GROUNDHOG DAY 

I am traveling the next two days. I will be able to get the orders for the services out but I am not sure if I will have time for a post or not. I should be able to do one Thursday afternoon/evening.

There has been some speculation about the NFP report that should come out this Friday. My view is that we just trade the way we normally do. If they play games with it which I think is a high likelihood, there is nothing we can do about it. Trying to guess how they might manipulate the number and what effect it would have on the markets is a waste of time. You are just guessing/gambling doing that. The whole reason we use technical analysis is to tune out that type of stuff.

If I had to guess I would say 7.7% since they can then say the rate has declined while BO has been in office and everything is going according to plan. If he wins how they work their way back up to what the real numbers are is anyone's guess.

I still see the stock market the same way with a slightly higher bounce being my expectation. However we do have some down side risk that is creeping in here the longer we stay down without rallying.

Good Trading 

LAME RALLY ATTEMPT

Here is the basic buy setup with the VIX I showed the other day. First it requires an up close above the Bollinger Bands. Once this happens you then wait for a close below the open which occurred on the last bar on the chart. That close below the open gives you some short term indication that the momentum has stalled. 

Due to the weather interruption we have a couple of electronic sessions that don't have corresponding VIX bars so this is an odd one. Due to the fact that I was looking for a small bounce here and a larger decline I did not expect this to generate much of a rally and we are not getting one so far. Due to a second filter I use that I mentioned but did not explain, I felt this was not a great signal. I would urge readers to do their own research with the VIX. There are a number of ways of using this to track short term moves in the stock indexes. I threw out this basic setup just to get all of you started. This particular setup is about 60% wins to losses so it does have an edge in general biases.

The one thing I like to have is also a larger picture trend in the direction of the trade in the Vix and that is not here.

We got picked off on a few Swing trades today. No matter how much I try to tell people the challenges of trading for larger wins you still have to live through some of these trades to see what I mean by this. Here is one we did in the DX that I will use as an example.

With the Dollar Index trade we got stopped out of today we had a lot of things going for us. First we had a bullish COT setup with the commercials heavily long as labeled. We then got a rally out of a false break out to the down side and got long where indicated on the chart. We moved up nicely and during this move the accumulation measures were breaking out upward. This trade looked poised to take off. In an attempt to catch what could have been a larger move which is the whole point of the Swing Trading Service. We held the stop back below the last pivot to try and allow the trade some room. Since we entered at 79.845 the stop represented a very small loss. I know people get enamored with wins and losses and we could have easily held this stop just above the entry and claimed it was a win.

This is why I stated in the web site that the win percentage is going to be a lot lower in these trades than the Bond System produces because we are going to get picked off like this often trying to catch something big. For me to lose $70 is basically a scratch anyway. I just wanted to go through the logic of a trade and what we did and why so everyone can get an idea of what we are trying to do with these.

I  am looking to short this bounce in the stock indexes in the next few days if it does in fact bounce.

PFG

You should be able to get access to your money in the next couple of days the New York storm did effect some of their back office stuff.

Good Trading

WE CREATED A TRADE TODAY IT SEEMS

We ran into something in the trading service today that is a lesson on several fronts. To protect those that are paying for this I am going to leave the exact market and entry out of the discussion. It is not necessary to make the points that need to be made.

1) Trading thin ( light volume ) markets is dangerous.

2) Your broker matters a great deal

3) When there are a lot of orders in one place shenanigans can happen

4) There are things that can be done to deal with these problems

First, trading thin markets is attractive to some people because they generally have smaller stops in terms of dollars at risk. Many people just getting started get lured into thinking they are less dangerous. They are more dangerous due to this problem. When you study charts you look at where you would have bought or sold and assume in real time you will get those same prices. In most cases that is true but there are exceptions. There is no way of knowing when doing research when or where slippage will occur. One of the aspects of having a trading service is that at times you have to have the orders a little different than is ideal because you don't want to be the market.

Our group should not be large enough to have a significant impact but there is always the possibility of a traitor. Please if you are paying for this service do not give it away or resell it to someone else. This is strictly prohibited and if we find out we will cancel your access. You have gotten such incredible value for the money you are spending I would hope that would be enough. Please be good to your fellow man, doing this type of thing is hurting others. I am suspicious that this has happened because I can't recall the last time on a regular day in this market I saw opening action like this. It appears to me that our orders created this.

Second, the broker you use matters a great deal in fast market conditions. The large majority of us got 35 ticks slippage which is manageable. There are a couple that received much worse fills and it was caused by the broker they use. If you are using a broker that holds stop orders on their servers and submits them as market orders once the price is hit, you are going to get clobbered in situations like this. Make sure the broker you use submits the orders to the exchange when you submit them and does not hold them. The firm who gave the bad fills today holds them and that is why I left them many years ago vowing never to return. They screwed me on a few fills and I felt it was very dangerous to stay with them. I have to be careful about saying things on the web so I am leaving the name of this firm out of the text. I am using TD Ameritrade and they are just great and gave me the fill with 35 ticks of slippage

If anyone has any questions about their broker call them and ask how the stops are submitted. If you get an answer that is not satisfactory leave. If you are with this one brokerage I would suggest leaving they will never get this right if they haven't after all the years since I left. In addition to this their customer service is basically Helen with in beard in the Ukraine like the Mastercard commercials.

Third, having a batch of orders in one place is asking for some trouble in these thin markets so we are going to change how we place them going forward when we trade a light volume market. This leads to the fourth topic above. We are going to be using stop limits. In that case today we would have been filled but at our price and not with the slippage. I think this fill was very suspicious in many ways but we can avoid this with stop limits so that is what we are going to do.

