop at. If it breaks through the 1538 level and closes below it, I see nothing anywhere on this chart that is even a target. This means the target if you are short is $950 or lower since the chart only goes that low and there is nothing even there to zero in on. I am going to be sad not happy to see people get cleaned out on this one if it progresses like I have said all along it would, really sad. It is not over quite yet 1538 at press time is still holding.</div>
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I am pissed at myself for not being short the Russell, but catching this was not easy. I did say that was where to play so hopefully some of you caught this. We have caught it being long interest rate contracts but we should have had this also, bad judgement call by me.</div>
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Good Trading</div>
<br />Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com6tag:blogger.com,1999:blog-27784316.post-38104380926327540762013-04-02T22:13:00.000-07:002013-04-02T22:13:11.378-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">SILVER CRASH</span></b></div>
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I have been saying for the last two years that the metals would retrace more than 50% and I thought quite a bit more than that. It is funny how we are not hearing virtually anything about the crash in the metals. The line on the chart is where the 50% decline point lies, we are getting pretty close. It is another example of the media being so invested in pushing a story. A 5% gain is an explosive up move but a 50% decline is not worth talking about apparently. How would you like to be "that guy" who bought at the highs, paid the standard 20% markup on top of the spot price? He is already upside down more than 50%, close to 70%.</div>
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<span style="color: red; font-size: x-large;"><b>70%</b></span></div>
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That is not a typo. This is where everyone said to go for safe haven, a close to 70% loss is a safe haven? It is a good thing it has never gone to zero like the ads say. I don't think the pet rock ever went to zero either. This is not an I told you so article although it may sound like it. The point is that commodities mean revert, ALWAYS. Just because Sean Hannity, Oliver North, a myriad of actors and the Gold Bugs have told you these markets will rise forever, it does not absolve you from doing your own home work. If you bought at 5k I hate to say it but you got what you deserve, it was like buying a condo in Florida to day trade it back in 2005, no different at all. Once we get down to the 2002 levels or close to them in the metals, that will be the opposite, a great buying spot for a reversion back up. At that point everyone will be overly negative. That is commodities and I don't understand how people constantly get hoodwinked on these stories, they are all the same. I am not celebrating I could still be wrong about the total reversion but I am not wrong about it historically having always happened. If we don't wind up all the way back down it will be a first.</div>
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I don't know if we will just accelerate down or meander our way back down there over a longer period of time and I don't care. I never signed off on this ruse to begin with. At the moment the bulls do have a line in the sand that they could buy against hoping their story about it being different this time turns out to be true. For all I know they are right and I am wrong, but the 50% or close now retracement from the highs already makes my point. The Bugs said this could never happen and they said the same thing about real estate. I think the total lack of coverage of this 50% drop speaks for itself.</div>
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I wish I had caught this last move down but I did not. This market chopped sideways forever it seemed before breaking down. I did say yesterday that although I was looking for a buy in Gold, I thought it was likely to follow Silver which was breaking down. The net of it is the setup for this drop did not meet my rules so I missed it. I know of no technique that catches all the moves I wish I did. My comments on this market have mostly been targeted at those who are too heavily weighted in their portfolios in the metals because of the media push to sell these things to you as a safe haven option.</div>
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I am sooooo tempted to try and short the Bernanke's here but it has just been suicide to try and short this thing over the last 6 months. The Russell is the one to short if you want to take a shot at it. We have 18 POMO days this month so it is not going to be easy to get a good short going but never say never.</div>
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Good Trading</div>
Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com2tag:blogger.com,1999:blog-27784316.post-50484895048178900282013-04-01T20:11:00.000-07:002013-04-01T20:11:10.350-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">REPORT CARD TIME</span></b></div>
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<span style="font-size: x-large;"><b>BONDS - <span style="color: red;">$3000</span></b></span></div>
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<span style="font-size: x-large;"><b>SWING TRADES - <span style="color: red;">$476</span></b></span></div>
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The final tally is in and this is where we wound up last month. If I display it like this during most months where we make money I have to give equal billing when we don't. The highlights and low lights were as follows.</div>
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The Bond System had it's worst month since we went public with it but we did recover from a larger mid month dip. I went through in another post the re-insertion of a filter which has worked like a charm since I did it letting 3 trades through that all won including today's buy, and it screened 3 bad ones. That is pretty darn good in my book. This is how systems work and it is also how any trading approach works, there are losing trades. I have told people from the very get go not to get too carried away with themselves when we had that incredible winning streak last year. I know there is also going to be periods like this. We risk $1600 per trade so if you look at this, the net for the month was not even the equivalent of two full losing trades. That is little consolation if you happened to just start trading it right when the losing streak started. There were a couple of people who signed up at about that time. There were also a couple who started trading the Robbins auto trade right after the losing streak and have caught the three straight wins we have had as their first 3 trades. In the end all of this evens out over time.</div>
