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Thursday, March 31, 2011

What can I do to contribute?

I am working on finding a better way to make a contribution to traders in the markets. In an effort to do so, I am working on presenting a trading signal service which will enable subscribers to have the system automatically trade your accounts or manually handle executions yourself. This will be a weekly subscription only payable for profitable weeks.

The ultimate goal that has been determined is to make a contribution to interested traders where I share the values and beliefs that drive my behavior and decision making.

In an uncertain world, the only certainty I am lead to believe is that each of you can have more than you ever imagined possible.

Friday, March 18, 2011

We Are Off To The Races: BOJ Intervenes In FX Market, Sends Nikkei Surging As G7 Agree On Plaza Accord V2

And we are off. The JPYUSD is up nearly 200 pips as the Bank of Japan buys billions in dollars, using freshly printed Yen, following an agreement with the G7 which will likely see a new plaza accord to keep the Yen low despite ongoing repatriation. This follows earlier news that the BOJ will underwrite a ¥10 trillion in earthquake recovery bonds as Japan is now lurching from one monetization step to another. Keep an eye out for intervention aftershocks as the BOJ now can not allow the USDJPY to drop below 80 or it will be all over. This is what global reflation gone nuts looks like. On the other hand, if the BOJ fails to keep the USDJPY above 80 following this action, and the inflows of yen are far greater than anyone expected, most certainly the G7, then we have big problems.




And from Reuters:

The Group of Seven finance chiefs said authorities from the United States, Britain, Canada and the European Central Bank will join with Japan in joint foreign exchange intervention from Friday, at the request of the Japanese authorities.

The G7 finance leaders expressed their "readiness to provide any needed cooperation and our confidence in the resilience of the Japanese economy and financial sector", they said in a statement issued after a conference call.

The G7 finance chiefs held a teleconference around 7 a.m. Japan time on Friday (10:00 p.m. GMT on Thursday) to discuss the financial and economic impact of last week's massive earthquake and unfolding nuclear crisis.

Next up: Armageddon 2: the Sequel, in which the Chairsatan, Trichet, Shirikawa, King, and Hildebrand dig a deep hole in Haley's commet, in order to save the earth, only something goes horribly wrong and everyone blows up in a nuclear fireball. The end.

Monday, March 14, 2011

"Operation LeakS" Releases Initial BofA Emails Indicating Premeditated Intent To Deceive Government And Auditors

From Operation LeakS' site, http://bankofamericasuck.com, here is the initial release of what appears to be a whistleblower's (former employee) disclosure that Brian Moynihan's firm is lying to the Federal government. The punchline is that this appears to be a concerted effort from the ground up to hide foreclosure data from auditors and the Fed in order to obtain select preferential treatment in a variety of housing related axes, in many instances to accelerate foreclosures. As the whistleblower summarizes: "Balboa Insurance/Countrywide knowingly hiding foreclosure information from federal auditors during the federal takeovers of IndyMac Federal (a subsidiary of OneWest) and Aurora Loan Services (a subsidiary of Lehman Bros Holdings), falsifying loan documentation in order to proceed with foreclosures by fixing letter cycles in the system, reporting incorrect volumes to all of their lenders and to the federal auditors to avoid fines for falling behind on Loan Modifications, purposefully and knowingly adjusting premiums for REO insurance for their corporate clients while denying forebearances for individual borrowers, etc, etc, etc. In addition, if anyone can get me a copy of the image of the hard drive that Jullian Assange reportedly has from the BofA executive, it will not take a dozen financial analysis to decipher it like I've read in the news. I could find all the dirt on that hard drive within a week." We'll see if Assange steps up. In the meantime we expect Brian Moynihan, or rather Ken Lewis who was in control back then, to pull a Dick Fuld and tell a Congressional hearing he had no idea any of this was happening, leading to the termination of some mid-level employee, notably the person who invalidated the following concerns: "I'm just a little concerned about the impact this has on the department and company. Why are we removing all record of this error?... There is always going to be the paper trail when one of these sent documents come back, this to me, seems to be a huge red flag for the auditors...This just doesn't seem right to me." That's ok - it will most certainly seem right to everyone in "law enforcement."