Here is an actual trade we just closed out in the Swing Service, Cattle. This was not a great trade by any stretch of the imagination but I wanted to show it to make a couple of points.

We got short on the break where indicated and wound up exiting today on the open. This is kind of a schizo market to begin with and we noticed we were getting into a support level. We also were confronted with the weird market condition of the weather and were not quite sure what effect that was going to have, so we wanted to get out of some of the trades to reduce our risk a little. We got a profit of a smidge over $400 per contract here so it was better than nothing.

The point to be made here is basically we got a resumption of a down trend here after a fairly big pullback against the down trend. You can also see one of our indicators was going down supporting the trade. I have always felt that when confronted with something like this storm where it is almost unprecedented it is best to reduce your risk until things get back to normal. We still have some other trades on but we are less this one and decided not to do any new ones until things return to normal.

The Buy setup in the Vix still has not been confirmed by my second filter and also no prior days high has been taken out. As a result it is nothing other than a VIX buy setup at this point with no trigger for an entry.

Here we have the setup again with a close above the upper Bollinger Band and then followed by a close in the Vix below the open. Of the last 20 of these setups 12 have been winners and 9 losers so this is nothing to set the world on fire but it is an edge. I like to buy on strength and sell on weakness so I would not go long until a prior high in the price went which has not happened yet. Due to our unique situation with just electronic trading only I would be hesitant to take a trade here. However, the setup is here and if today's high were taken out tomorrow it would represent a pretty good reversal since we are sharply down as I type this. It might be worth a shot.

PFG/Vision

Things are pretty backed up with this situation. I could not get anyone on the phone today until I went through Robbins trading. I think you will be getting called by brokers to be hit up for your business. So far I have been impressed with what they have to offer technology wise but beyond that the jury is still out. I think the money will be available to withdraw or trade within a few days so be patient.

There are no new updates that I have found on anything else. I did hear a rumor that a second distribution might be coming in 3 weeks but I highly doubt that. I think the next step is what the judge rules on Forex and have no idea when that will be.

If you are in the trading service sign up to follow my Twitter so you can get updates during the day. I have to be somewhat non-specific because anyone can read it and I can't give away the trades there but I am twitting when we are filled on things just saying filled on a new trade etc.. It is up to you.

It has been recommended to us that we do a web site redesign by a consultant so look for that coming soon. Keep in mind when viewing our web site that it was created by yours truly for free due to the shortage of money from the PFG theft. As a result it is not exactly what I would like it to be but is serviceable.

Lets look to pick it back up after the storms and wish everyone well on the East Coast.

SHORT TERM BUY BUT CHINKS IN THE ARMOR

Here is one of the things that concerns me about the bigger picture of the stock market. You can see that for quite some time the Nasdaq has been the leader being relatively stronger in price at most recent price junctures. That has led us to ever higher prices. You can especially see the divergence at the lows several months back where the ES went right back to the lows and the Naz stayed quite a bit above them. Then as the rally started and we got the first pullback notice how the Naz had gotten back to the highs before the plunge that took us to the low and the ES got nowhere near it. This told us tech was leading which is what we want for a rally and off we went.

We now have a completely different picture with the NAZ showing significant comparative weakness to the ES. The ES has just retraced back to the prior pivot high where the NAZ has gone quite a bit below that corresponding price level. This is not what we want to see for a continued strong stock market. I still think we are in bounce mode for a few days here but after that from a short term stand point I am going to be looking for sell signals.

The other things that is a problem is that the NAZ is one week away from potentially shifting it's trend to down with my bands on the weekly chart. If we have a big up week this week that would be nullified so this week is pretty important. Here is a chart of a couple of different looks at the Presidential Cycle. I have mixed views on cycles. I do like them but I often find myself drifting away from them for some reason.

There have been instances where price has drifted quite a bit away from the cycle predictions so this is not the holy grail by any stretch. However, what does concern me is they both show a decline happening at the beginning of the year. When we combine that with the Naz getting relatively weaker than the ES we are starting to see some things lining up here. The trend has not changed yet and I think the FED will keep away from a big disaster until after the election since they are trying to re-elect someone right now. After the election all bets could be off here. If Romney were to win it will be interesting to see what happens with the FED. Maybe he is different than he represents but he certainly does not seem like a guy who would be a big fan of the FED buying ES futures. There was an interesting article the other day I came across about one of the reasons for the big down day last week was that most of the traders at the FED was off for the day. I guess on some level they need traders but it seems a little weird to have the word traders and the FED together. I think their strategy is to just slowly leak various things over time so that when it comes out that they admit to buying ES futures it will not seen like a big deal. Politics is fascinating even though it is incredibly frustrating. The strategic aspect of the lies, deceptions, partial truths and word twisting are very interesting.

Here is the case for a bounce.

Last week I mentioned that we needed to see a close below the open in the VIX to indicate a buy was confirmed and we got that on Friday with the PPT save that came in right on schedule. Over time this strategy of waiting for a close outside the bollinger bands and then the price to reverse and close below the open is about 60% accurate so it is nothing to write home to mother about. However, it does give us a good bias to monitor. As a result I think we are going to bounce for a few days here. There is a second qualifier I use for this that is proprietary to me that is not confirming this trade. Trades when confirmed by this tool have been very accurate but do not occur that often unfortunately. It does not mean that because that tool does not confirm this trade it should not be done it is just an observation.

Net net I am looking for a small rally here over the next few days then a sell that should be a larger trade to the down side.

