GOLD BUBBLE NOW WHAT? WILL THIS BRING STOCKS WITH IT?

It is now time for all sorts of experts to come out and explain why this huge decline took place. The bearish people have one story and the bullish people have another one. There was one in particular that was made about some looming huge default of something or another. I have been asked what I think happened?

What happened is simple, the market was in a down trend and it had an expansion of price and volume in the direction of the trend, exactly what we should expect to see from time to time. There is no doubt this was one heck of a move, but it was in the direction of the trend, so from that stand point it is business as usual. One of the things people need to learn and it takes time and some lumps like this to learn it is, you need to trade in the direction of the main trends. You will not always be right, but what you will get is the larger moves.

For those of you who are reading desperately trying to understand "what went wrong" you are wasting your time. Let's say you finally find the one MIT grad who truly turns out 20 years from now to be the guy who identified some exact intricate pattern that triggered this acceleration, what good does that do you? Wouldn't you rather be a dumb ass who just knew the trend was down and knew nothing about fiat currencies, stores of value, Jim Rogers, etcc and was just short the market because you did not know any better?

I did see one story that someone sent me a link to where one gold bug actually admitted Gold is really just a commodity and it is not a store of value. LOL! Of course, that is what I have been telling people. Think about this and look at the next chart. What about if you knew Gold was a commodity that generally but not perfectly tracked the stock market. You were in the year 2002 where Stocks were completely out of favor and you wanted to go long stocks. Wouldn't it have made sense to the simpleton to have bought Gold?

I am not sure about you but if I showed a 5 year old this chart and asked him if it looked like these two things moved in the same direction or in opposite I am sure he would tell me they move the same. All of us want to engage ourselves in understanding the why of things but it is the what that in the end matters. I personally cannot imagine going through all the brain damage you have to in order to go through all of these arcane economic theories of macro economics and then trying to make a trading decision from it. How about just following the trend putting on the trades, then going to a sports bar with your hat on backwards with your buddies and saying fuck a lot!

Going back to my reference to the movie Arthur, "of course I took the money I'm not crazy." That is the guy I want to be not the one with the bow tie, horn rimmed glasses and flannel slacks wowing audiences about economic theories. There is a reason economists rarely catch bubbles correctly, they are tied up in their underwear with all of this nonsense. The way it looks to me now on just the basis of being a dumb ass with no other ideas, the next price target appears to be 724. Does this mean we will get there, of course not. It is simply the next significant support point. Often these targets are not hit and even if this one is it will take time to get there. The moral of the story is we are in a down trend, sell the rallies. We might get a good sized rally in this one based on how sharply this dropped, but it will be a sell when it happens. Keep it simple.

Will this result in a stock decline?

The same logic should apply to this discussion. The stock market is still in an up trend so it is not the same scenario as we had with Gold which was in a down trend. There are ideas going around about whether we will get a margin call selling wave in stocks and I don't think that will necessarily happen. What you have to keep in mind is that the stock market is where it is because of the way the FED is manipulating the ES, so will the FED have margin calls? Will they stop calling B of A ( allegedly ) and telling then what they are about to do in t 30 minutes so they can front run? I doubt it. The individual investor leveraging is not what has created or carried this rally.

 I am concerned that the stock market is a bubble but as we saw with Gold and Real Estate and the Internet bubble, these things can often inflate for longer and go farther, than most people can anticipate. The trend has not broken yet.

I like to keep it simple in this regard, time for the sports bar and the swearing, and oops don't forget your hat!

Good Trading

GOLD BUBBLE HAS POPPED NOW WHAT TO DO IF YOU ARE CAUGHT ON THE WRONG SIDE?

Apparently nobody thought my picture of the FCM heads running with bags of money was funny? I guess I have to work on my comedy a bit. As we watch the unwind of what I have been consistently calling the biggest bubble in history if you go back and read all of my posts on this over the last couple of years, the question is what to do if you are caught and getting smoked? My answer will surprise most of you. Today was interesting reading all the takes on what has transpired and one thing came to mind that made me chuckle. There is a line from the newest Bond movie where the Bad Guy who is kind of funny says to Bond, "James all this running a shooting and fighting is just exhausting" as he was getting ready to shoot him. When I read through all the explanations of what happened, I got exhausted. I can't imagine working that hard and creating all these obtuse reasons to explain the obvious. The market was in a down trend and we got an accelerated move in the down trend. That is it, that simple. Big moves most often happen in the direction of the trend. Why get into all this exhausting screaming and fighting over it? Yes there were possibly big orders in to sell, but there always are big orders in the direction of the trend be it up or down.

YOU STICK TO YOUR PLAN

All of the things that surround bubbles and how they get built then ultimately unwound is pretty consistent. This is why I have been very good at spotting these things consistently. One aspect of the process is one that relates to what to do now if you are caught?

If you are convinced that it is a safe haven asset you should not be deterred by this one bit. That is a long term view of things and you should be buying more on these sharp declines if that is your plan. It is not mine and I am in the opposite camp in regards to that as readers know, but if that is your view stick to it. If you have identified a scenario where you are proven wrong if something happens, follow that also. I am addressing this whole notion of Gold being this magical savior in great detail in my Newsletter this month.

What often happens in bubbles is people go in with one objective and get moved by rhetoric and change their plans. I am sure there are some people who initially went in lightly then ultimately bought the story and levered up as prices rose. Now they are getting killed on the add ons and don't know what to do. This is why you always have to have a plan, it really helps during situations like this. Stay committed to it. If you are going to hold this for 10 years no matter what, don't listen to shorter term people. I have been on record as consistently warning this would happen and that was from a longer term stand point, so I have not been caught by surprise. However, if you are someone who has bought the story stick to your plan whatever it is.

I have one long term argument that I am sure bullish people are looking at on the chart above. If you are a wave counter you could certainly claim this as an ABC correction in an uptrend. There is very good symmetry to this which supports the argument. The next step is you place your retracement ratios on the chart and try to pick a point in space to buy. You will see my view on Fibs in my website in a video I have there, however some people live and die by them. To me this price action is more much like a wave 3 than a C wave in Elliott theory, so I would have a 1-2-3 count here which would call for far lower prices. It looks to me like the target on a monthly chart would be 724 at this point.

