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

IF THAT DID NOT SCARE YOU COMMODITIES TRADING IS FOR YOU!

I missed catching this fiasco live but caught some of it on the back side. As BO himself would say "folks" if that behavior did not scare you there is nothing anybody else can say. Keep in mind if something were to happen to BO this imbecile would become the President of the US! If for no other reason than that you should vote for Romney. That type of behavior would result in you getting your ass kicked in most venues. With Ryan's workout regimen I suspect that fight would not last very long. It was kind of funny on some level but the arrogance of this guy especially while he was lying through his teeth was shocking. The last person to realize one is an idiot is the one.

The reason I am bringing this up is that the sheer arrogant tone the government has taken on does have something to do with the markets. They think it is ok because they won ( remember it is the F You I won regime ) to do whatever they want to do regardless of what anyone says. The manipulation of the stock market upward and the windfall profits they are giving to trading arms of banks by tipping them off in advance of liquidity moves is just another example of this arrogance. Many individual investors have not returned to the equities markets so they have not benefited by this upswing the government has created. Although we know the markets are historically biased to the upside and should always be looking to buy into these huge drops when they happen, it is understandable why some people do not do it. The sheer lack of volume during this rally off the lows tells us average Joe has not participated fully. It has nothing to do with the VP being a moron but it does have to do with the culture of arrogance they are fostering.

You look at the PFG fallout and the government is not willing to do an insurance fund. HUH? There should have been one after MF Global and there will not be one in place when the next one happens. It will happen. There is just so much corruption on all levels from local school boards in San Diego all the way up to the oval office. It is no wonder people are losing faith. I am as well. That debate did not help matters much. I will just make one last comment about politics then leave it alone. If we get 4 more years of BO this country will take decades to recover from what he will do to it, DECADES!

We are in somewhat of an in between spot in the stock market right here.

We have broken the most pertinent short term trend line at are now at the 50 period moving average. The typical seasonal buy is a couple of weeks away here from a larger perspective. It appears to me on a short term basis this market should be traded from the short side here on bounces if we get them. Sunday's are notorious for early slides that get "magically" reversed on Monday morning so don't get too aggressive tonight if we start moving down some. It is probably more likely a buy. I have been working on a system for this but it is not complete yet. It is a tendency I have observed over and over in the last few years. Ironically just straight up it does not have an edge so I am digging deeper into how to trade this scenario.

You can see the sharp contrast between my new COT tool and the COT data. At the recent low I had a buy in my tool that was accurate where the COT stuff was a sell. Then my tool moved down into a sell to catch the swing down. I designed it to move faster so it is doing it's job so far.

We are at some interesting inflection points in a few places. The metals now are in pullback mode and at a juncture as I stated on Friday where rollovers have taken place. I think they need to hold right about here or we can see a decent turn down there. Since the world is still one trade, stock and metals markets will likely move together in the near term just like they have been doing for so long now.

Here is a chart I have shown many times the ES with Gold over layed on top of it. For those of you who think being in gold diversifies you from the stock market you might want to rethink that premise. This does not mean Gold will fall, if we get into big inflation everything including stocks will go way up. Just don't count on dodging a big stock decline if one occurs by being in Gold or Silver. They will come right along for the ride.

PFG Update

The trustee has put out a document addressing the issue of FOREX as the next subject to delve into. He is lashing out at the criticism he has received on all fronts claiming that threats and complaints will not effect the outcome. I am sure that is true. However, to watch him make millions while many have gone bankrupt is a frustrating process. If he can't take the heat he should not have taken this gig. After MF Global this was clearly going to be a challenging scenario. He has made millions already in fees so poor little baby. Maybe he could give me one of those millions and make me whole and I will stop criticizing him. What has been identified is about $45 Million in forex money that they have found which apparently is the whole amount that should be there. The real issue in cases like this is there are laws that govern bankruptcy cases. They establish a pecking order for creditors typically the secured creditors are first and unsecured are next in line.

What a judge will do in establishing this order is anyone's guess and I have no idea other than I expect a weird decision that makes no sense to many. I think judges are the single biggest problem we have in this country. They make decisions based on politics and not law see the Obama care decision if you question that. Forex is not segregated money so as a customer you would think that would make you an unsecured creditor but who knows. I could see any one of a number of outcomes happening here. They could take the forex money and split it up across the board. They could give it back to forex only which would be shocking in the face of what the law says should happen. They could give it all to the segregated account holders. There could be another scenario other than that.

The problem I see here is that if you decide to trade forex you sign documents and when you do this you are agreeing to the conditions by which they money is held. It is not segregated. You cannot come back after the fact and say you did not know that. This is why until it becomes segregated you should not trade forex. Perhaps there will be a ground breaking case here where the bankruptcy laws will be ignored and you will get all of your money back. That could set a precedent for further thefts which we know are coming. It could give you a de facto precedent for the next theft. I do not have any idea what will happen with this.