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You have to stay in these types of things for a while to get the full benefit. Most people are not patient enough to do this so we do have some people coming and going. I will say for the most part though the group has been stable. If you started with it from the beginning you have one heck of a net profit on your hands even after this month, so I suppose it is easier to deal with a losing month, with that much profit already in the bank. I take the trades to as I think most everyone knows.</div>
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We only had one trade in the Notes version of the system that made a profit of $63 so not worth even reporting. We will monitor that as we go along. If you are a system trader whether it be my system here or somebody else's, if you believe it will remain profitable you should start trading it when it has a losing streak, not when it is on a new equity high. It is human nature to wait for it to be "safe" and the statistics work against you if you do that. I started trading it more heavily at the trough and it has paid off for me.</div>
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The Swing Trades worked out ok in the end. It is never ok to have a losing month, but I do have them and when they are that small it is almost a scratch in my book. We had a very nice Crude trade at the end that helped us a great deal. The changes I described I have made to how these trades will be done which subs are already probably noticing in the orders and how they are being placed, will lead us to catching some larger trades. We are also going to be staying in trades longer. We are starting to move enough size where we can't get too cute with orders since we have been picked off a few times and in reality trying to catch little wiggles is no way to go about this anyway. I did have one bonehead trade trying to short the ES which killed us, what a dummy.</div>
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All in all last month was not good by any stretch of the imagination, but we did have a good last two week comeback from where we were. For those Newsletter readers, I sent out a PDF sharing link to get this month's edition because we could not shrink it enough to get it under the Aweber file size limit. I am ready to kick them to the curb and will do so at some point. It will be available through our web site going forward and we won't have to deal with that kind of stuff.</div>
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<b>POT POURRI</b></div>
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I have to admit to something that I normally would not but this forum is somewhat of an inner monologue for me so here goes. I keep getting a nagging feeling that comes back to me over and over and over. At times it stays away for a while but ultimately it comes back. That feeling is that all of this nonsense that is going on is going to end very badly. The Cyprus situation has paved the way the same way the tax increases at the beginning of the year did for more of the same. One of my favorite readers emailed me something today that was somewhat alarming in that it was legislation elsewhere in the world thousands of miles from Cyrus, where it is being written into law that banks can confiscate deposits in the event of an unexpected insolvency. This is not a third world country, in fact it is one that is considered to be among the most stable of any country financially. This country is even being praised for having done the right things and as a result is not in as precarious a position as places like the US. Then I read this stuff about the Bitcoin! If that is not a scam they should remove that word from the dictionary. A supposed asset that nobody knows how the value is determined and some small company is making a fortune selling it! Talk about a dog named POOF, that is what will happen to that money..... POOOOF!!! They should call it the POOFCOIN.</div>
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I just see this overall sign of people knowing the governments are BS'ing them and scrambling to try and find a way to protect themselves. What it all tells me is what I have been saying for the last few years. If you took every single thing in the world and left it unchanged tomorrow and just changed on thing, DOW = 5600 instead of DOW = 14500, you would have a scene around the world like the scene in Caddyshack where the caddies take over the pool. This is exactly why the FED is so focused on keeping the stock market rallying, they know what they are doing in terms of manipulating the collective psyche of the public. I just have a nagging feeling at some point when this does roll over, it is going to be really ugly. I do not believe that roll over is necessarily near, but when it does happen it is going to be really interesting. If the Gold market does follow stocks down instead of rallying, it is going to be even worse because a lot of people have been sold that idea. Maybe it will be a safe haven I don't know, there is no consistent historical bias either way on that contrary to what they say so it is a 50/50 proposition.</div>
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I have been looking to buy Gold but have not found a way in yet and Silver is on the verge of collapsing again, so it makes me wonder if Gold won't follow it off a cliff. That mid 1500's price is still a line in the sand for Gold. You Gold bugs better hope that does not get taken out, it will be another POOF if it does. I also find the Copper weakness a bit surprising when comparing it to the ES.<br />
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<b>THE DOLLAR</b><br />
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Since we are light a few dollars after last month lets look at the Dollar to see what is brewing there.<br />