The main take away from this post is that stick to your plan. If you are a bull act accordingly, if you are a bear act accordingly. No matter what side you are on don't get tied up in all the BS stories on either side trying to explain things. It hardly matters what the explanations are. We are in a down trend now on even the Monthly charts. If you go back far enough you will see where I said when it breaks we will see consecutive $100 down days and that is what we are seeing. When bubbles pop they are great opportunities even though they are hard to time due to the nature of how they are constructed.

I have been saying I am getting a bad feeling about the stock market and we are starting to see the first sign of some real weakness today. For those who read the Newsletter and asked me about the difference in the pattern between the Russell and the ES, you are seeing how well that tool I gave you works. That alone is worth years of the cheap annual fee for these monthly releases. I hope some of you used that to your advantage in your trading. In looking at an ES chart, 1533 is the key short term level that needs to hold. I suspect Ben and company will be buying heavily during the night sessions if we get close to that level to try and hold it above it. If we do get heavy volume they won't be able to hold it up.

You can see in the above ES chart my highlight bars turn back to red if today's low is taken out tomorrow. I would not stress out about what they are you can see they have not been that great recently going back and forth incorrectly. We also are nearing a pretty significant short term pivot area. If we get below that we have the first sign of some further trouble. It is not nearly as significant as the Gold support level I had pointed out at 1530 ish, which was a level that had held for months. This is a very short term point. What I am looking for is a break of this and then a bounce. The Russell as already blown way through there, remember I pointed out how much weaker it was. This is likely where I will sell the bounce.

Stick to your plan regardless of whether or not Bill Gross, Chris Johnston, or Zero Hedge agrees with it. I think I have made my view pretty clear. We are experiencing an enormous melt down so there is going to be a violent snap back here at some point probably soon. If we were to get another big down day that is likely a good profit taking point.

 Man up!

DIVERSIFICATION, THE BEST REASON FOR SPLITTING UP YOUR MONEY

For those of us PFG victims and for those who will be victims of other FCM crashes that are surely coming, I think you should save this blog post in your favorites and refer back to it over and over. This is probably the most important article I am ever going to write.

Look at this chart, which shows the Gold crash today ( Friday ). This could be a crash or an explosive rally in any market, it is just the one that is at hand now. With the story about IB that came out as well as the others, and in the wake of PFG and MF and Sentinel and all the others, we know one thing with 100% certainty. At some point in the future and probably not too distant future, some of us are going to wake up with our accounts frozen due to a FCM bankruptcy where they have stolen segregated funds. In this instance you will not be able to place any trades, and you will have to sit there and watch your positions get decimated if you are positioned wrong waiting for a liquidation process that in the case of PFG took two weeks. During that period you will not be able to do a thing to protect yourself in those accounts. This is exactly what happened to us with PFG. Keep in mind that even if an FCM has not stolen segregated funds which is the in vogue move, your money would still likely be frozen up in the bankruptcy process for a very long time. The whole concept of segregated funds is that they are supposed to be separate from this process but we have seen that is almost never the case. There are no segregated funds, that is an urban myth.

Here is what you can do to protect yourselves against this. If you have another account somewhere, you can put on opposite positions essentially hedging and assuring that your net exposure in your total portfolio is zero. With PFG they wiped out all existing orders so even if you had a GTC order in it was cancelled and you had to wait until they got to you to have your trades exited. This cost both Michael and I dearly with PFG. I always had previously had other accounts so I could hedge in this instance and was fooled by Gensler that piece of garbage into thinking everything was ok. I would take an Octagon fight with him as a fall back to my Wasendorf request since that is going nowhere. I see why Barry wants him to serve another term based on how dishonest and corrupt he is. He and holder should get a room.

Granted this would not be a perfect hedge because you will never know in a timely fashion when your positions have been liquidated since the communication will be terrible. We had no idea at all how we stood and there was nobody we could call. If you put on opposite positions in other accounts you can at the very least minimize the damage of a naked position in a situation like we have now with Gold. You would likely be net naked the other way at some point without knowing since the communication on your exits in the bankruptcy will be late by a few days at best. However, you have protected yourself as best you can. I think the ideal balance is really dividing your trading capital by 4, having 4 different brokerage accounts. This way the theft will only be 25% of your capital. Beyond that the next option is to use the idea of Notional Value.

What this means is that if you have set aside $100k for a trading account, deposit way less than that in the firm but trade it as if you have $100k. If it comes to margin calls wire the money in. Initially I was against this idea and it does take some mental toughness to see the inordinate percentage swings in what you see in your account statements. You have to view them within the context of a $100k balance. This is what I am doing now because of how sure I am of many more segregated thefts. The regulators have created a scenario where there is nothing really to fear if they decide to swipe some money. If you are a democrat you won't even be charged with anything see John Corzine, so why not take a flier. They will catch people sooner now but that will not save your money. Once it is gone it is gone. Just because they happen to catch someone sooner, the firm will still have to go through a bankruptcy process that will take years and your money will be gone, tied up in the process while everyone else gets paid their Corleone's for doing nada. They can't just claw back money with a phone call just because the NFA might be lucky to catch someone through electronic monitoring. You need to understand that once they catch them it will just start a multiple year process, you won't just get your money back and be fine. Keep in mind that if they steal your money and are caught the very next day after using it to make a trade or to run their company, the process of getting it back is years not days or weeks. As a result catching them sooner does not really mean much. It could make it easier for the trustee to claw back the money once the bankruptcy process unfolds, but that will be at least a year from the shut down if not longer.

Create your plan in regards to this and stay with it. The world has experienced a sea change and the days of large balances being safe are long gone. Do not make the mistake I did. I cannot emphasize enough how important this is if you are serious about trading. My trading was absolutely debilitated for 9 months due to this. Protect your money nobody else will. I think if you read the IB response to client inquiries and reconcile that with the complaint from the regulators, something is very wrong. This two versions of the same incident are quite a bit different. This is especially strange in light of the fact that they supposedly self reported. I know what I would do.

If it does happen to be true that the model of the FCM makes it such that they cannot operate profitably on their own then they should raise commissions to the level that makes the business viable. We have seen this in many industries when cost cutting happens through competition, only the strong survive. Monitor the earnings of the companies where your money is and if they are weakening dramatically take off. If you have the guts to have it at a private company now I tip my cap to you, you have more guts than I do. At some point in the future perhaps many years from now there might be some type of insurance plan but I doubt it. It is pretty clear that the whole wall street insider gig is living off OPM ( Other people's money ) so if the segregated money was truly segregated the whole premise of the game they play would be gone. This is why I expect nothing to change and more shenanigans to go on. It is good for business.