Wassendorf keeps claiming the amount of loss as a percentage is way higher than it should be. I think he is using that as leverage to try and get out of jail and flee or off himself. However, they have identified some 300 plus suspicious accounts so I doubt he would be able to recount the bogus numbers of that many accounts off the top of his head. They keep saying he is cooperating yet the full extent of the fraud is not known yet after this long? Something is missing here it is pretty obvious.

I am mentally planning on getting back about half the money and just moving on. If more comes along later it is what it is. It will likely be many years by the time that happens and too late for many whose lives have already been ruined by this. I have divided up my trading accounts into 2 places at this point and will keep dividing it up. I know I will have another account stolen from me before my trading career is done so it is my fault if I let it be such a large percentage again. This one was not my fault but the next one will be. Isn't it a shame that we have to resign ourselves to knowing and accepting that money will be stolen from us again and the government will do nothing about it?

Trading Services

We are sending out emails through Aweber and it is imperative that you confirm the subscriptions. There are still many who have not confirmed the bond service. Please do so this is inhibiting our ability to fully switch over to a more efficient way of sending out the daily orders. We need a couple more days to test Aweber to make sure we do not get into what happened last week. Everything seems to be fine but we are just making sure. I was very stressed out not knowing if people were able to get the orders when we had trades going and not knowing what to do. Always keep in mind that all the stops in both bonds and the Swing trades are the same until we tell you otherwise. If for some reason you get the orders late on a day or don't get them for some reason, defer to the stops and exits you already have. In most cases they don't change much if at all day to day.

We had to cut off two good trades last week that were already on that went on to make good profits because of the problems. If everyone understands what I just stated we would not have had to do that. It is our fault so we apologize for this. There is an awful lot that goes on behind the scenes with services like this and I was not prepared fully for the level of interest. I am thankful to all of you who have signed up for something and we have made money in all the services. So far so good.

Have a great trading week!

CUSTOMER SERVICE 101

Whether you are trading DJIA Futures, Crude Oil Futures or selling strawberries treating your customers well is imperative. We had a snafu this week during the transition from all of the orders coming from my email to a more efficient way through Aweber. I want to apologize to everyone for this problem. We are offering three things through the web site, so we have 3 different lists, one for each. When we send things out we don't want to mistakenly send things to one list that are only intended for another. There is an area in Aweber that displays the lists and has boxes marked exclude by each one. What we did when sending out emails to the Swing Trading list was check exclude on the other two lists thinking that we did not want the Bond traders or Newsletter people to get it by mistake or get it twice. It seemed logical. Well logic can often be a nemesis in trading and it was here as well.

What happens with Aweber is when you have people on multiple lists meaning they have signed up for more than one thing and you exclude a list with their name on it, they are excluded from everything else also. This is why some of you were getting the messages with the orders and some were not. If you were on the Swing Trading list only you got the emails and did not if you were on it and either one of the other two. There is a default in Aweber to the list you have at the top of the page and you have to ignore that area where you check exclude. I don't feel like as much of an idiot as I did a couple of days ago at 2 am when I was getting emails asking why subs did not get the orders for that day.

I decided to just exit all the trades until I could figure out what in the world was going on and unfortunately two of them have gone on to make a good amount of money. The last thing in the world I want is for people to be stressed out knowing what to do. I exited all the trades as well. It was the right thing to do. I am not going to be sailing merrily along doing something different than what I am telling you to do. I guess it shows you we know what we are doing in picking the trades yet we are a bit slow on the administration aspect of things. It is certainly better than the other way around. Net net we still made a profit this week again so that is the bottom line. Now that we have gotten to the bottom of the problem we should be fine for next week. Please if you get any Aweber emails asking for confirmation please do so. We still have a few people that have not confirmed on the Bond list. We will continue to send the emails out both ways for a few more days until we get everyone confirmed.

The chart above is a market that intrigues me at the moment, Silver. You can see the COT data showing it is setup well for a short entry. I am sure everyone has had the following happen. You are scrolling through your charts and keep coming back to one in particular. That is what is happening with me in Silver. I have seen a few waterfalls come from this pattern in recent years and I think we are going to see one here as well. We are on the verge of breaking down right at press time.

The stock market also is in an interesting spot here.

The kind of looks the same as Silver doesn't it? This is something I talk about all the time. You have to be careful about over leveraging on what is essentially the same trade. Neither one of these will likely go without the other doing so. We are not into the time of year yet the get too amped up about the year end rally but it is approaching. Perhaps what will happen is we will get a nice dip into the end of October to buy into.

I guess what we have learned this week is that I am not much of an administrative assistant type. I got just one bounce back on the last email we sent out through Aweber and they are kind of guarded on telling you who it is to protect people. However we narrowed to down to the person finally, ME! We had my email spelled wrong! Aye Carumba!

Thanks for you patience we are making money in spite of our back office learning curve.