The reason why the whistleblower is stepping up:

His motivation:

read more here

get full documents here




Tuesday, March 1, 2011

Spdr S&P 500 (SPY) March 1, 2011

VIDEO overview comparing markets to USD, GOLD, CHINA, and OZ over several months with targets.

Wednesday, February 23, 2011

FDX and the box of pain

Video outlining this trading opportunity, this name cut through support like a blow torch through a rope.

video

GOLD and MONEY, thanks to Fractal Trading

Many thanks to fractal trading for providing insight into the technicals, and trading patterns in the world of GOLD, and Currency. Blessed to be able to get information from great traders!

On OIL and MONEY World Economic News Feb 23 2011

In an effort to find out some more about oil, I had to look no further then to the bottom of my own blog, where I had ignorantly put the feed for "overthepeak dot com". A rather articulate and knowledgeable man this producer is.

So he was kind enough to give me some insight into the world of oil, here it is.


World Economic News (Wed 23rd. Feb '11) from OverThePeak.com on Vimeo.

Tuesday, February 22, 2011

The Great American Mortgage Ponzi scheme.

For the last 30 years, the economic growth has gone to the top one-hundredth of one percent, who now make an average of 27 million per household, the average income for the bottom 90% of us? $31,244.

The 80/20 rule, I conclude, resolves that the path of least resistance transfers the most amount of resources into the management of relatively few.

What I am about to write, they will not like.

Until now, the possibility of more people being able to have more resources seemed impossible. Yet, there is the possibility the world's resources at large could be transferred to more of the 90% of us.

My observations brought me down a road....

...where it was citizens throughout the nation and perhaps even the globe, which are being unknowingly exploited by plutocrats at the expense of humankind's freedom and domestic currency inflation.

Exploitations that I find go beyond the normal course of business. Taking candy from a baby is unacceptable.

video


The Ponzi Scheme

Building an entire industry around this matter in the form of multilevel marketing schemes where existing groups require the financial support of the larger group after them, ultimately a Ponzi scheme,
  • weakens our markets,
  • builds unrealistic ideals, and
  • ultimately ruins entire civilizations.

Unless we as a society want to find ourselves slaves, we cannot allow the bloodshed of our forefathers to be slowly formed into a monarchy.
Capitalize from transactional activity

The Great American Mortgage Ponzi Scheme

IBM

Early tech market price leader has advanced significantly here in the short run. A video here evaluates the past several months of market activity with some in depth analysis relative the volume from the last 10 days. The video provides ideas to consider into your trading tactics and strategies regarding this name.

Watch Video

If this information was of value, please comment, and feel free to share the video.

Make it a great day,

Eli

Monday, February 21, 2011

New Zealand's Currency Tumbles After Christchurch Earthquake

The New Zealand dollar dropped for the first time in five days after an earthquake struck Christchurch, shaking buildings, sending residents into the streets and damaging parts of a cathedral near the city center.

READ MORE HERE

Thursday, February 17, 2011

get dope using the buck.

and Significant sums of Cash...


...my past experience extracted from this world, my experience has also enabled the world to take significant sums of cash away from me.




Skill


is learning and replicating what activity generated desired results, and replicating such activity slightly better each time.


Always continuing to pace oneself.








However, experience is no substitute for skill.



Skill is also using past significant failures as opportunities to consider significant re-construction efforts.


I have seen numerous charts along my journey, and find them an important part of my investment method.


My observation 


This is of some influential indicators effecting the US equity market price action over the last several years.



The following where studied: 
  • the Australian, China Index's, 
  • the Commodity ETF, and 
  • US Dollar ETF. 

This revealed some problematic findings.