GOLD

You may have caught me twitting about this and for those who read here regularly you know I have been calling for this for a long time, you can read the archives. I have recently been writing about it a lot. I am not happy to see this melt down because millions of people have been suckered into this just like every other prior bubble that has ever happened. However, if you are one of the people who got suckered, it is your fault for not doing your research and discovering that all of this BS about safe haven is exactly that. If you are a Newsletter subscriber you will see full coverage of this in the next issue. It is too bad since I have already written the draft, that I did not feature it last month, but I was on record in here on many occasions warning of exactly this type of situation.

When the next over hyped bubble happens and experts who make money from you buying into the story start talking, raise your middle finger then turn and walk away, in that order. Timing bubbles is almost impossible so there was no way of getting the exact high. Where you can save yourself is by not chasing markets that are extended. The stories always get really good right at the tops. The Stock Market is getting into this mode right now. We still have a tremendous up trend but the market is rising so contrary to so many things that should cause it trouble, it is a matter of time before price marries up with everything else. At this point I do think it is becoming a bubble being inflated by the FED to manipulate public perception. This does not mean it cannot go higher. it is likely we have low rates for many years to come and that is the main driver of this bubble, so timing this one could be really tricky. I admit to being early on Gold. The conditions for that bubble to burst were there for a long time before it finally did. Now we are getting the "it is still a great long term investment" story. Ughh, these guys just never quit. I remember the gal who cuts my hair telling me she was loading up a pyramid of condos in Texas against my advice in 2005 - 2006 claiming it was as an investment. Needless to say she puked em all out and lost hundreds of thousands of dollars. When someone tells you Gold is a great long term investment, your thought should be:

NO IT IS NOT

It is a commodity that goes up and down, trade it. It will become a good investment again under $500 or somewhere in that range perhaps a bit lower.

Trading a market in a bubble phase is no different than one that is not. It is more for longer term investing that identifying bubbles is important. What you don't want to do is buy into them late. You need to keep your original position until the time comes when the trend changes. There is no way of knowing how far they might go. When you pick price levels in space against trends you are asking for trouble because you are against the trend. Surprises come in the direction of the trend most of the time like today in Gold and Silver. They are both in downtrends on all time frames, so a big down move is less surprising than a big up move would be.

Gold will not go straight down under $500 without various periods of rallies and sideways moves, but there will come a time and we may see it right here where the emperor is exposed and all the weak hands rush the exits all at once. This will result in consecutive $100 down days which we could see right now. This will be very interesting to see what happens. After today we are short term very very oversold, but the trend is down. We are likely to have a snap back here after today, but we have a waterfall out there lurking that is going to surprise everyone except those of us who trade commodities. For us it is business as usual since we have seen the boom and bust cycle many times. Ho hum business as usual.

CHASING THE HOT HAND

I was on a conference call today with some top traders, some of the best in the business and one topic came up that I found interesting. Every single one of them with no exceptions has had or currently has one of more trading services. I asked them at one point how they handle the ups and downs and surprisingly they all said that one thing they know will happen is the minute they get on a hot streak new clients will pile in the door. They also said the minute they get on a cold streak everyone leaves. This type of herd mentality is why most people do not get ahead in trading.

There are many counter intuitive things you have to do and believe me it is not easy to do some of them. One of the traders, probably the most well known to me of all of them, mentioned a trading program he had that went through a good sized draw down last year. He told me the very last client left the day of the low in the draw down and by the end of the year it had far exceeded the prior equity peak. The problem of course is that not one single person of his original group was around to see the turn around and new equity high.

If you look at the chart above would you want to be the guy who bought at the high? That is the equivalent of chasing the hot hand with trading programs. I am not picking on that market in the chart, it could be any market, it could be the stock market. The point is that getting in after a rise of that amount is not a high percentage play.

If you plan on following a trading program from me or anyone else, I think it is a good idea to outline your plan. If the plan is to go do something define how you will do it. Set it aside for one week and do not think about it. After a week come back to it and see if it still makes sense. I would be willing to bet that if the plan was originally at one point to find the hottest trader you could find and just follow him blindly once he gets hot, you would think a week later that might not be such a great plan. It would be a great plan to follow a great trader, but it would not be a good plan to wait for him to get on a hot streak. It would be a better idea to wait for him or her to have a down period. I will give you a real life example in my life. Last month we had a bad stretch in our bond system and Ryan at Robbins put a new client of his into my Bond System atfer the losing streak. The logic was that he believes in me and my system and told his client if he wants to follow me now is the time to do it. The client thus far has 3 trades all wins, the last 3 trades we have done.

Whether it is me or anyone else, the time to start following someone if you believe in them or their programs, is after a draw down not after a big run up in equity. This does not assure anyone of anything, but it is a better probability play. It is how I manage my money with my Bond System. When it goes through bad periods I trade it more aggressively at some point looking for the reversion to the mean. There is any guarantee that a draw down won't get bigger or just keep going. However, we know there are always going to be draw downs, so if it is in your own trading and you believe in what you are doing stick with your plan. You establish and uncle point and if you reach it stop trading and re-evaluate. The uncle point needs to be realistic, it can't be 2 ES point on a 75 tick chart, and it should not be $5000 on a 75 tick chart either. Something more moderate in them middle would be best.

The moral of the story is don't follow the herd they always wind up going off the cliff.

Have a great Friday and weekend next week is bound to bring some action since this week was quiet.

SEGREGATED FUND THEFT

This is a picture taken by reporters at a recent commodities industry meeting of a couple notable president's of FCM's. It reminds me of one of my favorite movies Arthur where at the end he comes back over to Susan and said "of course I took the money."

The story broke yesterday about Interactive Brokers being fined for screwing around with the rules as they pertain to segregated funds. I know I have readers and clients who use this firm so I thought it would be a good idea to talk about this incident.

It is amazing how common sense is never allowed into conversations to solve problems. When treatment centers treat drug addicts they take away their access to the drugs. The solution to the issues with Segregated Funds ( now that term is a f.....king joke at this point ), is as simple as the day is long. Take away their access to the drugs.

PERIOD

The only way this problem will ever be solved is to completely remove all access to client funds. Of course the industry does not want this because then it takes away their drugs. The have to fall back source to steal money from in the event they get into a bind. The temptation is simply too great, lose your business or take money that is just sitting there. I think since we are seeing so many incidents of this that the temptation to screw around with the money is too great for most people to pass on.