YOU GOTTA RESPECT THE STREAK

 ( FUTURES TRADING EDITION )

We have quite a streak going in our Bond System right now as you can see above. Since I made this available at the beginning of August these are all the trades that have taken place. There was actually one more I gave a few people at the end of the prior month while I was getting organized that made another $600 which is not counted in the tally here.

We have had 13 consecutive winning trades at this point and of course I am worried! Obviously I want everyone to do well and clearly everyone has probably gotten way more out of this than they ever could have imagined 2 months ago. I am thrilled it has worked out this well since my reputation is on the line with this. Here are a few things I want people to keep in mind with this.

1) This is a trading system it will have good and bad periods, it will not always be this good I can promise there are going to be losing trades.

2) Do not start pressing the bets, maintain your money management strategy.

3) Do not start pulling back your bets, maintain your money management strategy.

4) Do not impose yourself on the system.

5) Respect the streak.

It is very hard not to get excited when a streak like this happens. Money comes in effortlessly and you start doing the math in your head about the millions this will add up to eventually. Please do not get ahead of yourself. The purpose of using a system is to take emotions out of it. Believe me I have seen plenty of systems over the years have very bad periods. This is the one I have that has survived over the years and continued to do well. However, I still know there will be draw downs even though we are not seeing one yet. I know they will happen when someone who has been watching finally decides to jump in having missed this huge run and they will be mad at me when they take losses. I cannot control this.

One mistake many make is to start pressing bets when they are "hot." This is the old vegas style approach. There is a reason why all those casino's do so well and it is due to you pressing your bets when you are hot. What I do when I go to vegas and play black jack is when I get a hot streak I pull my chips and get up and stop. I may go to the pool, or somewhere else, but I never press the bets. I know the odds are against me so when I get a streak I take the money. This is why I always leave Vegas in the black. It is never a huge stash, but it is a net plus experience. I don't trade or gamble for the action and I don't gamble much anyway. The odds are against me there. Stick to your money management rules about how many contracts you trade and do not press it during a streak like this.

At the same time do not pull back on it either. The way you get the system results is by following it not by out smarting it. It will out smart you if you try to do that. Everyone knows I made one judgement call with a trade that worked out very well for us. I am the creator so I know how this is put together. That decision was based on rules it was not a whim. Even with that aside I rarely do that.

Do not impose yourself on the system. I know some of you are seeing patterns on 15 minute or 60 minute charts that are lining up with something here or there and you are thinking you have this figured out. Trust me you do not. There are so many different components in this it would be virtually impossible for even a huge computer network to figure out how this works. It is just a different mind set you need to have when trading this way and it is not for everybody. The results are certainly what everyone wants.

Respect the streak. There are some funny lines in movies about this type of thing and they really ring true. If you are on a winning streak because you sprained your ankle or because your mother went to church and prayed for you, then so be it. You don't want to mess up a winning streak. Keep doing what you are doing and it will end on it's own. It is hard to learn to roll with them believe me I speak from experience. Every single error I have mentioned here I have made myself and that is why I am telling everyone this.

We have to roll with this until it stops. This system has had much longer winning streaks than this in the past. It has also had bad periods. Let's just let it be and see where it takes us. One thing we will not be doing if we get on a bad streak is going to a local bar and sleeping with a fat person to break the slump. I have never signed off on the slump buster solution!

NFP GATE - LOST IN THE OTHER SCANDALS

The doctored NFP report has been kicked aside in the face of numerous other scandals going on from illegal campaign contributions to Libyan cover ups. I read an article today that predicted the stir would calm down because economists are predicting the number will get reversed next month. Did any of these same guys predict the last number would be rigged? If not why should be think they would be accurate predicting it will be unwound? Wouldn't the reversal of it essentially confirm that is was fake like everyone knows it was? I doubt anyone will change their vote one or two days before the elections, they will have accomplished the goal by then. Ironically I had one of the busiest days ever in terms of blog readership discussing this yesterday. Interesting.

The above chart shows the trades from the Bond System which has been on an incredible roll. The last trade was exited for a big profit in the night session tonight. In spite of all the difficulty in the markets recently this system has continued to perform very well. I have had people ask for discounts on things. I realize that many readers are beginners and may not have a lot of disposable money, I was also there once. I have been moved back in that direction by my friends at PFG. However, for $75 per month the system has made $7500 per contract for the people that started with it at the beginning of August. I would say that is a pretty good return on $150 wouldn't you? I am not going to discount what is already the cheapest service of it's kind that I know of. A lot of work goes into all of this getting the orders out on time, making sure the trades are right answering all the emails etc.. You can do the math, I am not making a lot of money on this. 

Here is one thing everyone either trading this or considering doing so should keep in mind. Trading systems no matter how good they are do not win on every trade like this is doing forever. They have ups and downs. Please do not get too up or too down when the good and bad runs take place. It is hard not to be excited about a run like this, but don't go hog wild. We will have losing trades that I can promise you. The services on the site are pretty cheap so I am not going to give discounts. You have no idea how much work this is providing all of these things at the level of quality I am trying to. The other part which is the toughest part is the pressure of knowing these trades have to be good or I look like an idiot and everyone is mad at me on top of that.