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I think good ole Uncle Joe might say "this is a big f___ing deal." The commercials have taken on their largest short position in years right now. We are kind of in no man's land in terms of a trend since we have essentially gone sideways for 5 years.This is what irks me about these morons who talk about how the dollar is getting killed. Is is really? The dollar index is at the same price as it was 5 years ago. This is when they break out all their cute little new age formulas that they have back figured to support their argument. "Well adjusted for the price of inflation, blah blah blah." Have any of you gone to McDonald's and told them you will give them the inflated adjusted dollars for your food. As my dad says that stuff is just horseshit. BTW he is thrilled because he lives in Michigan and they made the final four in Hoops in spite of the referees in his mind trying to make sure they lost every game. He is a pill, he would have been the best color man for Monday Night Football ever had they discovered him.</div>
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I will never forget a guy I met several years ago that was always factoring in inflation adjusted dollars to everything he did. He was European and very bright and wanted to be a trader. I had lunch with him a couple of times and was amazed at how he was so infatuated with inflation adjusting everything. All the inflation numbers are doctored, how could you possibly ever do that accurately? Before we know it the CPI will be reported as not only ex autos, ex food, it will be ex inflation. "The CPI today ex inflation was ..." He could not make a trade in the currencies because he was tied up in his underwear with all these inflation calculations. Good grief! He could not understand how I could trade my Bond System when it had no calculations for inflation. That was 2007 when I came in third in the Robbins contest trading the Bond System alone and nothing else.</div>
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What we don't know at this point with the DX is whether or not this is just the standard hedge the rally deal with the commercials. Often they go from a heavy long to a short like this when trends change and it is not an indication to get short. You can see an example of that in Feb of 2010 on this chart. Had you shorted that right when they got heavily short you would have gone on quite a ride. Had we been rallying steadily and reached an obvious resistance point and this shift had occurred it would make me more bearish than this does. I am unsure on this one right here. The seasonal does tell us down and my shorter term momentum indicators have rolled over, so I am leaning short here but have not done anything just yet.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com3tag:blogger.com,1999:blog-27784316.post-21532825700849806302013-03-31T11:30:00.000-07:002013-03-31T11:30:59.566-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">STOCK MARKET CRASH/HOGS GONE WILD!!!</span></b></div>
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<b><span style="font-size: x-large;">APRIL FOOLS!!!!!!!!!!!!!!!!!</span></b></div>
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I did it again, whored myself out for blog traffic!!!!! I know if I just put a solid positive headline nobody will come here, so sad but true. I thought for April Fools I would try the ole' bait and switch move. If you are mad you got duped hang tight, I am going to cover the ES today, just not first.</div>
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Regular readers can see the familiar pattern I often show here. The commercials have become heavy buyers of this market after a big down move. This in and of itself does not necessarily mean we should be buyers here. I have a video that is going to be in the new web site that covers this type of thing. However, in this case there are some things I use that are not shown that lead me to conclude this is a buy setup. Newsletter readers should have picked this out it is in last months Trading School section that has been so popular in terms of the feedback I have gotten.</div>
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I also warned not to go Hog wild no pun intended with that setup just stand alone. Here we have a basing pattern happening that accompanies it so this has a bit more going for it. My wish list has this consolidating a little bit more first before I will try to buy it but who knows that may or may not happen. I try to remain patient and not force things. I don't always accomplish that but I try to anyway. This one is on my radar.</div>
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There is a noteworthy "expert" calling for a major sell signal in the stock indexes right now and I am going to cover what I think is the basis for that reason. I can't stomach reading his details because he specializes in revisionist history in his claims on his signals. Nonetheless, he has had some good sell signals over the years he just happened to have blown the whole rally off the 2009 lows telling subs including me prices were going to 5500. The revisionist chart he markets shows him with a buy signal at the lows which is a complete lie, he had no such buy signal in his writings at that time. In any event, here is a chart that is likely to have some commonality with his call.</div>
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The net commercial short position has really gotten large here with the ES. You can see it has been clearly declining sharply during this whole rally since October of 2011 so knowing that has been of no value. I talk about this all the time that using this is an art not a science. We have now gotten to a pretty extreme level and it has increased sharply lately. The real trick with this market in particular is that we don't know how the unprecedented manipulation by the FED of this index specifically is being categorized in the report. I think it is showing up in the Large Speculator category because you can see there was a huge net long at the major low back in 2009 and Large Speculators do not trade that way, they scale in and scale out. As a result it is highly unlikely the normal Large Specs would have had major longs down there. All else being equal they would have had major shorts, just study some charts.</div>
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What I think is likely is that the FED is not actually making the trades, they are instigating them through intermediaries who they are giving a pass to in the way of no position limits. We know they tell anyone to piss off when they are asked for their books, so we have no way of checking any of these things. As a result what we are most likely seeing is the Large Spec big long being the FED and the normal hedger types being the commercials. The Large Specs are able to fight off the commercials because they are being allowed to have unlimited size to keep the game going.</div>