I have to admit to not being the most objective person around when it comes to this now having been burned. However, if you look back at one incident after another of a company making a public statement trying to soothe angst, when a story has broken, it is very hard to believe any corporate executive. Wasendorf of course released one of these statements after MF Global. I remember Lou Saban the football coach releasing a doozie the day before he changed jobs. Unfortunately lying has become so common that it is almost part of the job for a CEO. As a result I do not even think it is worth any effort reviewing the release from IB on this matter. What would you expect them to say?

I have no idea whether or not there are some deeper issues going on here or not. I left this firm long ago because of their terrible fills and customer service ( Peggy from the Ukraine from the Mastercard commercials ). I did mention I was concerned about them when I saw them getting into real estate loan with almost no margins at all. That told me something might be going on. That was a year or so ago, but it seems to me that the time of when this violation occurred was possibly around that time. I am not sure about this I am thinking out loud. I am going to use something they gave to one client in an email here which was news to me.

The protections available under the Securities Investor Protection Act ("SIPA") are only available in the context of a liquidation proceeding of a SIPCmember broker-dealer and relate to the "custody" of your securities at the SIPC member broker-dealer. Thus, if a SIPC member broker-dealer were to fail at a time when a customer had securities and/or cash from or for the purchase of securities in the custody of the SIPC member broker-dealer, in most instances it would be SIPC's obligation to restore those securities and cash to the customer, within statutory limits. That does not mean, however, that the customer would necessarily receive the original value of his or her purchase. SIPC does not protect against the decline in value of any security. In a liquidation proceeding under the SIPA, SIPC may advance up to $500,000 per customer (including a $250,000 limit on cash in the account).

Interactive Brokers Corp. and Interactive Brokers LLC are both SIPC members. However, other entities using the same name, such as Interactive Brokers (U.K.) Limited, are not SIPC members. 

SIPC does not protect forex transactions. SIPC only protects cash to the extent it is on deposit for the purpose of purchasing securities. SIPC does not protect cash, even if held in a securities account, if it is there for another purpose like conducting a forex trade. However, if cash is held in other currencies to purchase securities, then it is protected. For example, if you deposit Euros for the purpose of buying shares on the FTSE, the Euros will be protected. However, if you are holding Euros as a currency trade, the Euros will not be protected.

If IB were to fail, a trustee would make a fact inquiry as to whether the cash in your account was deposited there for the purpose of purchasing securities.

What I find surprising about this is that I had been under the impression they had a sweep into an FDIC insured account like TD Ameritrade and from this it is clear they have no such thing. You can see that in the event of a company crash you have no protection. We all have learned the protections supposedly offered by the commodities exchange act is a farse and that is essentially what is stated above being what you get with them.

If you read the complaint you can see that there was a period of time that had they gone down a heck of a lot of money would have been missing and you would be like me waiting for years hoping to get some of it back. Fortunately, nothing bad happened during that period. It seems to me when I read the complaint they were playing a dangerous game with currencies and then claiming oops we did not mean it etc..

It is up to everyone to make their own call but I think no matter who you are or where your money is, if you are going to trade futures at this point you had better have your money divided up into multiple brokerage accounts. If and or when we enter into another market down turn you can bet your sweet bippy a few FCM's are going to go down and take clients with them. Keep in mind these shenanigans which now include IB, Cantor Fitzgerald, and also a large Japanese firm whose name escapes me, are going on during a time of one of the biggest stock market rallies of all time. What do you think will happen if we get a 30 or 40% decline? POOF is what will happen.

We hear that one of the problems that "causes" FCM's to screw around with client money is that the margins are so small it is hard to make a profit and stay in business. I guess we are all supposed to accept that and say well then steal our money to survive. If you look at what the CFTC is doing, it will have no effect at all on preventing more of this crap, ZERO. They also don't want insurance. Where that leaves us is... "When you have eliminated all the possibilities what is left no matter how improbable it might seem, is the explanation." In this case what we are left with is they don't care if more of these things happen. If they did the regulations would be such that they have no access to the money directly.

I can't tell anyone who might have an account there what they should or should not do, but I do think the best way to proceed is to split your money up no matter where your money is and that includes banks to based on what we are seeing happen as well as brokerage firms. That is just being smart it is not being negative or paranoid. I wish I had been more paranoid or negative when it would have mattered and had my money split up like I am recommending here.

Good Trading

IF THIS SURPRISES YOU WAKE UP

http://www.cftc.gov/PressRoom/PressReleases/pr6560-13

I got off this subject because I was tired of talking about it and felt I had driven the point home. It is amazing to me when I talk to people the lack of concern over another PFG. I don't consider MF to be the same since most segregated holders are going to wind up with all of their money back. There is no chance of that happening with PFG, zero.

Readers know my thoughts on this firm. They screwed me so many times on fills then I got Peggy in the Ukraine from the Mastercard commercials every time I called customer service, so I vowed never to do business with them again. When I saw this article about them it was no surprise to me. It was not that I expected it to be them, I did not. What I am 100% sure of is that FCM's mishandle segregated money every single day still. The government actions have done nothing at all to prevent any more disasters. What they have done is make it so the thefts will be discovered sooner. The outcomes won't change at all. The money will still be gone and what is left will be paid to attorney's and or tied up in court for years. What will happen is that you will know you have been hosed much faster whatever comfort that provides.

The moral of the story is split up your money. FCM's are still screwing around and more PFG's are coming. You don't want to be in the position I was where the majority of your trading capital was in one place. If it poofs you poof. There are poofs coming during the next turn down we have. I say this with 100% certainty. Do your homework and split up your money. I don't know it this firm has any issues or not but obviously with at one point $400M not being accounted for, there are some problems going on. I know in my world if the word segregated comes up in any way with an FCM in any negative way I am gone the next day period. At the very least I would take out half my money immediately and ask questions later.

I am not seeing any setups I am in love with here. Gold I think is looking like it might be worth a shot on the short side here and ironically so is the DX. This is odd because all the experts tells us they move opposite which of course is not always true just like most of what they tell us. Fact checkers are not among their peer groups. The DX is also moving separately from it's recent relationship with the stock market. I think the reason for that is that the FED is now just focused almost exclusively on the ES.

I noticed in the court docket today that a ton of people are selling their claims in the PFG case to bad debt buyers. This is probably not a bad idea due to the continued delays and the prospect for another distribution this year being very bleak. Whether it is worth it to wait for a whole additional year for only another 10% is a good question. It probably isn't. I have already written off the loss on my taxes so I am going on the assumption that nothing more is coming. It does however seem likely that we will get to 50% at some point in the next couple of years.