If you are new take your time don't just jump into anything with me or anyone else. Figure out what you want to do. It might mean trying one of these for a month then cancelling after you find it is not for you. I am trying to provide good ongoing education in my newsletter. I can't go into detailed logic on all the trades in the services as to why they are being done. They are different approaches. The best way to use them in my opinion is to integrate them into what you are already doing. You certainly can do all of them just straight up if you want to. Much of what Michael and I do in these trades is proprietary to us. Over time we will discuss many of the concepts we use. However, we cannot just give it all away up front which I am sure everyone can understand. I think those using these services will benefit most by finding their own way to use them. Some of the trades in spite of our hard work will be no good that is trading.

Perhaps you will look at some of the trades that work out well and see some commonalities in the tools you already use that will help you filter trades or create your own methods. All of this is an ongoing learning process. The day you stop learning as a trader is the day you stop trading. There are always new things to learn. I hope all of this makes sense.

I do not see much for tomorrow that is new, the markets are in somewhat of a consolidation phase. The Naz has gotten weaker than the ES which has historically been a negative for the market, but it is not an absolute.

You can see here the purple line is much higher than the recent lows where the NAZ in black is basically right at it's lows. If you want to short the indexes, this is where to play. If you want to go long play the ES.

Good Trading

FUTURES TRADING SUPPLEMENTAL

 HOW TO BACK YOUR WAY INTO A NUMBER

7.8%

The book that was written by some notorious accountant about how to create fake numbers was dusted off and opened several months ago. We heard for months that the top line unemployment rate did not matter. Millions of jobs had been created. The way you deceive people is pretty simple, you get them looking the wrong way so they do not see the truth. This is how magic acts work and it is also how politics work. We were not supposed to pay attention to what is referred to as the head line number. The reason they did not want us focusing on that is that we all would have been complaining about how the number only stayed where it was instead of sky rocketing because of the number of people who had just plain given up looking for a job and left the work force. If we all had been looking at that the attention would have focused to U6 which is a more accurate rate of unemployment. That number is much higher above 14% so they did not want us looking there.

Mean while back at the ranch every month the prior months numbers were revised down ward. I am not sure of the number of consecutive months this happened but it had to be a record. The prior month revisions are always what has moved the Bond market. Rarely has the headline number had much of an effect. They used to have a bit more of a gap in the reporting where the revisions came out a minute or two later instead of at the same time like they do it now. I think that is just technology there is no conspiracy there. Since most people knew that was more of an accurate reflection of the unemployment situation that is when the reactions happened. There was rarely a pattern in those revisions. Some months they showed improvement others a deterioration.

Fast forward to modern day politics. Almost every single month for the last few years the revisions have been to the down side. Since the revisions can be reported in a more low key fashion, it is easier to down play them. The basic idea is make the headline what you want it to be, and play around with the other stuff that people pay less attention to. I think most people have no idea how consistent the revisions have been downward. 

Here are My 8 Crucial steps to doctoring a government number.

STEP 1 - Make the number what you want now and revise it to the truth in the next month and less people will notice. This way you do report the truth just on a delayed basis where people do not notice it they are looking the other way.

STEP 2 - Pick a random point in time where there has been an improvement in the number. In this case the up trend in new jobs and claim you have created X number of new jobs. The book says here that the spot should be of your choosing and never be one that makes any sense to anyone else. Remember you are trying to create a false sense of improvement. It is like picking the lowest low on a chart like a certain newsletter writer is doing right now, and saying he bought there. In this case you pick the lowest trough and cite all the new jobs you have created since that low. You do not EVER point out that the point you have chosen is not a logical place to measure from.

STEP 3 - Develop a plan to have the number be what you want on the date you want it. Give the data a chance on it's own to get there. If you see it needs a little help consider changing metrics that are involved in it's calculation. Do not under any circumstances tell people these changes you have made. Put them in small print so only college kids can read it. They don't care any way and the older people who do can't read it without glasses. The CPI certainly serves as a great example here. They now exclude basically everything any one does in order to live, food, transportation, energy, maybe even oxygen at this point. If you take out everything that has gone up as the result of inflation you can report there is no inflation. Pretty simple isn't it? It you take out the people who have given up trying to find a job you can shrink the work force hence getting the unemployment rate lower.

STEP 4 - If at all possible ease your way into the target number over time. This is why it is so important to have a long term plan of where the number will be in X number of months. It gives you time to "help" it get there.

STEP 5 - Sustain the narrative. It is imperative to stick to your guns that things are slowly getting to where the numbers show they are. A few eyebrows get raised but when you gradually do this the focus can be quickly shifted to something else, masking the ongoing fraud.