My research found that the Australian equities led China, which led the US equity markets. This finding still remains, however, China and Commodities, I have found move closer now. The US Currency absolutely impacts commodities as it should.



What role does the US Currency have upon the effects of equities?


A decrease in the US domestic currency would be expected to eventually compress domestic operating margins and ultimately negatively effect earnings longer term.


In the short term,
operating margins, and earnings are overstated as sales increase due to prices, rather than quantity or productivity.


To the contrary,
an increase in the US domestic currency would be expected to inherently have the opposite effects.



My video discussion provides an observation 


on the historical global market results. I find that any shock to a system is very valuable because it shows how a system performs in extreme circumstance.




Yes this profession is tough, but so is anything worthwhile. 


It is my hope that this presentation provides you with additional considerations, and ultimately creates more overall clarity.



All I ask



If you found this information of value, in return, share this blog with others you believe will benefit and that you share your comments. 






History rhymes,


-Eli

Friday, February 11, 2011

SECTOR CHART ANALYSIS XLY vs. XLV

SECTOR BATTLES 
CONSUMER DISCRETIONARY vs. HEALTH CARE


Chart sector analysis 
between

consumer discretionary
and
health care

The chart depicts a price difference XLY less: (1.21 x XLV)

When the discretionary sector advanced stronger; prices will increase, 

when the health care sector advances in stronger price, one will see a decrease in this chart's values. 


This graph depicts that during the year 2010 investors expected the consumer discretionary sector to improve relative to where it was early that year.


Result:

Discretionary win: 1 loss:0
Health care win: 0 loss: 1

Thursday, February 10, 2011

AKAM

Video presenting Eli's technical analysis on this name and insight to consider within your trading strategy.

Video discussion about trading the reaction's not the predictions.

Friday, January 14, 2011

Women, money, stocks and speculation

When the environment is filled with risk seekers as markets generate gains, fear of losing drops to nil. Now note the following, which is not entirely dependent on





the aforementioned environ: anything, namely, stock issues, with consensus concerning it's attractiveness will not be as hotly pursued. it will be merely declared as just that; attractive, yet not as actively pursued. in fact, disregarded and left alone.  

yet that stock issue with a large divergence in consensus concerning it's attractiveness, will be given more attention, followed, noticed, and actively pursued; hardly left alone.

stock issues like this would be names with highly contested earnings figures, technical patterns, and in any state of uncertainty.

a moth to the flame. it must be in our human nature to seek out risk when investments are doing well in active pursuit to attain more.

  • it is exactly this activity that makes markets unable to be fabricated over any multi-year time frame, and possibly sooner as information technology enables this.

  • it is exactly this activity that generates advances in activity and prices followed by declines in prices with greater activity; 
  • where activity eventually declines, prices stabilize; until once again, 
  • activity begins to increase, prices advance, and 
  • the entire process repeats.

the Elliott wave principles capture this observation of nature very well. of all trading methods, principles, techniques and styles i have studied; many inherently depict these wave principles, either knowingly or not.

nevertheless, a requirement to speculation, no matter, one's methods, must be "reactive". this insures a flexible mental mindset which can avoid getting trapped into thinking market action will resolve as you imagine.

this thinking was prompted by the following study and applied to the arena of speculation. source OKtrends

Wednesday, January 5, 2011

Finance explained in 69 sketches

presenting all you needed to know about finance explained in 69 priceless sketches that not even the Fed's infinite Mastercard debit account can buy.Via Behavior Gap 

Friday, December 31, 2010

2010 Recap: Macro Trends Playing Out as Expected with Some Surprises...

From Mike Krieger of KAM LP

Macro Themes for 2011


Death may come invisible, or in the holy wall of fire
In the breath between the markers, or on some black I-80 mile
From the madness of the government, to the vengeance of the sea
Everything is eclipsed by the shape of destiny