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This makes this a tricky call as to how much credence to give this situation. My feeling at this point is that if we get a price pattern that is a sell it is worth a shot because of all of this. However, I don't consider it to be as high a probability trade as it would have been a few years ago before this manipulation got really out of the barn on us.</div>
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This is all conjecture on my part based on experience of reading this report. I am making some assumptions that could be incorrect. However, I think the world has accepted as common knowledge that the FED is manipulating the stock market and nobody cares because the average Joe is benefiting. Remember what we have learned through Cyprus, nobody cares about bad things until they themselves are hurt by them. As long as it is someone else who is getting screwed it is ok and it is for the greater good.</div>
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Here is another example of misguided logic with good intent.</div>
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Here is our newest free agent signee Gus "The Bus." The name comes from his sheer size which does not really show in this picture, he is 180 lbs. If you keep in mind that the opening he is guarding is a double door dining room you can get an idea of how big he is. The opening he is covering is about 8 feet wide and he basically covers it all the way across. He is a retired champion show dog that my wife drove 26 hours in total to get from the Breeder who was retiring him. Since he was a show dog he is used to an environment where the female that is being bred is kept separate in a caged off type of environment. In our house that he arrived at we had one of our dogs Leo ( a dude ) is in this pen area because he just had knee surgery and has to be confined while he recovers. Gus the bus assumes Leo is a female so he is protecting him from the rest of the crew like he is his girl friend. What he doesn't realize is his girl friend is a 170 lb dude! His heart is in the right place but the plan is actually flawed. This reminds me of some things economically that are going on right now.</div>
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I hope you are enjoying your Easter for those US readers.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com6tag:blogger.com,1999:blog-27784316.post-55208332885874756842013-03-29T09:11:00.000-07:002013-03-29T09:16:08.383-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">CYPRUS - THIS PROVES MY POINT</span></b></div>
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<b><span style="font-size: x-large;">http://www.zerohedge.com/news/2013-03-29/caught-cyprus-crossfire-small-businesses-suddenly-zero-cash</span></b></div>
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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.</div>
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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.</div>
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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.</div>
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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.</div>
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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.</div>
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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.</div>
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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.</div>
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<span style="text-align: left;">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. </span></div>
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<span style="text-align: left;">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.</span></div>
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<span style="text-align: left;">Happy Easter Holiday to everyone</span></div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com1tag:blogger.com,1999:blog-27784316.post-76887003154957376422013-03-27T21:31:00.000-07:002013-03-27T21:31:19.955-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">ES SHENANIGANS?</span></b></div>
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I am fairly sure I was one of the first but not the first to start openly talking about the PPT and their manipulation of the Stock Indexes. I was made aware of this by one of my original teachers and once I learned about it seeing the patterns and the buy programs that made no sense became pretty easy.</div>
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It used to be that the discount and premium to the cash market was monitored closely by the big funds and they would launch programs to take advantage of displacements when they got out of whack from one another. They happened at regular times usually 10:30, 11:00 and sometimes 11:30 am PST. You could often see them coming and could front run them once you got the hang of it. The first major change I remember seeing was during the Bush/Gore fiasco in the courts when the stories came out. It has been the function of the PPT since long before that to show up on big down days to try to do late day saves. Often these attempts succeeded. Back in these days volume would give them away. This has changed.</div>
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The strategy now appears to be to wait for very light volume times where the price can be moved while spending less money to do it. Ironically the government is finally cutting spending, who would have thought it would be here? They let the moves drift until the volume dries up then out of the blue it moves. These moves often come with no meaningful displacement between cash and futures which tells us it is not the normal suspects and some other "unknown" buyer. It is interesting for someone who has been watching intra day price action for so long, to see this play out this way.</div>