STEP 6 - Have a bailout plan in case all else fails. At times no matter how well intentioned your fraud attempt is you still can't quite get to where you need to. It is at these times you need a Black Mamba to close the deal. This always has to be something that first can be completely free of any fact checking. What you are doing here is moving the number a large amount right at the buzzer. This needs to be so obtuse that people don't understand what it is. You quickly shift the narrative to the head line number, the one you told everyone not to pay attention to previously. In the mean time you move a background number a huge amount that nobody pays much attention to. Think of Chris Johnston making a hole in one on a par 5 while 4 holes over Tiger is making a birdie. The hole in one should be the big story but everyone including my wife is watching Tiger play. In this case it was claiming that 600,000 people in just one month all of the sudden found part time jobs. From what I have read this is the biggest such number in over 30 years, really?

  600,000!

STEP 7 - Stay steadfast. You need to commit the crime right in the face of when most people would never think it would be committed. Some of the greatest frauds have been so aggressive most people never thought they could be happening. "Oh he would never do that now it would be too obvious." This is the type of logic you have to work with. Deny deny deny. Your demeanor is key here. Deliver the good news with enthusiasm. Challenge people to call you out. Most people will not have the nerve they don't like confrontation.

STEP 8 - Have an exit strategy. This is where many criminals get caught they never have a plan to eventually unwind the crime they just keep pushing. When creating a phony number you do have to have a way of getting it closer to what it really is after you have gotten what you want out of the fake one. In this case since the election is coming once it is over you will likely see it move back up slowly. It may never get to it's correct place, it may never have been there to begin with.

You can be sure of one thing. If Romney happens to win we will get the FULL MONTY the first NFP report that comes out. They will want to establish a bench mark that looks bad to show how they have improved everything later on.

I hope this has been both educational and entertaining. There is some sarcasm in here but there is some truth as well. This is not a party specific gig. There have been full classes for these courses at my school of sarcasm of both democrats and republicans. Ironically it is probably the only thing both sides agree on at this point, the need to doctor the numbers! Maybe that is a winning campaign platform, "I PLEDGE TO DOCTOR NUMBERS CONSISTENTLY." All you would need to do is state that over and over like an autistic person in the debates, I don't think you could lose!

THE MARKETS

It seems to be here that I have a lot of potential short term sell signals here. I still think bigger picture we are going to hold strong through the election but that does not mean we cannot have dips here and there.

I showed this last week indicating that we should get a little bit of a bounce in the ES which we have. Now we are shifting over to the other side and getting close to a sell zone. I have marked off the last times we have drifted into the zone here and you can see that in all 5 cases we either went flat or down. This is something I will be teaching in the newsletter. I can't have everything in one issue so people have to be patient. The idea is to educate over time and allow things to digest. There are a lot of ways to use the VIX maybe some of you have have better ones than I do. In any event this is telling us that we are in an area where a correction could occur. It would be nice if we got a dip into late October because that should be a good buy zone. I would prefer buying a dip into that time zone more than a rally. With the potential November 30 date looming buying strength in late October is not likely something I will be doing but you never know.

Net net here I think we need to be looking to play some shorts here in the next week. If you ever find yourself in a bind and need to doctor a number, please follow the steps above.

Good Trading

I TOLD YOU!

I have been telling people for the last few months that no matter what the real data was the unemployment rate would be reported under 8% before the election. We know that history shows no sitting president has been re-elected with a rate at 8% or higher. As a result there was no doubt in my mind that this month they would report it to be under 8%, viola 7.8%. My thinking is it was probably going to be 7.9% until that ass kicking BO got in the debate the other night took place. They then realized it might look more suspicious to make it 7.9% so they moved it another .10.

This is so incredibly obvious and disgusting. The arrogance of these people to think that they can do this type of thing is beyond anything I ever thought I would see from our government. Sometimes I would prefer not to be right about things like this. Now they can change the narrative. They are so intent upon completely changing this country regardless of what any of us think it is really almost like watching a movie. This can't be happening! If it were true it would be nice but anyone who is not biased in either direction can see right through all of this. Perhaps this blatant lie will work against them you never know. Sometimes when people are doing things they should not be doing they do not know when to stop and take things too far. This results in them getting caught. Here was the dialogue that undoubtedly went on somewhere. Boy that debate did not go too well, let's show them move that number down to 7.8%. However make no mistake, the plan was to gradually move this number down to this level for the last year. I think the last .10 was created by the debate.

Aside from my rant here which I know annoys some readers, the markets are doing what I have been talking about. They have rallied off this most recent decline. I showed the VIX signal the other day and it has worked very well. For those who did not see that here it is again.

This is from the 10/2 post. You can see that the VIX can be very useful for picking swings in the stock market. What would be nice for us would be that if at the end of November we were down into the lower bands. That is the time frame the weird Euro cycle predictor says to look for a top. For now it is stay long. Sometimes there is nothing to do but just stay with what you have. If you are long stay long.

The above chart is that of the Swiss Franc. We do have a COT setup on the sell side here that is pretty clear. We also have the typical up trend in price that is normally there when a sell signal sets up. The way I see this is no shorts should be done until we break the trend line I have drawn in here. For all we know this could soar and it will be the typical COT scenario where they fade the move for months until it ultimately turns. I always say using COT is an art not a science.