- Conor Oberst/Bright Eyes, No One Would Riot for Less

2010 Recap:  Macro Trends Playing Out as Expected with Some Surprises...
Heading into 2010 I focused on three investment areas that I thought would benefit the most from the insane policies of desperate global Central Banks and governments adhering to the orders of the financial oligarchs that control them.  They were to be long precious metals, agricultural commodities and oil.  Not only was I a believer that most globally traded “hard assets” (as opposed to residential real estate) would do well as global fiat currencies are competitively devalued, but I thought that the three subgroups mentioned above would do particularly well since they are also strategic commodities.  Basically, in a world going through the type of dangerous geopolitical shift we are in at the moment (these happen once in a generation and are called “Fourth Turnings” by Neil Howe and William Strauss) governments and in fact all institutions become subject to upheaval and revolution.  Since governments are made up of human beings (generally narcissistic power hungry ones) we can generally forecast how they will react to such tension.  In their attempt to maintain power and status governments usually do one of two things.  They turn on their own people (or minorities within their own societies) or they turn the anger of the populace on a foreign enemy.  In an environment where the global financial system is based on digital monopoly money created with a keystroke by Banana Ben and company, money itself will become suspect and any large foreign government with even a basic understanding of money matters will buy all the gold they can so that if necessary they have real money to use the basis for a new currency if necessary down the road.  Just as gold is a necessary hedge for individual Americans that can see the destruction of currency values by their own government, it is too a hedge for China, Russia and others against their U.S. dollar reserve assets and indeed the global financial system to which they are a major participant.  Agricultural commodities are just as important since if a nation like China cannot provide food at a reasonable cost to its citizens there will be revolution overnight.  In fact , this is true in any nation.  Oil fits in to the equation as a hedge if the whole thing breaks into global warfare which can occur once a nation loses the financial war happening now.  If you don’t have access to enough oil you will lose any major conflict.  Why do you think we are in the Middle East and are looking for an excuse to attack Iran?  To spread Democracy?  Don’t make me laugh.

There were two things that surprised me this past year.  First, was the effectiveness of propaganda and market manipulation.  Despite, the obvious lack of any real economic recovery other than phony aggregate demand increases due to inflationary policies many people actually think things are getting better.  The Larry Summers’ of the world and other economic magicians like him have one economic policy and that is expectations management, which really means create enough propaganda, push the stock market up, and people will then believe things are getting better and then things will get better in reality.  I believe this policy has been half successful so far.  It has been successful is kicking the can down the road but it has not been and will not be successful in improving the standards of living for the American people and it is becoming more and more widely understood that this “respite” is merely being used by the small oligarch class in Washington D.C. and Wall Street to steal what little is left and push the middle class into serfdom.  When this thing collapses again let’s never lose sight of this and remember who did what during these days of “recovery.”

The second thing that surprised me was the strong performance of consumer discretionary stocks and retail in general.  I think the main thing that caused this particular group to perform so much better than expected in 2010 was the fact that crude remained range-bound for most of it.  It is really only in the past couple of months that crude has broken out of its range.  I think mature retail companies will be amongst the worst performing groups in 2011 and I will explain why in the section below.

2011: Back to the Basics (Again)

Just like the political world has been divided into two fake categories to keep us peasants in a controllable paradigm (Democratic/Republican, Red Team/Blue Team nonsense), it seems as if the investment world is similarly divided into China Bulls or U.S. Bulls.  There is this idea that one nation is doing things so much better than the other and there will be this big winner to emerge.  I hate to break it to everyone but there will be no winner in the intermediate term.  The entire global economy is linked in a gigantic financial ponzi scheme based on a completely worthless reserve asset (the U.S. dollar) and none of the players will be able to extricate themselves from this easily.  This is precisely why China has not allowed the yuan to strengthen materially.  There is one reason and one reason alone for this.  The government is terrified beyond belief of the near-term consequences of this since their only objective in reality is to maintain power.  As a result, it is not just the U.S. that is digging themselves into a disastrous position but it is indeed much of the entire world.