PFG

The 30% has arrived and the transition so far seems to be going relatively smoothly to Vision. IRA's are not being handled correctly thus far. It appears the trustee has no way of distinguishing between them and regular taxable accounts. Stay in touch with your custodian and just be patient. They will get everything figured out eventually. 

I cannot for the life of me understand why they can't get the Forex stuff resolved faster than this. The only explanation I can come up with is that it is not in the attorney's best interests to do it because their fees would then be less. I really wish someone with the power of a Donald Trump would get involved in restructuring the bankruptcy process. There is nobody who could ever convince me that it is appropriate for attorney's to make millions while victims get fleeced. Perhaps a Godfather type resolution would solve this problem! The crime families have got it right, they resolve conflicts and disputes pretty efficiently don't they? The point is not to take that tact but at some point how many stories of people lives being ruined have to happen before something is really done about it. We know from the CFTC proposed regs that they have absolutely no interest at all in doing anything to prevent a PFG or MF from happening again. Now we know that not only did they do nothing to help prevent it but have no interest in stopping the next one. I can promise there is a next one and if we get into a big market slide again, more than one next one will take place.

They could have one sentence that would solve 100% of the problem.

FCM's will no longer have any direct access to segregated accounts. The funds will be housed outside of their accounts and can only be drawn on by the individual account holders. They need to make it physically impossible for these people to have access to the money, not illegal, impossible.

Maybe it is just me but it seems like every time some big scandal happens a GS or JPM person is involved. I think Gensler is former GS but not completely sure on that one.

TRADING SERVICES

Here is the plan for how we are going to go forward. Things are working out very well thus far in both services as subs who are enjoying the results know. What I intend on doing is establishing accounts in our company name that will just trade these trades only. There will be one for Bonds and one for the Swing Trades. This way we will have an actual account that trades every single one of the trades in our company. This is not as easy as it sounds.

I used to have hundreds of thousands sitting around before the PFG wipe out now I don't. I have established new trading accounts that I am trading that are far less than what I am accustomed to having. As a result I don't have a bunch of extra cash just sitting around looking for something to do. I should have enough once the initial distribution is available to me to set up two accounts. However, we have to open them in the company name which takes some time due to the process. I then have to withdraw the money from Vision which is going to take time. Next I have to deposit it into the company account, wait for it to clear, then redeposit it into a new Vision account. This is likely going to take a month.

Once it is all done we plan on also setting up an Auto trade program through Robbins Trading where people can sign up and get all the trades automatically done for them. The way it works is every time a trade is entered in the main account all the followers get the same trade. There are some challenges to this in that limit orders can't be done so I am trying to figure a way to deal with that since that is how we exit at targets. In any event once that is done we will have an option for anyone who wishes to trade them but can't get in front of the computer when they need to in order to make the trades. There is a charge for it obviously.

Eventually we will bridge into webinars and daily videos and all sorts of other things that will help traders. We are just getting started and the main focus is for the services to be profitable which they are. We are riding high now but as I keep saying repeatedly, it will not always be this good. There are going to be periods where we take losses I can guarantee that. In fact our very first trading the Swing Trades did take a loss and we have other trades that have lost in both services. This is part of trading you grind it out.

GUEST POSTS

I just had a comment about what I should be doing in the last thread and it led me to a place I was intending to go all along, Guest Posts. I am going to open things up for people to make posts on things they wish to discuss and put out there. If you have something just draft it and email it to me at cj@wearefuturestraders.com. I have to approve it obviously and I will not nit pick the content I just have to make sure it is appropriate, no swear words or otherwise types of nonsense. Somebody mentioned they thought I should talk about expanded volatility so lets do it, send me the post. 

The goal here is to broaden this out some beyond what I can just do myself. Ultimately we will likely have a trading room for daily interaction but that is also a ways off. Baby steps for now.

Good Luck trading this week

BUYING DIPS IN DJIA FUTURES

It is one thing to have a buy setup and it is another thing to get long

 The above chart shows that we have a Vix buy signal in the S & P 500 yet we are free falling. What to do?

NOTHING

As tempting as it might be to try and pick a low when a market is dropping like this I have learned the hard way not to even think about trying to do that. A market setup as I have explained many times is just that. It is a circumstance that on average favors a certain outcome. That does not make it a buy at the market situation. You have to have some type of indication that the trend is turning back in your direction before you enter the trade. One simple thing you can look at is to wait for the VIX to close below it's open. I have marked the last two times we get extended like this and when the VIX closed below it's opening. You can see that was a decent way to time the entry. In spite of the fact that we are very over sold and the VIX is very over bought, we need to see some sign that the current momentum has reversed. I do not see any evidence of that at this point in any of the tools that I use.

If you are a longer term investor this could be a spot to start legging into a position and then plan on averaging down if we continue to decline. I have spent countless hours trying to find a reliable way of picking a bottom when we get a sharp decline like this and have never been able to do so. I do not bother trying any more. 

The next chart is a trade we did in the Swing Trading Service recently. It is always easy to show a great trade and this certainly was one. All of the trades have not been like this and will not be in the future. However, we determined there was some weakness coming and tried to pick the market of all of those that were so highly correlated to short. We selected Crude Oil.

 I was asked by some why we didn't short the ES. Take a look at the next chart and you can clearly see why we felt the Crude market was weaker.