PFG

It appears the latest here is there is now a bulk transfer that has been approved to Vision Financial. There was a twitt from the CCC to this effect yesterday. I have not confirmed this yet at press time. If this were true it is possible it could be a small amount of good news. The twitt indicated within 11 days accounts of all sizes will be moved. The battle over Forex continues. For those with Forex at stake you might want to read up about MF Global and how it was handled there. I do not know I do not trade FOREX due to the unregulated nature of it. It is this exact scenario I always feared. Since MF seg people have most of their money back it might be a good precedent to look at to see if the forex people are still waiting or have gotten some of their money.

I have no idea, I just read the law on this which led me to the prior comments I have made here. As we all know a judge can do anything at any time whether or not it is legal or not. When things go to court you never know what will happen.

WE ARE FUTURES TRADERS

Apparently last night not everyone got the first email I sent regarding one of the trades we were in. I forward these to myself to make sure they go out and I got the confirmation on my end so I don't know what happened. Thanks to a few of you who pointed out they did not get the first email. For those who got the second one you benefited in getting a better exit price in the one trade. We are tracking the results based on the original even though it would enhance them some using the second one. I think everyone knows I don't operate like that. We are switching to AWEBER to make things better in this regard.

Bond System - make sure you follow the rules exactly as I state them. There was a great short trade yesterday that a few of you messed up the order on. If there are any questions please contact me, you don't want to miss one like that.

Swing Trades - we have made a little bit of money this week but got stopped out on our trailing stop trying to catch a bigger move in one trade. This is clearly explained in my web site. When trying to catch larger moves you have to be willing to give back some open profits and it does happen. We were long Coffee and looking good, then...... One other note. This is a discretionary approach. There are going to be times when conditions change and we react to them. If we see something that changes the outlook for a trade we have on that we are trying to catch a larger move in, we are going to get out. This will not happen often but it will happen. For better or worse the results in the services are something I will have to own and they will be what I am measured by. As a result I give them my best. If something I use to trade with tells me to get out of something we are getting out.

You can see that decision was the correct one based on today's action and it was also correct when I did this in bonds recently.

If there is any doubt about any email I send please contact me immediately. I monitor emails constantly.

Let's look forward to getting the PFG dough and moving forward with it with good trading.

OUR FUTURE, DJIA FUTURES

I am not sure whether Romney if he were to win could salvage the mess that is the US Economy. I am not sure if Ronald Reagan could. We have gone so far down the wrong road that without a tremendous amount of pain I don't believe a fix is out there for the taking. I did not watch all of this just some of it. I was surprised by Barry's demeanor. Maybe he just knows that he has the media so strongly on his side that they will spin any mistake he makes for him. He did not have his normal preacher type of delivery and voice cadence. It was almost like he was sedated.

I was watching the Dow Futures rally a little and it did remind me of the Gore v Bush fiasco. Every time it appeared Bush was going to win we got a 20 point move up in the ES. Whenever it appeared Gore would win it dropped 20 points. It was very clear who the traders wanted to see win. This was just the first debate so I don't think it can really be compared. However, in most people's eyes Romney soundly won the debate. Even that clown Axelrod acknowledged it which speaks for itself. I don't think we can draw any conclusions from the small ES up move of 7 points that happened.

Since the Federal Reserve is controlling stocks it does not really matter who wins. If the office changes hands they can't exactly go to the Fed and tell them to short the ES! This propping up effort will most likely continue. One thing we have to keep in mind about that is the issue of volume.

On the days where we get big down volume the PPT cannot always reverse those days. It is a billion dollar undertaking just in one day to reverse a 200 point decline. They can reverse these days when they can find a moment of light volume which is not always there. I cannot tell you the exact algorithms that are used to do this because I don't know what they are. I am sure they will never become public. The net take away here is the for the purposes of the stock market it does not matter who wins the election. Countries that have switched to socialism don't always have stock market crashes. If our total conversion to a European style government is implemented by BO it will depend on who takes over as the world leader as to where our stock market goes. I found in my studies countries switching to socialism tend to follow the path of the world economic leader. If we convert fully we will just have to see who that winds up being. If it is China we could have some trouble because of all the fraud that goes on over there. That whole thing is such a house of cards. There is so much fraud in the accounting practices over there you can't believe any earnings reports. Billion dollar companies can and have vanished over night.

I am still expecting an upward bias here in the DOW FUTURES into the election.

Here is a market that appears set up for a short term trade, Live Cattle. This is kind of a basic setup. We have had a trend change and now a retracement back up forming your basic flag type of pattern. The commercials are short and the Small Specs are long. You have to be really careful with the Small Specs in this market they can be commercials. You cannot just run out and sell when you see them long thinking you are being a wise guy and fading the small fries. Nonetheless here we have a shorting opportunity.