The strategy of the Keynesian economic magicians in control of the levers of finance globally has been to stimulate artificial aggregate demand via a number of policies, the central component of which is buying worthless assets with equally worthless paper.  Why not!  In any event, of course this succeeds in boosting aggregate demand as it has since 2009.  The problem is if the demand represents “malinvestments” based on phony signals what you end up with is pure inflation and no real increase in standards of living.  This is manifesting itself in different ways in different countries like China and the U.S. but it is manifesting itself in one important way in both.  The widening gap between rich and poor.  This is becoming an enormous problem in both countries which is why in Beijing they recently announced a plan to raise the minimum wage next year by 21%, which is the second such increase in the past six months.  How about this quote from the FT on Tuesday:

“In just the last three months we’ve already had to raise entry-level starting wages 60 per cent just to get people to come to a job interview,” said Jade Gray, chief executive of Gung Ho Pizza, a Beijing-based gourmet pizza delivery service. “With rising rents, the much higher cost of ingredients and now wage inflation, many businesses in the services industries are going to find it impossible not to pass on much higher costs to consumers.”

People in the U.S. think there is no inflation because wage growth has been subdued and because they still believe the most manipulated statistic in world history, the “core” CPI.  Here in America, purchasing power has been maintained through transfer payments and extending unemployment insurance.  The most disgusting thing about all of this is that Washington D.C. comes out and pretends to be heroes by doing this.  Oh yeah, continuing to give people the same amount of money for more expensive bread while they rob you blind.  That’s some leadership.

It’s Falling Apart as We Speak
As I read stories recently about China reducing supplies for rare earths, I watched oil and grains skyrocket to new highs I couldn’t help but think to myself: “we are going back to real trade again.”  What I mean is that the prices for all the real “stuff” that at the end of the day makes the world go round are still in the early stages of being revalued to a realistic level.  We want China’s rare earths, they want our grains.  Ok, we can probably make a deal there.  Despite what they may say publicly no one wants dollars and neither should you.  We are still in the middle of a secular bull market in commodities.  In times like these real assets that were grossly undervalued relative to financial assets in the prior secular bull become revalued.  Money also becomes revalued.  We are still working off the bubble in financial assets and the bubble in fiat currencies (especially the dollar) that popped in 2000.  It will be over when the Dow Industrials = the price of gold wherever that may be.  It is still 8:1.  It reached about 1:1 in both the 1930s and the late 1970s.  In terms of gold the S&P500 was down 12% this year.  Pathetic.

All of the phony aggregate demand that has been created has now led to the surging commodity prices we are witnessing at the moment.  This is a very important signal that must not be ignored.  Just as the surge in late 2007-mid 2008 was a huge warning of things to come.  It is telling us the current global economic model of GDP growth at all costs is failing.  It is telling us we are using up all of the world’s resources without any understanding of sustainable development.  The U.S. government is actually encouraging people to buy homes and spend money on trinkets made abroad rather than figure out new sources of energy.  We had our window to show real leadership and make the tough decisions and we failed miserably.  The Kondratieff winter is knocking on our door and will blow in with reckless abandon in 2011/2012.

This is not to say I am bearish on mankind or the world 10-20 years from now.  I am not.  I think once we finish the next 5-10 years which could be very, very difficult we can emerge into a New Renaissance.  We just need to clean out the trash first.  That means the current group of political and economic leaders that have infected the global economy.  My advice remains the same.  You must accept the fact that the current model has failed and will be replaced.  This is why I am so bearish on retail.  The business model for too many of them is based on sourcing cheap goods abroad and selling them here.  Those days are over.  They are over because of wage and other inflation in China and the business model will also be slammed by the cost of shipping things once oil breaches $100/b again, which I expect in early 2011.  Precious metals, agriculture and oil remain my favorite themes.