We were almost at the highs of the year in the ES while we were a very long ways below comparable highs in Crude. This was a large divergence and even though the ES has fallen a lot Crude has fallen more. This trade went to it's target very quickly. Our goal in the Swing trades is to catch larger gains which typically takes a longer period of time. In this case we went there very quickly so we gladly said thank you and took our money. I alluded to this in the comments the other day. If you decide you want to go Hog wild and short across the board during situations like this it could pay off. However, if you happen to catch the trades wrong you have increased your risks exponentially since all of these markets from Gold to Crude to Stock Indexes to Grains to Currencies, are virtually the same trade.

I do not see any new shorting opportunities at this point since I am looking for a bounce. If you are short stay short and look for targets to exit. I think a bounce is going to come soon.

Good Trading

NO TEETH PART DEAUX

Here are the exact proposals of the CFTC to make commodity trading safer

The proposal would enhance the protection of customers and customer funds by:

• Amending Part 30 of the regulations to require FCMs to hold sufficient funds in secured accounts to meet their total obligations to both U.S.-domiciled and foreign-domiciled customers trading on foreign contract markets, computed under the net liquidating equity method; Why wouldn't this have always been the case?

• Prohibiting FCMs from holding any positions in a Part 30 secured account other than customers’ foreign futures and option positions and associated margin collateral; This does nothing.

• Requiring FCMs to hold sufficient proprietary funds in segregated accounts and Part 30 secured accounts to reasonably ensure that the firms are properly segregated and secured at all times, and to cover margin deficiencies in customers’ trading accounts; This is already supposed to be going on. The nice secret nobody ever tells anyone is what happens if one client has a huge margin call they can't cover. Ultimately it falls on the other traders to cover the loss if the FCM can't.

• Requiring FCMs to maintain written policies and procedures governing the maintenance of excess funds in customer segregated and Part 30 secured accounts, and requiring FCMs to obtain the pre-approval of management prior to the withdrawal of 25 percent or more of the excess funds held in segregated or secured accounts if the withdrawals were not for the benefit of the FCMs’ customers; Management is who is perpetuating the frauds. This is like asking for the foxes approval for him to let a fox loose in the hen house. This is a DISGRACE. This is asking the criminals to approve their own crime for god sakes!

• Requiring FCMs to provide the Commission and their respective designated self-regulatory organizations with daily reporting of the segregation and Part 30 secured amount computations, and semi-monthly reporting of the location of customer funds and how such funds are invested under Regulation 1.25; This could be helpful, release the balloons the whole report is not a complete waste of ink.

• Requiring FCMs and DCOs to provide the Commission and designated self-regulatory organizations, as applicable, with read-only direct electronic access to bank and custodial accounts holding customer funds; Yes this could help but it won't prevent theft if will just catch it sooner. The courts will still hold all the money for an eternity and you will wind up with pennies on the dollar like we have seen now 3 times in the last 2 years. Sentinel, MF and PFG.

• Requiring FCMs to adopt policies and procedures on supervision and risk management of customer funds; Are you kidding? They don't already have this? This is supposed to be the most sacred haven of all brokerage accounts. Do you mean to tell us there are no policies in place to protect the money?

• Requiring FCMs to provide potential customers with additional disclosures addressing firm specific risks; and Does this mean they are going to tell us in advance they will steal our money? Additional disclosures is code for off loading responsibility. What exactly are they going to get us to sign off on now?

• Enhancing the standards for the self-regulatory organizations’ examinations of member FCMs. The standards are fine they just need to be followed. All they had to do was call the bank one time.

The proposals will be open for public comment for 60 days after publication in the Federal Register.

Does anyone reading this see anything that doesn't scare them in here?

It makes you realize how little protection there actually is in all of this and how at risk your money is. The most alarming sentence in the whole draft is the one about additional disclosures. Typically a disclosure is something you are made aware of that is averse to you and you are being asked to agree to take on risk.

After decades of traders have routinely put their money into brokerage accounts assuming that the risk was from their own trading decisions. Now in our new age of stealing from our brothers the policies are going to be to warn us more thoroughly how at risk our money is?

THE WHOLE POINT OF ALL OF THESE PROBLEMS IS FOR THE REGULATORS TO MAKE OUR MONEY SAFER NOT TO MAKES US ALL AGREE TO IT BEING OUR FAULT THAT SOMEONE ELSE STEALS IT AND TO HAVE MORE LIMITED RECOURSE.

I propose that we collectively between myself and all the readers draft a letter in here over the next couple of weeks that we send to the CFTC. Let's all chip in and work together to try and make some positive suggestions for things that will actually help everyone. The above draft does very little of that. I will start the letter but please make comments so we can try to make a difference. I know some of you who have not been burned by MF or PFG probably don't worry about this. I would hope that when you read what is above that is being proposed you come to realize how much risk there is in the safety of your funds. Please contribute something.


Off to the markets we go.......

Here is a chart I show often in here the shows when the VIX gets stretched to the point where a market reaction should occur. You can see the last two times we got beyond the bands what happened and we are beyond them again now. This could be a small bounce or a big one. There is no way of knowing what type of rally this will lead to if it leads to one at all. However, this is a tool with an edge so I am looking for a bounce in the stock market in the next couple of days.

In the days we live in now where so many markets move with the stock market, I also expect many other markets to bounce along with this. It is nice to see the stock market getting this over sold at this time of the year. It should be a bullish situation for a year end rally. We won't know if this bounce is a sell or a resumption of the up trend until it begins to take place. Once it does we can watch some other things to see if they are supporting a continuation or reversal. For the time being it is a long setup for me.

Please send in your suggestions for the letter to the CFTC so we can get cracking on that.