PFG

I have now sent in my claim forms so I will check to make sure they arrive then move on. They don't matter for the first distribution. All of the victims that had segregated money there will have their first amount by the end of the month. The one exception is if you have less than $1000 in which case you are not getting anything initially. If you have that amount you should not be trading futures to begin with. I am not aware of any significant new news. It seems the bad debt people are now offering 30% on futures and 10% on forex. The 30% makes no sense because we already are getting that and know there is another 15% being held back. Why would you take 30% when you know you are going to get at least 45%. The forex is another matter since that is likely to be a total loss. Taking 10% might be something to consider depending on someone's situation. My thinking is that it is such a small percentage you might as well go for the hail mary and say no.

COMPANY NOTES

You should have received a notice of one kind or another from us if you subscribed to any of the three things on the web site. If you have subscribed and not received anything please email me at cj@wearefuturestraders.com. We are already about half full in the two trading services which was much more than I anticipated. I apologize if I have been slow in getting things out. The Swing and Bond traders should already be getting the emails for the trades.

It you signed up for the Newsletter only you should have received a brief one time notice and will be getting a more detailed follow up shortly.

Here are some questions that have been asked and the answers:

If I take all three can I get a discount? We made these so inexpensive that we are not going to discount them. The Bond System for example is already ahead by more than 6 years worth of annual fees for it in just 2 months. I would say that is a pretty good value as is.

Can I pay monthly on the Newsletter? No. It is only $125 per year so trying to manage $10 a month payments from hundreds or more people is just not realistic on my end. This is so inexpensive as it is that it makes no sense for us to have an alternate arrangement there.

Will you have the dollar amount stop in the Swing Service? No. The reason for this is that you have to take the time to invest yourself in this business. I know some of you have enough faith in me to blindly take the trades but you need to use this as a learning tool. I think if you don't know enough about the market the trade is in to know what the stop is, you need to take the time to get to the exchange site and learn it. It will take a few minutes of your time.

Are the orders day or GTC? They are all day orders. New orders are issued on all trades every day for the next day's trading only.

I think I have covered the main questions that seem to be coming up. One word to the wise here. Take your time. The markets will be here tomorrow.

Good Trading

GOLD FUTURES WHAT IS THE FUTURE?

In spite of my big picture view of this market as the biggest bubble in the history of mankind, I have been bullish here the last few months. I have been trading this market exclusively from the long side. My bubble view has nothing to do with how I trade it is just an opinion based on years of observing things like this. One thing everyone has to keep in mind. This market is tied at the hip to the Dow Jones Industrial average. The world wide program to stop deflation by injecting money everywhere is lifting all the boats together. There is no reason to be bearish on gold from a trading stand point unless you are bearish on the stock market.

I do have some short term oscillator stuff showing a ton of divergence in this market. If by chance we get a trend change in stocks and that divergence is still in place when it takes place, I will be willing to short this market. When I just look purely at price action here I see nothing that tells me to be excessively bearish. We are just in a sideways correction move of a big move up. I don't see any reason to be too excited about trading in either direction here. If you look at the indicators at the bottom, they are both bullish. The top one if a basic momentum indicator that is flat in the buy zone. The second one is my indicator I debuted in the newsletter as my fix for the OCT problems. Those who got that know the history behind this. I will continue to enhance this tool to make it even better but for now you can see it is already pretty darn good.

Net net I do not see anything to do here in Gold in either direction. If you are a longer term trader and have been holding, the stop loss points are pretty clear here. For those who might doubt my above comment about the relationship of the DOW to Gold, I leave you with you chart below. This has the DJIA overlayed on top of the price of Gold.

Your honor I rest my case!

BACK TO BUSINESS

For those of us who did not get the memo about Futures Trading, that it should not or cannot be done, we plod onward. Imagine we were put into a time machine 10 years ago and decided to go forward to 2012. We get out of the machine and immediately go to the internet to check up on our favorite topic, prices of the markets. After we settle in a bit and get used to some of the changes most of which are minor, we get back to studying the markets.

As we surf the web we come across some dude who writes about the Futures Markets every day and see the above chart. Our first thought is wow look at how good this guy is, this forecast has picked almost every wiggle right on the nose. What is this? We read some of his older posts and find he has a general idea of what he is doing. Then we come back to the original post and start trying to understand what this forecast is. Imagine the disappointment or bewilderment when we find out that it is the net commercial position of the EURO projected 52 weeks forward. HUH!....SERIOUSLY?

I might as well have been in a time machine when I stumbled across this idea from McClellan. As far as I know he is the one who first wrote about this. Even when I try to logically sound this out it still makes no sense to me. On one level a bullish stand by the commercials on the EURO does make sense as being bullish for the US Stock Market. The world is flat now and good or bad things happening across the pond make a big difference to us. A strong EURO would indicate good economic times so that should be good for US Stocks. However, we also know commercials tend to be very early on moves getting bullish often way before a down trend changes. Here we are projecting forward a bullish forecast by commercials. That does make sense in terms of trying to take into account the problem of being early. The time frame of one year is problematic to me from a logical stand point. However, you cannot dispute how incredibly accurate this has been. It currently shows a clear top 11/30.