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In the 5 minute chart above I see no obvious manipulation by the way I would normally spot it yet I do suspect that during these days it has gone on because of the big dips that were reversed. To be clear not every dip that ever happens in stocks is reversed by manipulation, that is not true. There is an upward bias to the stock market in general. We also currently have a very strong trend, so buying dips is the normal prudent approach to take during times like this. It does not matter what causes the trend, the trend is there and you need to be in sync with it. I will never forget reading an article several years ago that was written about short sellers in a big bull market and how they were actually right and the market was wrong. Really? I beg to differ. The markets are always right and it is we who are wrong when we are not in sync with it.</div>
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Shorting markets like this is very tough. There is most likely a sharp break out there that would be very lucrative to be involved with when it comes. However, it is not a great probability play to try day after day to fade a trend this strong. Pick your poison.</div>
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I would like to see a bounce in Cotton for a short just as a heads up for one market I am watching. I do have short term sell indications in the indexes but the chart pattern here is unclear to me.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com0tag:blogger.com,1999:blog-27784316.post-23422477561627805692013-03-27T07:23:00.001-07:002013-03-27T07:23:23.439-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">CRUDE OIL DELIVERS</span></b></div>
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For those Newsletter readers you can see the ADX pattern we have written about on this chart, some of you probably caught this better than we did. We actually shorted the false break then reversed to long once the trade failed. How did we know to do this?</div>
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You never "know" to do anything in this business and one of the hardest things to do is to immediately reverse after you have taken a loss like we did here. This is especially true in the trading services where we have to tell folks in advance to do it. My logic here was that we had formed a tight congestion pattern and I thought the breakout would have some travel room to it. We just played it both ways, reversing when the first breakout failed. There are some inner workings to this as to why I thought this congestion would result in a breakout that are a bit more complex. However, the net net is just we were trying to trap the market and we were successful.</div>
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Often when there is a really strong short term burst like this for a few days markets pause. Since this trade got us back to a good spot I decided to exit after the burst. We were in a hole in the Swing service this month until this trade and now we are in a much better spot. That equity position would not in and of itself been a reason to exit had the short term expansion pattern not been there. You have to trade the trades for their individual merit.</div>
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This trade leads me to something I was going to wait for months end to discuss but have decided to do so today. We have made a few tweaks to the Swing trades and this Crude long was the first one that was done with the tweaks. As I have written many times in the past, I don't jump around from technique to technique trying to always be perfect. I have used the same basic trading tools for a long time with a few minor changes. I recently discovered a better way of using the same tools to stay in trades longer. We are going to be employing it now going forward. Ironically, the first trade in this sequence the short, would not have been a trade with this minor change, but the long was. That is the main reason we stated in the orders to reverse. Since the variation will catch larger moves we felt it was prudent to reverse the short trade if it failed.</div>
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At times in the trading services we have had some good trades that have been stopped out and then gone on to make pretty good moves in the direction we were looking to begin with. Some of this has been due to some gamesmanship by someone as I have discussed, but it is also due to the stops being too close which is on me. I have been trying to figure out how to best handle this situation which is what led me to this little change which will make a major difference. Be prepared we are going to sit in some trades for a long time now compared to what we have been doing. We will do a quick sharp volatility expansion exit like we did here at times, but often we don't get these so we will sit in trades for a month or more occasionally.</div>
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I have to thank everyone because running this service is what led me to this conclusion, had I not been doing that I may not have made this discovery. It was right in front of me for quite some time and I had been considering it, but making the service run the best way I could make it run is what led me to this. Doing it the way we have had made us money, but we have missed some larger moves that I should have caught and we are going to go get some of those now.</div>
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I twitted this morning that I think there are some short term things in the stock market that are bearish. Once again the ADX pattern is there, so something to begin to watch now for sells.</div>
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It looks like it is official now after going through another computer, I am just going to notebooks now and connecting them to my big monitor for viewing. I have so many issues with tower computers on my ranch and I have worn out the path the the Geek Squad just to find out my mother board is trashed and I am just done. My wife complains to me all the time about our computer issues which gets in the way of her facebook! You married guys get this one I am sure. She did not want her own notebook because she likes the big screen, so I gave her both.</div>
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You may have seen the PFG story that Chumpenstein went for the statutory max on the fees because he has done such a good job getting us 30% of our money back. What an asshole. I guess he just did what any other attorney would do, saw a chance to make millions off innocent victims. I would love just once, one time, to be able to hit one of these guys with a jump spinning back kick, JUST ONCE! Alas it will never happen. I still think Dana White should have a UFC version of Perps vs Victims.</div>