Good Trading

NO TEETH


I was happy today to see an article about the new regulations unanimously approved by the CFTC 

until...... I read the article

http://www.cftc.gov/PressRoom/PressReleases/pr6396-12

It is almost impossible as I get older to have any optimism that our government who is supposed to look out for us, will ever do so. I read through the items in here just expecting that they were building up to something really significant. At this point hours after reading them I am still hoping to find something. These new things with one exception will do absolutely nothing AT ALL to prevent another MF Global or PFG or Sentinel from happening.

The problems in all of these situations were top executives from Corzine to Wasendorf on down, acting improperly. The new regulations put the onus on middle management not to do the wrong thing. They are inviting comment so I am going to definitely send something to them. The one aspect of things which shockingly has not been put into effect is the electronic monitoring of the seg account balances. What this will do is catch the criminals after client money is already gone. It will not prevent a theft and once a theft happens POOF the money is gone.

It is only the fact that this blog is being read all over the world that keeps me in check from a swear word filled explosion. There is a saying in problem solving where you eliminate all the things that are clearly not explaining what is happening and what is left is what explains it. In this case that means that they want these type of things to continue to happen. It is what is left. They do not want to do anything to prevent a CEO from stealing clients money. How many instances in all aspects of the business world do we need to see where law abiding innocent people have their lives ruined by crooks? Mark my words there is at least one if not more than one more of these going on right now that has not as yet been discovered. Oh wait we are going to say middle managers have to do a few things that will solve the problem.

The problem is greed and egos of CEO's not mid level managers who have no power to do anything except take the fall for someone above them.

They need to make it physically impossible for the companies to have direct access to the frickin money

PERIOD PARAGRAPH END OF STORY

What to do?

First, if you are at all concerned about this write something to the CFTC

Second, take it upon yourself to take care of you, screw the CFTC.

Here is what I am doing. I am only having money in places where there are daily sweeps of excess margin into FDIC or SPIC insured accounts. The two firms currently offering this as standard protocol are TD Ameritrade and Interactive Brokers. I have been told by a reliable source that Vision plans on offering this in the near future. I asked Vision about this today and the person I talked to was not familiar with this new option, but they are buried just dealing with all the new accounts that were transferred to them.

We now know the CFTC and NFA will do absolutely nothing at all to help us. Even  though this is frustrating it is on us to do something about it. If you happen to live in Canada use local firms and you will get the best insurance in the world of up to 1 Million dollars against fraud. If you have the option of forming a company up there with someone who lives there do it. You have to have a Canadian address so you could form an LLC with a member who lives up there that has 1% and use their address to form the business. I think you should ask your accountant as how to best proceed, but do not put your head in the sand. If you are serious about trading you don't want to ever go through what I have believe me. It very nearly ruined my whole life.

In my mind I am sure I will have another segregated account stolen so at least I am going to be covered to some degree by some insurance. It will take time to get FDIC or SIPC reimbursements but they will come. I don't believe the insurance for the industry will ever happen. I would love to start a new exchange and try to run the CBOT/MERC out of business but I think that is impossible.

There is one other thing you can do but it will make your life very hectic and it will also become very expensive. You can keep very small balances and constantly wire money in and out of your account to meet margin calls. At $25 or more per wire this will wind up adding up to a lot of money over time but it may be worth it to save your financial life. The problem is that if you are ever are going to be a big time trader you have to have a decent sized account to support your trades. I can't trade the way I know to, doing this type of thing.

TRADING SERVICES

I get questions every day on things and I don't mind them at all since I love talking with people and also when people are paying you for things they have a right to have access. However, here is something I do not have the time or desire to do. I am not going to explain every trade. We are now up over $5000 of profit this month in the swing trades so for $100 I know of no deal anywhere on the web that comes even close to that. We have not been perfect we have had some crappy trades and we had a great short in Crude that was exited today. Keep in mind if you have been reading here for a long time some of the things I have written.

If we see Silver and Gold and stocks correlating like they are now we are not going to short all 3 that is tripling the risk in the exact same trade. We will try to select the one we think is the weakest if we are shorting or the strongest if we are buying. Crude was the weakest of all of them to us so that is what we shorted and it worked like a gem.

If we don't have a trade in a market that does not mean we don't have a view on that market. We are being responsible about not giving a huge number of trades for everyone to go hog wild. That is not how I trade and it is not how we will do the services. I am more than willing to give an opinion on a market we are not in if someone wishes to ask. Trading is about grinding it out and that is what we are doing. If we made this level of profit every month for a year I would be thrilled to say we made $60k on a one contract basis for this low fee. I do not know where we will wind up but I do know that I am giving my maximum effort.

The Bond System had another huge winner today so it keeps rolling along.

TWITTER

I am going to start using twitter my name is on the upper left hand part of the page so if you wish to follow me please do so. I may be busy so I can't sit there all day long and play but will try to be prompt and twit things I think are valuable.

I don't have much in the way of market insights today I thought it was important to cover this area once I saw the CFTC story come out today. I think we are in the bounce zone here in most places then we can look for another short term selling spot.

Good Trading

FUTURES TRADING - IT'S ABOUT THE PAST IRONICALLY

In as much as we can always go back and say I told you so, if you click on the link below to my post from a week or so ago I pointed this one out as a potential sell.

http://www.blogger.com/blogger.g?blogID=27784316#editor/target=post;postID=2969740620686962286

I also mentioned in recent posts that the stock market and the metals and energies would move together. You can see in the next chart that has also transpired.