Time will tell but I am paying attention.

Outside bar Monday

Yesterday we had another classic day in the modern day markets with Outside bars galore. I wrote about a very specific mechanical technique for trading these types of situations in the newsletter that I sent out yesterday. You could have used that technique yesterday. As with most techniques we will be teaching in that series, that technique also is best used in combination with something else. It is an entry pattern technique. Days like yesterday are very difficult to trade. I made a couple of good trades and one terrible one. We do seem to be seeing more and more outside bars in the markets which is probably due to trading algorithms of big funds. It is amazing how they push price quickly at times. I usually do not like interventions but the HFT is causing some problems and they probably should get rid of it. It creates very illiquid periods and bad fills so it does not really perform any primary market function. I suppose you could argue that anything is fair game in a free society, although we are slowly having some of our liberties quietly being pulled back.

Here is the chart I showed the other day on the VIX updated. We are clearly in a buy zone. I will be writing about how to use the VIX in the newsletter going forward. I suggest readers study this for stock market timing, it is very helpful. It is not just as simple as seeing a reading and go buy or sell. It is in the bullish camp here on a short term basis at the moment which tells me this dip is a buy. How to enter trades is another matter, but it reinforces my thinking that a pre-election big dip is not likely. I dropped in to see my wife in the Political Talk Show War Room last night and was just shaking my head afterwards. I think the whole world has gone wacky. We have the media trying to throw an election which I never thought I would see in my lifetime. The justice department trying to make sure illegal votes are counted not discarded. We have all sorts of advice coming out from people about what should be done by whom. The whole process has gotten to the point where our opinions regardless of what side of the aisle you stand on, are completely ignored.

Each side has an agenda and they don't care who says what about it. Regardless of who wins there will be opportunities for us as traders and that is what really matters. If the Dems win there are some in that party who want to outlaw trading starting with Douchefett. I still think they are going to have a hard time pulling that off but there have been bills in committees trying to dip their toe into this. However, the markets do perform a function and at the end of the day that function needs to continue. The government can't do everything. I monitor it but am not concerned about it. You really only have to worry about the Dems if you become really wealthy. They are going to come for some of your cash if you do that is pretty clear. The wealth tax idea is something that is now coming up. I even heard a conservative talk show host say she was ok with that. GOOD LORD!

PFG

The trustee has put up the claim forms at the web site so you need to go fill those out and send them in. They have to be there by mid November, you can check the date yourself. This are for the purpose of distributions beyond the initial one. The first wave hits in about 10 days and the second at the end of the month. This is 30% of your account balance if you are US (4D class) and 40% if your were trading foreign futures (30.7 class).

The issue of the forex money is now coming up. I have written about this in here before. This money is not segregated therefore it is company money and subject to the pecking order of creditors just like a bank account balance of PFG. If you were a forex trader you are an unsecured creditor. This means that you are behind segregated account holders and other people such as US Bank who has some interest in the building. You are not going to get any money until everyone else gets all of theirs back. Since we know there was a substantial short fall your odds of getting anything hinge on lawsuits against the banks. If nothing happens there you are going to have a 100% loss.

There is a group of forex account holders making a stir stating that all of the forex money is intact therefore they should get their money back. The problem with the argument is bankruptcy law. Your money may be there but it is unsecured. It has been stated in the court proceedings by both the judge and the trustee that this is the case. Unfortunately unless the judge decides to ignore the law which can always happen, you are not going to get any of that money. If you can get a bad debt person to buy your claim for a Forex account it might be worth considering. You should at least talk to them if they contact you.

The other issue that is coming out is that Wassendorf apparently pulled this off by creating fictitious accounts with large balances that deposited no money. He then withdrew from the segregated account the money these accounts were supposed to have had in them. Since this came down so quickly I doubt he had time to delete all these fake accounts. He is disputing the total loss saying it is being over stated. I think he is saying that because he knows how he did this and that the total segregated amount is not $400 Million it is less. Once they identify the bogus accounts it appears our percentage could go up a little bit. What is perplexing is why all the statements about him cooperating are coming out are being made. If he truly was it seems they would know all the accounts now that were fake and have these dollars amounts determined. Maybe they do and are not telling us. The communication has just been awful in this case.

HOUSEKEEPING

I did get some comments warning me about Pay Pal by people and sure enough after about a week in business they have put a hold on withdrawals for 21 days. I have to call them but this is very alarming to me so I think I have to find another solution. Any suggestions would be appreciated. Send them to info@wearefuturestraders.com.

If for some reason you are not getting the emails for the orders or the newsletter and have signed up for it please email me at the above email as well.

I have not had much in the way of comments yet so make sure to give them good or bad. The best way to improve things is to understand if there are things that need to be fixed. I can't put everything I want to in just one issue, this is a process like Billy Crystal said in Analysis This.

Good Trading