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Good Trading</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com0tag:blogger.com,1999:blog-27784316.post-2556943628229464832013-03-25T21:39:00.001-07:002013-03-25T21:39:08.151-07:00<div style="text-align: center;">
<b><span style="font-size: x-large;">GOLD IS NOT A SAFE HAVEN WHY DON'T PEOPLE GET THIS?</span></b><br />
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I have written about the alleged safe haven status of Gold now for a couple of years and maybe just maybe I am finally reaching some people. I am sure the Gold bugs will bash me or roll their eye brows labeling me a doubting Thomas, a traitor, a dumb ass. He is someone who knows nothing about economics. Perhaps I am all of these perhaps I am none. Perhaps I am someone who just studies history and has no agenda. There is one reason and only one reason why I say this whole alleged relationship is a fraud, it is not in the data, AT ALL.</div>
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Does that mean things can't change and at some point in the future it will become a place where everyone goes for safety? Of course not. All I am saying now is all I have ever said, there is no historical basis of any kind to support this supposed safe haven status alleged to accompany Gold.</div>
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Gold is a commodity and as a result it moves up and down and mean reverts. The next snot nose brat that tells me other wise I just might back fist. I will envision him as Wasendorf or that common theif Bodenstein ( see todays news on his fees for PFG ). Look at the chart above during the crisis of 2008, Gold went up and down in direct correlation to the cash S&P 500. It was no safe haven. If you think you should have money in Gold by all means put some there, but it is no lock for a rally during a bad economic period, never has been and never will be. It has gone up and down historically independently of crisis periods. At times it has risen and at times it has fallen. Sorry folks those are the facts just look at some charts after you back fist the snot nose kid who is running his mouth.</div>
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I bring this up today because I came across a couple of articles that were remarking about how surprising it was that Gold was down today when all hell was breaking loose in the Euro. It was not a surprise to me at all. I did not expect it to go down or up. I just did not expect it to react to that news and it did not. I am seeing the short term trend as up in Gold, so I have been looking for a buying spot recently. I have not seen one yet. It has nothing to do with the economy at all.</div>
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I still maintain a state of shock over the comments that have come to me over Cyprus, but they in and of themselves tell me what I need to know and why what I am going to do with my money is the right thing to do. It apparently is ok for people with more money to have it confiscated as long as it is not yours. After all we have to do something! There was an article that was referred in a post from yesterday that I read and it was another person saying it was essentially ok for people with over 100K in the local currency ( I think about 130k US equivalent ) to have 40% of their money confiscated and the rest frozen indefinitely making it essentially a 100% loss for the time being. You pinheads who have not been through a PFG type of thing have no idea how hard it is to live when you have mouths to feed and bills to pay, when your money is just gone the next day when you wake up. For these people in Cyprus it is no different AT ALL than it was for victims of PFG types of things. They woke up one day with their money frozen indefinitely and wondering if and when they will ever get any back. They have people and families relying upon them and now what are they to do. Don't give me that rich people garbage, grow up! I was rich until PFG too. Trust me B of A or Wells Fargo don't give a damn why you can't pay them, they want their money now or else. Someday it could be you and it would serve you right if nobody cared. This is not directed specifically at any of the posters. Most of you I know and you are nice people who perhaps don't quite understand the devastating effect these things can have on you because you have not experienced them. Trust me you don't want to. If we all give in and accept these types of things as ok it just makes the landscape for doing the wrong thing that much more conducive to doing it. At the end of the day if you have had all your money taken whether or not it is by a criminal or a bank it does not matter to your creditors, they still have to be paid.</div>
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Those of you that think this is ok ought to be ashamed of your selves. Those of you who think this is an isolated incident that means nothing for any other place should also be ashamed of your selves. I know what I am going to do and I am taking action now. This is a shot across the bow and there will not likely be someone with a bull horn on the corner telling you to do something next time this type of thing happens. Hint: Gold is not the answer. This is a rap on this topic we are not going to discuss it any more and I may have already covered it too much.</div>
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I am getting some short term indications of a possible selling spot in stocks. I do not have any triggers. We were trying to short the ES in the trading service today but were not filled. For those who want a experienced stock traders views on things I suggest reading Trading Markets.com articles by Kevin Haggerty. He is one of my early mentors and about the best there is for stock market swings. He has kids who work on the floor and he also advises major funds on stock trading. He only posts an article about once a week or so. He has an interesting long term view of things.</div>
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Good Trading and I will take deep breaths after taking a few swings tonight. I apologize if I offended anyone but I felt these things needed to be stated. I think Newsletter readers are going to like this months edition, I have been working on it the last couple of days.</div>
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Chris Johnstonhttp://www.blogger.com/profile/01542415946929766288noreply@blogger.com8