My parting thought is I wish someone would step on that little shrimp over in Korea who is running his mouth. Fonzie said it best in Happy Days, at some point you have to hit somebody. Until you do you got no reputation.

I have to get cracking on my web site so cutting it short tonight. Hopefully some things are going to set up the way I like them soon. The bond system has also only made 1 trade this month so far, a win, so things have been quiet this last week. Sorry no charts tonight I think I have chartitis!

Good Trading

STOCK SELL SIGNAL STILL LURKING

Here are the ES and RUSSELL charts with the ADX on them. I hope readers of the newsletter have spotted the pattern that is here and also have spotted the difference between the two and which one is the better setup. If you are a client and are not sure please email me. If you are not sorry, it is not fair to them to tell everyone just dropping in about this. For those who are not I would suggest studying the ADX it can be a very valuable tool. The purpose of the Trading School section is to show people how we trade and the tools we use to do it, that is why we have covered this in a few different editions.

You can also see here that the accumulation indicator is also showing a different situation in each of these markets. I want to stress these are setups not entry patterns at this point. As I pointed out in Natural Gas the other day. That was a sell setup not a sell entry. For those who thought I was a moron when the market took off that next day I said right in the article it was not a rush in guns a blazin sell, it was a setup. It still is and is now looking like something could come along there in a few days. This is how setups are they are situations where my attention is now drawn to these markets looking for shorter term entry patterns to develop.

How you enter the trades is another matter. There was a comment made in one of the posts about specific price levels for the Russell on a bounce. I have no idea about those, I do not use Fibonacci and have made a video about why that will be in the new web site. I focus more on short term pattern setups, then price confirmations of them via price movement in the direction I am looking to drag me into trades. I don't represent that it is the perfect way to trade, I represent it is how I do it. There are pluses and minuses to every approach.

I am working on something interesting that I think lends itself well to a webinar so hopefully I can put that together so we can start taking things to another level. My website is about a day away from being turned over to me. I keep botching some of the changes in the Word Press edit mode and have to wait over night for the hoster to reset things for me, UGHH. There are two modes to be in for editing and if they have created content it requires one mode and if I have created it there is another mode. Whenever you use the wrong mode the whole thing gets messed up. Believe me running a trading business and trading are two completely different animals to say the least.

Let's be watching the Bernanke's here something is brewing with them I think in the next few days.

On a side note, I went over to a buddies place to watch the NCAA mens final, I am from Michigan originally so I was pulling for them. My buddy is a big hoops guy and my best friend is an NBA General Manager, so I follow hoops closely. It was a great game too bad Michigan lost but the best team won I think. The coach out coached Michigan's coach. Michigan had them on the ropes with the up tempo full court game and Pitino was able to slow it down which favored his team. I bring this up because one thing I always do when I am trading lousy is slow things down. I am not a fast break up tempo trader. I like to wait patiently for certain things. At times I push things in the Swing trades trying to catch a fast break and that is why our win percentage is lower in that than bonds. I am not going to do that any more. Sometimes I worry that there are not enough trades for people and they may not be happy about that. However, the bottom line is making money not the number of trades. Look for fewer trades that we stay in longer in that service.

What I hope people do with the writings here is use them to study on their own some of the things I discuss. You may well be able to use them better than I do.

Good Trading

STOCKS UNDER OR OVER VALUED?

Zero Hedge had this yesterday and I think it is interesting. You can see it came from one of the dark over lords Morgan Stanley. There is a lot of talk now about how stocks are very cheap by historical standards and as a result are going to ramp up in price from here. I am a believer in timing stock market swings at extremes with earnings ratios in general. In general is the operative phrase. What I want to do is buy when prices are low and the ratios show under valued levels, and sell or go flat at high points, where stocks are over valued. I have not found any evidence in my research over the years to support buying at extended price levels on the high side regardless of whether or not earnings measures may or may not be valued correctly.  

What I like about this chart is that it focuses on Forward P/E's. I have found that measure to be one of the two best of all the measures for doing this type of thing. For every egg head who comes up with something like this there is another showing another stat with the reverse, supporting a buy here. I think at some point you have to step back and just think using basic logic. By any measure the stock market is extremely extended during this rally, we are at all time highs basically. Is it really logical to believe that stocks are under valued at such a price juncture? Not in my mind.

I went through some statistics in my Newsletter this month about this time of year with the stock market that also do not support a new long position being put on here, and why. If we pair this with the horrible NFP report with the absurd doctoring of the head line number with the participation skit, it has never been more clear that there is a huge divergence building here. We then have the story break about the trader who was supposedly controlling 20% of the ES on any given day. There seems to be a preponderance of events now taking place telling us to look out.

I always focus on price and from that stand point we do not have sell signals yet from a broad perspective. We once again saw the PPT bring the market back from the brink yesterday, and this has become business as usual. It is a shame that something like this is so widely accepted by the public. I never would have thought 10 years ago that the public would be so accepting of this level of government intervention into our lives. From that perspective it is different this time. The proposed changes by BO with retirement accounts are the next step in the re-distribution plan. It is becoming as clear as day that his policies are wrecking this country and I am now getting a little worried that the fall from all of this is going to be sooner than later. When I see his proposed budget adds $7 Trillion to the debt, I am beginning to think now he is doing this intentionally to bring us to our knees. I thought before he was just so set in his ways and was stubborn, but there is no way with the advisors he must have including Soros, that he does not know his plan is going to bring us down. As a result the only conclusion I can come to now is that it is deliberate.

What does all of that editorial stuff have to do with trading? We cannot just go run and hide or blindly short the market because we think politics are leading us astray. The last few years have shown what a mistake that can be. However, it does tell us from a bigger picture perspective, that we may have a monster short trade to be had out there on the horizon. Catching it correctly is never going to be easy because of what the FED is doing with yesterday being a great example. We had the real reaction happen pre-open, then the governments reaction once the pit session hours kicked in. If you are inclined to try and catch this short I think you have to be willing to probe a few times and get kicked around a little. This is not easy to do from an emotional stand point. I am going to be looking for a short entry on a bounce from here now.