You can see Crude has been quite a bit weaker than both Gold and Stocks so on a relative basis that is the place to short. I like to sell the weak and buy the strong. I don't always do that but it is a good rule to live by. We are now on a run down in these places so there is nothing to do at the moment but stay short if you are short and trail stops. The stock market is basically at the bottom of it's recent trading range at the moment. As a result it has been relatively contained thus far. The optimal seasonal buying time is generally right about the end of this month so we are approaching that time zone. If you are looking to catch the year end rally in the DJIA futures the time should be coming.

The dollar is on the verge of breaking out of it's down trend which would be very interesting if it were to occur. The chart has not really changed much from what I showed the other day. The most conservative way to play trend changes is to wait for the first pullback but sometimes you don't get them. You are damned if you do and damned if you don't. There is no approach nor will there ever be one that catches every wiggle.

The COT data is showing some buying on these declines but using that data is an art and also has it's short comings. I don't think any of that matters at the moment.

PFG

As far as I can tell statement of the money transferred are supposed to be available Tuesday. Since there are so many accounts I have no idea how they are going to get to all of this quickly. Presumably they have everyone's email address so depending on how good their infrastructure is they could manage it. Trade Navigator from Genesis is compatible with Vision so for me trading there could be seamless.

I was perusing a story on Wasendorf and his assets that are being sold and was blown away by how cheap that house and pool were being sold for. Someone is going to get quite a deal on those. I love the wine cellar he had being someone who is very much into Red Wine. I could never buy anything from that jerk even for a good deal.

The issue of Forex is presumably being taken up now but I can't find anything on it to give any insight. I have no idea what will happen there as I have stated before. The one feeling I always have when something goes to court is to expect the outcome to be different than I think. I am sure of one thing. Each day that goes by the trustee makes $650 and hour times 8 hours so if he can run the clock for years on this you can do the math. I think his target has always been the $24 Million in the company bank account. Their goal in my view is to take all of that in fees and I think they will be successful in doing so.

I am finding myself getting bitter about this now for some reason I cannot explain. I think it is almost like being in a trade for a long time that has not worked out and you finally bite the bullet and take the loss. I will get over it.

HOUSE KEEPING

We have fully switched over to Aweber for delivery of all of the services now and it seems to be going fine. Thanks to all of you who have signed up for something and for being patient for our learning curve on the email aspect of things.

POOF!

ANNIVERSARY OF OCTOBER MELT DOWN

A lot has been made over the anniversary of the big crash of October 1987 and I have no idea why. We have had many anniversaries since that have not resulted in crashes. If this were going to crash for economic reasons it probably would have already. There has been a tendency for Friday down days to have nasty Monday's that follow them so we will see what happens. I still see this as an up trend where we should be buying the dips.

You can see the synthetic measures of the commercial activity are buying into this dip which is normal and does not mean it can't roll over. That is always the case on the one dip the winds up being the trend change. It looks like any other dip typically but just keeps going. I see no reason to be excessively bearish on stocks at this point. However, I also do not think it is a buy yet. The ideal buying time is late October but my short term tools are going straight down at the moment so I am not stepping in front of this yet. With the fixing of the employment numbers that was done recently I also think all the stops will be pulled out to prevent a stock decline also. They are trying to paint this picture as pretty as they can for BO.

The one gut feeling I have that I cannot shake is that if BO wins the stock market could crash. This is not based in any reality at all or technical tools. The cyclical picture does show a potential nasty decline in early 2013 so perhaps that will be precipitated by a BO victory. I think the world is starting to see what a dangerous proposition another term for him is. I will just state what I have stated before about this and move on. If he wins the US will not recover economically in my life time. That is how badly he is going to change this country. I don't know if Romney can save it at this point or even if Reagan could. We have just gone so far down the wrong road I don't think anything other than a depression can clear out all the problems. I hope we don't see it but I don't see how all these bubbles that have not been de-leveraged can continue indefinitely. Perhaps they can they can keep this going for a while longer, but we are going to have to pay a price for all of this nonsense at some point in time.

I had mentioned the short side of Silver and energy last week and they both got clobbered. All of these move together now for the most part. I also mentioned the dollar might be setting up a buy. We have bounced but not enough to be looking at a long trade there yet.

Here is Soybeans a market whose trend has changed to down. I have mapped out a wish list on what would be nice to see for a short setup. If we could get a nice rally up into the red band it would mark the selling point I look for. Readers of the Newsletter know now what these bands are and can calculate them for themselves. They generally do give us good buying and selling spots.

PFG

The money was transferred to Vision Financial on Friday. As far as I can tell they will be issuing statements on Monday of the balances. I expect this to be somewhat of a fiasco to be honest so be patient. I think there are about 14,000 accounts so it might take some time to sort all of this out. I find myself somewhat down over this. I think the problem is that it is finally sinking in now how much money I had stolen from me that I will never see again. It should not have effected my trading but it has for obvious reasons. I cannot trade the way I am accustomed to due to not having the account size I have had for so many years. I am more pissed off at this guy now than ever and he better hope he never comes face to face with me. I don't see how he could anyway.

The total clamp down on information is just unacceptable and the trustee is just basically a little punk. He pouts every time someone raises an eyebrow over what he is doing while he makes millions in the process. It is shocking that he does not seem to understand the hurt that has been put on people by all of this. Although the money I am getting is a decent amount, it is still so far short of what I had I feel like taking by toys and leaving the sand box at times. There is virtually nothing being done to back stop commodities accounts and I don't expect anything to be done. The authorities don't want to help us that is fairly clear. If they could make an insider trade on something they are all in for that, but when it comes to helping the citizens there is certainly no interest in that if it does not benefit them in the process. The head of the CBOT says it will be too expensive yet he sits on $8 Billion in cash. I hope he loses it all somehow. It is supposed to be for a crisis and yet they have stated they will do nothing to help PFG victims. I say ......him and would gladly tell him to his face.