I wanted to show a chart of a trade we are currently in with the Swing signals to illustrate how we are trying to ride trades for a big longer. We got long on March 25th in this trade and have been trailing a stop up since that time. I have one possible short term target on the chart that I judged was too close and we should try for more than that amount. I do use discretion in these trades. In this case that turned out to be a good call since we zoomed through that level. You can see we traded in sync with the highlight bars showing green for a buy where we entered. I would love to say those highlight bars are the holy grail but they are not, not even close. They just give me a general idea of where the trend and momentum line up and the direction the large moves should go. In choppy markets they can go back and forth but tend to do so less than some of the other things I have used over the years.

We are going to be taking profits here shortly since we have had some range expansions especially yesterday. The PPT took a little back from us when they reversed the stock market late.

This coming week should be interesting, hopefully we get a bounce to sell. I hope everyone enjoyed the Newsletter I think it is imperative to get the stock market right and so far I have been dead on with it. Timing the long exit and or short is going to be key going forward.

Have a great weekend

NATURAL GAS - ARE YOU NEWSLETTER PEOPLE GETTING THE HANG OF IT?

One of the ADX setups is here for those who are studying the Trading School section of the Newsletter. Once again this is a setup, not a situation where you just run in guns a blazin! We also have the COT picture supporting a potential decline and we also have something interesting going on with Open Interest. If you look at that you see a huge increase just by itself is bearish. If you add to that the significant decline in the Commercial long position it tells us this big Open Interest increase is everyone but the guys who matter.

It is time to put this on the watch list for a sell. I do not see any reason to sell yet.

Tomorrow we get the comedy and magic club routine otherwise known as the NFP report. After the weekly claims and the ADP report before it one could reasonably conclude the report might not be very good. Of course we know that means nothing any more. There is a big recovery we are told and millions of jobs are being created allegedly. Things are so good I just can't stand myself how about you?

I don't try and game this report, never have. I won't be watching when it is released unless for some reason I happen to wake up with another zany idea to go check out that can't wait. I still don't have a good feeling about things but trying to guess when the FED's scheme might come to an end is too tough for me. I do think the story about the rogue ES trader is a must follow story. We can only hope it leads to some truths being revealed but who am I kidding?

I apologize about the difficulty with the Newsletter somehow that link got out to a lot of the wrong people. Based on how many people emailed me asking for a copy and comparing that to our list of clients and how many people viewed/downloaded it, it got it somehow to a lot of people that were not authorized. I am just asking one more time please not to do things like this. I worked very hard on this one so I hope everyone enjoyed it. These are interesting times and we need to stay on top of things right now. The chance for a shock is out there.

Have a great weekend

PPT SERVING SOMEONE UP?

I have to give it up to Zero Hedge. I have no idea how he comes upon all this information throughout each and every day. I found this article quite interesting. It seems we now have a second "rogue trader." If you read through this article there are all sorts of things that might come to mind. There is one thing in particular that jumped out at me, 20%.

http://www.zerohedge.com/news/2013-04-03/how-28-year-old-ex-goldman-trader-who-accounted-20-e-mini-volume-blew

The nefarious relationship that exists between banks and the FED has been showing it's true colors over and over. One of my favorites is what has been called by some setbacks. Translated this is segregated fund money that the bank holding it somehow comes up with some BS reason as to why it is all of the sudden theirs to keep. Judges never wanting to be one upped by the next corrupt person kindly oblige them and let them steal the money. See recent fraud cases for more on this, I am not a lawyer but do know JPM is forecast to keep some of the PFG money through this process.

We see the banks constantly getting inexplicable favorable treatment in court cases. It is my allegation that the reason for this is there are some back door relationships going on that "we are not privy" to. It has long been alleged that the PPT does it's dirty work through Citi, GS and JPM. Is it a coincidence that the rogue traders caught "manipulating" the ES worked for those firms? Here is the bigger question, why is the CFTC allowing GS to exceed Large Trader position limits? They are not commercials, they should not be provided unlimited position sizes. Since positions have to be reported at the end of each day, why did more than 1 day go by before forced liquidation of some of a position like this took place?

It has been alleged by me that the big run in Crude Oil was caused by the CFTC allowing commercial status of large commodity funds where they could push price to ridiculous levels. If you look at the COT report during the huge Crude rally in 2007-2008 the commercials had a monster long position right at the top! That would not likely ever happen with true commercials who are hedgers. It was pointed out by me and many others more prominent, that something was amiss with that situation. Now we fast forward again to this bizarre situation.

There are all sorts of possibilities and I have no proof to make a case on any of them. I do find it curious that he apparently was only a long side trader. Anyone who trades knows you can make money faster in crushing the market with a short position. If his sole goal was money why didn't he play both sides and bully in both directions? Might there have been another reason? Might there be a back door deal already struck here? I would love to say we should have an investigation but we see where those all go. At this point it would only be truly investigated if all guilty parties were Republicans. If there was one democrat anywhere that would be implicated Holder won't do anything as we know. Let's hope this guy is a Republican, maybe he will spill the beans if there are any to be spilled. I will just leave this commentary with the following thought, I think there is a heck of a lot more to this story than we are ever going to find out.

The following chart speaks for itself.

It certainly appears the free fall is beginning. I am sure Fib guys have a Christopher Columbus type of navigation chart drawn showing the magic numbers this will stop at. If it breaks through the 1538 level and closes below it, I see nothing anywhere on this chart that is even a target. This means the target if you are short is $950 or lower since the chart only goes that low and there is nothing even there to zero in on. I am going to be sad not happy to see people get cleaned out on this one if it progresses like I have said all along it would, really sad. It is not over quite yet 1538 at press time is still holding.

I am pissed at myself for not being short the Russell, but catching this was not easy. I did say that was where to play so hopefully some of you caught this. We have caught it being long interest rate contracts but we should have had this also, bad judgement call by me.

Good Trading

SILVER CRASH

I have been saying for the last two years that the metals would retrace more than 50% and I thought quite a bit more than that. It is funny how we are not hearing virtually anything about the crash in the metals. The line on the chart is where the 50% decline point lies, we are getting pretty close. It is another example of the media being so invested in pushing a story. A 5% gain is an explosive up move but a 50% decline is not worth talking about apparently. How would you like to be "that guy" who bought at the highs, paid the standard 20% markup on top of the spot price? He is already upside down more than 50%, close to 70%.

70%

That is not a typo. This is where everyone said to go for safe haven, a close to 70% loss is a safe haven? It is a good thing it has never gone to zero like the ads say. I don't think the pet rock ever went to zero either. This is not an I told you so article although it may sound like it. The point is that commodities mean revert, ALWAYS. Just because Sean Hannity, Oliver North, a myriad of actors and the Gold Bugs have told you these markets will rise forever, it does not absolve you from doing your own home work. If you bought at 5k I hate to say it but you got what you deserve, it was like buying a condo in Florida to day trade it back in 2005, no different at all. Once we get down to the 2002 levels or close to them in the metals, that will be the opposite, a great buying spot for a reversion back up. At that point everyone will be overly negative. That is commodities and I don't understand how people constantly get hoodwinked on these stories, they are all the same. I am not celebrating I could still be wrong about the total reversion but I am not wrong about it historically having always happened. If we don't wind up all the way back down it will be a first.

I don't know if we will just accelerate down or meander our way back down there over a longer period of time and I don't care. I never signed off on this ruse to begin with. At the moment the bulls do have a line in the sand that they could buy against hoping their story about it being different this time turns out to be true. For all I know they are right and I am wrong, but the 50% or close now retracement from the highs already makes my point. The Bugs said this could never happen and they said the same thing about real estate. I think the total lack of coverage of this 50% drop speaks for itself.

I wish I had caught this last move down but I did not. This market chopped sideways forever it seemed before breaking down. I did say yesterday that although I was looking for a buy in Gold, I thought it was likely to follow Silver which was breaking down. The net of it is the setup for this drop did not meet my rules so I missed it. I know of no technique that catches all the moves I wish I did. My comments on this market have mostly been targeted at those who are too heavily weighted in their portfolios in the metals because of the media push to sell these things to you as a safe haven option.

I am sooooo tempted to try and short the Bernanke's here but it has just been suicide to try and short this thing over the last 6 months. The Russell is the one to short if you want to take a shot at it. We have 18 POMO days this month so it is not going to be easy to get a good short going but never say never.

Good Trading

REPORT CARD TIME

BONDS - $3000

SWING TRADES - $476

The final tally is in and this is where we wound up last month. If I display it like this during most months where we make money I have to give equal billing when we don't. The highlights and low lights were as follows.

The Bond System had it's worst month since we went public with it but we did recover from a larger mid month dip. I went through in another post the re-insertion of a filter which has worked like a charm since I did it letting 3 trades through that all won including today's buy, and it screened 3 bad ones. That is pretty darn good in my book. This is how systems work and it is also how any trading approach works, there are losing trades. I have told people from the very get go not to get too carried away with themselves when we had that incredible winning streak last year. I know there is also going to be periods like this. We risk $1600 per trade so if you look at this, the net for the month was not even the equivalent of two full losing trades. That is little consolation if you happened to just start trading it right when the losing streak started. There were a couple of people who signed up at about that time. There were also a couple who started trading the Robbins auto trade right after the losing streak and have caught the three straight wins we have had as their first 3 trades. In the end all of this evens out over time.

You have to stay in these types of things for a while to get the full benefit. Most people are not patient enough to do this so we do have some people coming and going. I will say for the most part though the group has been stable. If you started with it from the beginning you have one heck of a net profit on your hands even after this month, so I suppose it is easier to deal with a losing month, with that much profit already in the bank. I take the trades to as I think most everyone knows.

We only had one trade in the Notes version of the system that made a profit of $63 so not worth even reporting. We will monitor that as we go along. If you are a system trader whether it be my system here or somebody else's, if you believe it will remain profitable you should start trading it when it has a losing streak, not when it is on a new equity high. It is human nature to wait for it to be "safe" and the statistics work against you if you do that. I started trading it more heavily at the trough and it has paid off for me.

The Swing Trades worked out ok in the end. It is never ok to have a losing month, but I do have them and when they are that small it is almost a scratch in my book. We had a very nice Crude trade at the end that helped us a great deal. The changes I described I have made to how these trades will be done which subs are already probably noticing in the orders and how they are being placed, will lead us to catching some larger trades. We are also going to be staying in trades longer. We are starting to move enough size where we can't get too cute with orders since we have been picked off a few times and in reality trying to catch little wiggles is no way to go about this anyway. I did have one bonehead trade trying to short the ES which killed us, what a dummy.

All in all last month was not good by any stretch of the imagination, but we did have a good last two week comeback from where we were. For those Newsletter readers, I sent out a PDF sharing link to get this month's edition because we could not shrink it enough to get it under the Aweber file size limit. I am ready to kick them to the curb and will do so at some point. It will be available through our web site going forward and we won't have to deal with that kind of stuff.

POT POURRI

I have to admit to something that I normally would not but this forum is somewhat of an inner monologue for me so here goes. I keep getting a nagging feeling that comes back to me over and over and over. At times it stays away for a while but ultimately it comes back. That feeling is that all of this nonsense that is going on is going to end very badly. The Cyprus situation has paved the way the same way the tax increases at the beginning of the year did for more of the same. One of my favorite readers emailed me something today that was somewhat alarming in that it was legislation elsewhere in the world thousands of miles from Cyrus, where it is being written into law that banks can confiscate deposits in the event of an unexpected insolvency. This is not a third world country, in fact it is one that is considered to be among the most stable of any country financially. This country is even being praised for having done the right things and as a result is not in as precarious a position as places like the US. Then I read this stuff about the Bitcoin! If that is not a scam they should remove that word from the dictionary. A supposed asset that nobody knows how the value is determined and some small company is making a fortune selling it! Talk about a dog named POOF, that is what will happen to that money..... POOOOF!!! They should call it the POOFCOIN.

I just see this overall sign of people knowing the governments are BS'ing them and scrambling to try and find a way to protect themselves. What it all tells me is what I have been saying for the last few years. If you took every single thing in the world and left it unchanged tomorrow and just changed on thing, DOW = 5600 instead of DOW = 14500, you would have a scene around the world like the scene in Caddyshack where the caddies take over the pool. This is exactly why the FED is so focused on keeping the stock market rallying, they know what they are doing in terms of manipulating the collective psyche of the public. I just have a nagging feeling at some point when this does roll over, it is going to be really ugly. I do not believe that roll over is necessarily near, but when it does happen it is going to be really interesting. If the Gold market does follow stocks down instead of rallying, it is going to be even worse because a lot of people have been sold that idea. Maybe it will be a safe haven I don't know, there is no consistent historical bias either way on that contrary to what they say so it is a 50/50 proposition.

I have been looking to buy Gold but have not found a way in yet and Silver is on the verge of collapsing again, so it makes me wonder if Gold won't follow it off a cliff. That mid 1500's price is still a line in the sand for Gold. You Gold bugs better hope that does not get taken out, it will be another POOF if it does. I also find the Copper weakness a bit surprising when comparing it to the ES.