Lastly, if you had an IRA through Millennium there is a special version of the claim form you have to fill out and you need to contact them to get it. It was nice of them to keep that a secret. Some of my money was there in an IRA and I will immediately once I get it out move it to an IRA somewhere other than Millennium. The gal that answers the phone is one of the most unpleasant people I have ever spoken to on the phone and they will not have my business due to her going forward.

It is my understanding the Vision is going to be offering a similar setup to what Ameritrade and IB have with a securities account that money can be swept in and out of and get government insurance in the process. This makes having the money at Vision attractive to me. I will stay with them most likely because of that very reason.

My apologies if my posts have not been up to par the last week. I will get my A game going again.

Hope you are having a great weekend

ROUND MOUND OF REBOUND

One of my favorite sports nick names that was given to Charles Barkley during his playing days was the Round Mound of Rebound. We had a spectacular rebound in the Bond System yesterday immediately following the first loss we have suffered in 2 months. That gain exceeded the loss so we wound up net ahead between the two trades. This is the reality of trading.

As much as we all try to predict the future it is simply impossible to do. I would be willing to bet some people probably took the loss and passed on the next trade because they were so used to just winning on every trade that they got scared when they finally took a loss. If this is you and you are reading this you have learned a valuable lesson. Trading Futures whether it is Crude Oil, DJIA futures or Gold futures, is all about grinding it out and taking trades. There have been some people thinking the Swing trades are not as good because they have under performed a Bond System that won 13 in a row. Ask yourself what is not under performing my Bond System right now. The answer is everything. Streaks like this do happen but you cannot compare what is the height of peak performance to something else that is just getting started. You cannot draw conclusions in either direction because there is not enough data to fully evaluate both yet.

Further trading a system is completely different from trying to probe to catch larger moves. They are different approaches. We did have what appeared to be a few big trades going in the Swings that wound up reversing and being smaller gains than what we were shooting for. This is fully explained in the web site and it is a characteristic of Swing trading. You have to give the market a little breathing room to try and catch a big win. In so doing you get picked off sometimes. I know of no other way to catch a larger move. Please keep this in mind with the two approaches we are using.

Some questions have come up about placing orders for the Swing trades. It is going to have to fall upon the individual to figure out how to place orders with the platforms that they are using. I am not familiar with all of them so I will not always be able to explain what a symbol is or what orders can or cannot be placed. If you are having trouble with the soft commodities you are going to have to get with your broker to figure it out. I have no problems with the platforms I use placing any of the orders that are in the emails. I am more than willing to help but I just don't have the knowledge of many of the platforms and some of them I have never heard of before. If for some reason you can't figure it out one thing you can do is wait for the time you normally get up and see if the price has already traded through the entry level. If it hasn't just place the order. If it has place a limit order at the entry price and try to get it on a pullback. Often you will be able to get in on pullbacks. The best trades don't look back generally but this is just a possible suggestion. The easy solution is to get it figured out with your broker. If he can't accommodate these basic orders you probably should find another place to have your account.

The next chart is a market that is starting to look interesting, the Dollar.

You can see we have had quite a slide here and have moved into a sideways type of range. During this sideways move we have seen commercial buying become very strong. This typically has been a bullish sign in the past. If we also factor in that we had a break down below a clear trend line under the lows and then quickly reversed, it tells me this could be setting up for a launch upward. What needs to happen to confirm this is for the price to get above the down trend line I have drawn in here. If we just roll back down from here this setup would be nullified. If we break above this down trend we can look to buy the first retracement. A setup is just that a setup it is not a trade. To me this market is set up for a move upward but there is not as of yet a long entry to take.

Capisce?

BO IS A DAY TRADER APPARENTLY

FUTURES TRADING PRESIDENTIAL STYLE!

Since this is a trading website I thought it was appropriate to show a chart to make my point. It was claimed by someone in the debate that he had created 5 million jobs. The statistics show far less people are working than there were when he took office. As traders we understand what he meant. It is the equivalent of the above chart example. Someone really initiates a long where I indicate real buy. They then ride the thing down puke out of it pretty close to the low taking a major loss. They then send out a postcard showing they bought the exact low so come subscribe to their services etc.. Next they show the last spot marked current that shows the bogus buy they never really did and how well it has worked it.

This is essentially what was going in tonight in the debate when BO said he had created x number of jobs. He took the absolute low in terms of people employed which was in the middle of his first term, then conveniently used that as his starting point. He essentially is telling us he bought the exact low like the false representation we see in the chart above. This is like what was also on a post card some of you in addition to me got a month or so ago from a well known newsletter writer. POPPYCOCK!

The debate tonight was a donnybrook and funny to watch and it really was shocking when the one blatant lie by the President came out regarding Libya. I will give him credit he has taken the office to places it has never been but they are not good places. Romney got him to make an incredible error but this is what happens to people who lie. They lose track of what they tell everyone and they get caught no matter how smart they are. Honesty is the best policy. I really have no idea how that debate may or may not effect the election but it does seem to me that the sooner the debates are over the better off BO is going to be. He should stick to the View and that group of Ed McMahon's he has there waiting for him. For those of you who don't get that, he was a famous yes man for Johnny Carson who laughed at every joke no matter how lame it was.

Here is a chart with nothing on it which is something we all should look at from time to time.