THE DOLLAR

Since we are light a few dollars after last month lets look at the Dollar to see what is brewing there.

I think good ole Uncle Joe might say "this is a big f___ing deal." The commercials have taken on their largest short position in years right now. We are kind of in no man's land in terms of a trend since we have essentially gone sideways for 5 years.This is what irks me about these morons who talk about how the dollar is getting killed. Is is really? The dollar index is at the same price as it was 5 years ago. This is when they break out all their cute little new age formulas that they have back figured to support their argument. "Well adjusted for the price of inflation, blah blah blah." Have any of you gone to McDonald's and told them you will give them the inflated adjusted dollars for your food. As my dad says that stuff is just horseshit. BTW he is thrilled because he lives in Michigan and they made the final four in Hoops in spite of the referees in his mind trying to make sure they lost every game. He is a pill, he would have been the best color man for Monday Night Football ever had they discovered him.

I will never forget a guy I met several years ago that was always factoring in inflation adjusted dollars to everything he did. He was European and very bright and wanted to be a trader. I had lunch with him a couple of times and was amazed at how he was so infatuated with inflation adjusting everything. All the inflation numbers are doctored, how could you possibly ever do that accurately? Before we know it the CPI will be reported as not only ex autos, ex food, it will be ex inflation. "The CPI today ex inflation was ..." He could not make a trade in the currencies because he was tied up in his underwear with all these inflation calculations. Good grief! He could not understand how I could trade my Bond System when it had no calculations for inflation. That was 2007 when I came in third in the Robbins contest trading the Bond System alone and nothing else.

What we don't know at this point with the DX is whether or not this is just the standard hedge the rally deal with the commercials. Often they go from a heavy long to a short like this when trends change and it is not an indication to get short. You can see an example of that in Feb of 2010 on this chart. Had you shorted that right when they got heavily short you would have gone on quite a ride. Had we been rallying steadily and reached an obvious resistance point and this shift had occurred it would make me more bearish than this does. I am unsure on this one right here. The seasonal does tell us down and my shorter term momentum indicators have rolled over, so I am leaning short here but have not done anything just yet.

Good Trading

STOCK MARKET CRASH/HOGS GONE WILD!!!

APRIL FOOLS!!!!!!!!!!!!!!!!!

I did it again, whored myself out for blog traffic!!!!! I know if I just put a solid positive headline nobody will come here, so sad but true. I thought for April Fools I would try the ole' bait and switch move. If you are mad you got duped hang tight, I am going to cover the ES today, just not first.

Regular readers can see the familiar pattern I often show here. The commercials have become heavy buyers of this market after a big down move. This in and of itself does not necessarily mean we should be buyers here. I have a video that is going to be in the new web site that covers this type of thing. However, in this case there are some things I use that are not shown that lead me to conclude this is a buy setup. Newsletter readers should have picked this out it is in last months Trading School section that has been so popular in terms of the feedback I have gotten.

 I also warned not to go Hog wild no pun intended with that setup just stand alone. Here we have a basing pattern happening that accompanies it so this has a bit more going for it. My wish list has this consolidating a little bit more first before I will try to buy it but who knows that may or may not happen. I try to remain patient and not force things. I don't always accomplish that but I try to anyway. This one is on my radar.

There is a noteworthy "expert" calling for a major sell signal in the stock indexes right now and I am going to cover what I think is the basis for that reason. I can't stomach reading his details because he specializes in revisionist history in his claims on his signals. Nonetheless, he has had some good sell signals over the years he just happened to have blown the whole rally off the 2009 lows telling subs including me prices were going to 5500. The revisionist chart he markets shows him with a buy signal at the lows which is a complete lie, he had no such buy signal in his writings at that time. In any event, here is a chart that is likely to have some commonality with his call.

The net commercial short position has really gotten large here with the ES. You can see it has been clearly declining sharply during this whole rally since October of 2011 so knowing that has been of no value. I talk about this all the time that using this is an art not a science. We have now gotten to a pretty extreme level and it has increased sharply lately. The real trick with this market in particular is that we don't know how the unprecedented manipulation by the FED of this index specifically is being categorized in the report. I think it is showing up in the Large Speculator category because you can see there was a huge net long at the major low back in 2009 and Large Speculators do not trade that way, they scale in and scale out. As a result it is highly unlikely the normal Large Specs would have had major longs down there. All else being equal they would have had major shorts, just study some charts.

What I think is likely is that the FED is not actually making the trades, they are instigating them through intermediaries who they are giving a pass to in the way of no position limits. We know they tell anyone to piss off when they are asked for their books, so we have no way of checking any of these things. As a result what we are most likely seeing is the Large Spec big long being the FED and the normal hedger types being the commercials. The Large Specs are able to fight off the commercials because they are being allowed to have unlimited size to keep the game going.

This makes this a tricky call as to how much credence to give this situation. My feeling at this point is that if we get a price pattern that is a sell it is worth a shot because of all of this. However, I don't consider it to be as high a probability trade as it would have been a few years ago before this manipulation got really out of the barn on us.

This is all conjecture on my part based on experience of reading this report. I am making some assumptions that could be incorrect. However, I think the world has accepted as common knowledge that the FED is manipulating the stock market and nobody cares because the average Joe is benefiting. Remember what we have learned through Cyprus, nobody cares about bad things until they themselves are hurt by them. As long as it is someone else who is getting screwed it is ok and it is for the greater good.

Here is another example of misguided logic with good intent.

Here is our newest free agent signee Gus "The Bus." The name comes from his sheer size which does not really show in this picture, he is 180 lbs. If you keep in mind that the opening he is guarding is a double door dining room you can get an idea of how big he is. The opening he is covering is about 8 feet wide and he basically covers it all the way across. He is a retired champion show dog that my wife drove 26 hours in total to get from the Breeder who was retiring him. Since he was a show dog he is used to an environment where the female that is being bred is kept separate in a caged off type of environment. In our house that he arrived at we had one of our dogs Leo ( a dude ) is in this pen area because he just had knee surgery and has to be confined while he recovers. Gus the bus assumes Leo is a female so he is protecting him from the rest of the crew like he is his girl friend. What he doesn't realize is his girl friend is a 170 lb dude! His heart is in the right place but the plan is actually flawed. This reminds me of some things economically that are going on right now.

I hope you are enjoying your Easter for those US readers.