What do we see when we look at something like this? What I see is just a series of lower highs and lower lows. All the way up to this point we had a series of higher highs and higher lows. There was never any doubt until recently where the trend was. I do not consider what we have now a pattern that says crash but what I do see is a series of lower pivots. Until a new high is made the basic trend is down. I read something today on the web that I have not verified but what it said was there was a pattern for up days of significance on debate days and down days on the back side. I have no idea if it is anywhere near accurate or if even there is a large enough sample size for it to be reliable. It was put forth in a conspiracy argument and that does not make sense to me. I see no logic in that but I thought it was worth pointing out in case anyone wanted to check into it.

For now I still say the short term trend is down albeit really a choppy environment to trade in. I do see a possible selling opportunity coming in energies in a few days. RB has come down some so we need a bounce now to short there. Crude is the weakest sister here but has a lousy looking chart pattern to me so I am waiting patiently.

We are still waiting for a couple of you to confirm your subscriptions through Aweber. We are converting to that next week solely for the orders. If you have not confirmed by then you will not get them. There are just a handful of you so please do that for us. We took our first loss in Bonds in a long time today and this proves what I have said all along. The system does takes losses sometimes. I know no matter how much I harp on this some people will be mad and leave when a loss occurs. I cannot do a thing about that. We are still way up for this month in spite of that loss so it is part of trading. I don't like losing either believe me.

I am hesitant to chase this short term rally that is taking place here so I am not doing so.

Good Trading

WHO ARE THESE PEOPLE?

One of the great Seinfeld phrases that rings in my head when I see things like this is the above post title. I mentioned in the last post how often this exact scenario seems to happen. The dumbest money in the markets has to be the short sellers in the first 30 minutes of the Sunday globex session. How many times have we seen this type of reversal off weakness on Sunday's? The only exception is when we have a very strong down trend. The weak opens in those cases can at times follow through. There is a trade here for those willing to do their due diligence and study this pattern. I will get to it but I have so many things on my plate I just have not had time yet.

If we get another 4 with the current regime they may let these opens go since a re-election will not then be at stake when stock declines take place. There is really no way of knowing what these people are thinking exactly when they reverse declines. Also not every decline that rallies is the result of manipulation just some of them. It is my hypothesis that they have shifted to the night sessions because they can reverse moves and spend far less money doing it due to the light volume. I have no proof of any kind on this I am merely stating an opinion. I think most people now realize some of this is not legitimate so I don't really have to get too heavily into that aspect of things anymore. Just remember that I was one of the few who were out in front on this and willing to stick my neck out and state what is going on before it became main stream.

I am not a huge fan of day trading but when we see a pattern as prominent as what we see above, that is based in a fundamental, I do think it should be traded. You might argue that this is not a fundamental but I think it is. If we know there is one trader out there bigger than anyone else, has no position or liquidity limits of any kind, why wouldn't we want to follow what they are doing. Trading is all about getting edges and exploiting them. The governments interventions do represent an edge so we all should be using this. The trick with this is that you cannot just blindly buy at a certain time or day and magically take advantage of this. I have tested out a lot of these scenarios and it is not that simple.

It is also not as simple as just buying the ES every Sunday when it is down 5 points, this does not work either. I think in reality we can complain all we want about what should or should not be happening. However, our job as traders is to make money using what we have in front of us. If we see an edge regardless of whether it should or should not be happening we should trade it. Here is a real life example of something I am about to do.

I have had a bank account at B of A for a very very long time. I recently decided to call and ask a question about my debit card. I talked to two of the dumbest people I have ever spoken to in a customer service department. I thought to myself as I got off the phone that this is on me if I leave my money there and something happens. I got to thinking about what Bank should be the safest. I concluded after considering many things that it is JPM Chase. The main reason I concluded that is they clearly have some type of back door arrangement with the government. They get off scott free every time they seemingly do something wrong. They become secured creditors in bankruptcies when they should not be. It just seems that every time it is possible for them to get a great "break" they get one. Why complain just go with it. I am opening an account there soon and closing my long time B of A account. JPM Chase has an edge so I am not going to complain I am going to take advantage of it.

I have not been able to get back after my mission to make a killing shorting their stock but as I stated before that emotional goal is what wound up saving me in the PFG fiasco. Having a good chunk of money set aside in an equity account waiting to assault that stock is what kept me out of bankruptcy when PFG stole all my money. Some very good traders have not been so fortunate. When your money is frozen for this long and you make your living using it, surviving is very difficult. Many have not survived and the trustee runs his mouth complaining that people are criticizing him while he makes millions and others go bankrupt. Poor baby he has been so abused! I feel so bad for some traders I know whose lives this theft has caused irreparable harm to. In some ironic way I owe B of A one for being so repugnant that I hate them. That hatred saved me and my family. How is that for logic?

I don't think the PPT reversal today means anything in the bigger picture. I am still hoping for some weakness to show up in the next couple of weeks to setup a buy for a year end rally. I think the initial look now is to sell rallies in the short term. After that buying a dip for a longer hold should be the play.

Here is a chart I showed the other day stating that I had seen good declines in the past come from this type of look, Silver.

I hope some of you made some Hay here this has been a nice move so far and has surprisingly detached to some degree from the stock market. I am sure the two will come back in line with one another shortly. I am not sure in which fashion that will happen. Will stocks go down to catch up or will this rise to catch up?

Please if you have received an email asking for subscription confirmation respond. We are going to have a cutoff day and if you do not respond in time you are going to miss the orders. There are some of you in the bond system that have not responded and we are going to exclusively use Aweber very soon. If you have not responded you will not get the orders when they get sent out. I sent a personal email tonight to those of you this applies to so please take care of this as soon as you can.

Thanks