The War on Terror Sham
I witnessed 9/11 in person and it had a huge impact on me emotionally.  For a while it blinded me to the ways the government was using the war on terror against its own people.  After many years of deep introspection and not jumping to any quick conclusions I unfortunately have come to the conclusion that the war on terror is a sham.  This isn’t to say there aren’t real risks of terrorism.  There are.  There are also real risks to life in general.  It is risky to drive a car.  It is risky to go skiing.  It is risky to live in a big city.  That said, once a society trades freedom for safety it is finished.  Pigs are safe in their pens too as are all livestock being prepared for slaughter.

What I am saying is that I think the “war on terror” is being used to generate fear in the hearts of unsuspecting citizens so that the government can put in a police state.  The top levels of intelligence understand what is to come in the economy and are desperate to put in the police state grid at all costs.  I am not telling anyone what to think on this matter.  I am only asking you TO THINK.  The fate of the nations depend on it.  The following was posted on Zerohedge last week but many on my email list may not have seen it.  Please read and think about the implications of this…

Two very important articles came out last week that you must take the time to read thoroughly.   The first is from the Washington Post and is entitled:  “Monitoring America.”  It is a lengthy article worth your time since it shows in no uncertain terms how the U.S. government has now officially started to turn war on terror technology and military weaponry on AMERICAN CITIZENS domestically.  Stuff that had formerly only been “used in Iraq or Afghanistan” is now being turned on Americans and this newspaper reports it in a matter of fact manner.  It also describes how anyone can just say that they think a fellow citizen is acting suspiciously and then all of a sudden the government’s “fusion centers” start snooping on you and a file remains “open” for five years.  For nothing more than someone saying they thought you were acting suspiciously.   Welcome to East Germany.  This is where tax dollars are going, that and to pay bankster bonuses.  Link is below.

http://projects.washingtonpost.com/top-secret-america/articles/monitoring-america/?hpid=topnews

Second article also encompasses and interview with Attorney General Eric Holder.  In it he clearly explains that enemy number one is the domestic America citizen and that is where the war on terror is now focused.  This is exactly as I predicted earlier this year.  That the “war on terror” would be soon reversed onto average everyday citizens.  So how about this one.  In the interview, Holder talks about Anwar al-Awlaki and talks about how this guy is enemy number 1 now and as dangerous as Bin Laden.   Well, interesting because this guy was invited to DINE AT THE PENTAGON after 9/11.  This is a fact.  It was reported by all the mainstream news sources.  See these links on it….

Anwar al-Awlaki - the radical spiritual leader linked to several 9/11 attackers, the Fort Hood shooting, and the attempted Christmas Day bombing of an airliner - was a guest at the Pentagon in the months after 9/11, a Pentagon official confirmed to CBS News.

Awlaki was invited as "...part of an informal outreach program" in which officials sought contact "...with leading members of the Muslim community," the official said. At that time, Awlaki was widely viewed as a "moderate" imam at a mosque in Northern Virginia.

This is what Holder said today about him:  "He's an extremely dangerous man. He has shown a desire to harm the United States, a desire to strike the homeland of the United States," Holder said. "He is a person who -- as an American citizen -- is familiar with this country and he brings a dimension, because of that American familiarity, that others do not."

CBS reports

http://www.cbsnews.com/stories/2010/10/21/national/main6978200.shtml

MSNBC reports

http://www.msnbc.msn.com/id/39768584/ns/us_news-security/

Fox News Reports

http://www.foxnews.com/us/2010/10/20/al-qaeda-terror-leader-dined-pentagon-months/

So our government is so trustworthy on intelligence that we had the most dangerous terrorist in the world over for dinner at the Pentagon!  So either we are really retarded beyond belief or the whole “WAR ON TERROR” is a total SHAM to place in the police state.  More on the interview with Holder, he is consistently demonizing the internet with statements like.

“"The ability to go into your basement, turn on your computer, find a site that has this kind of hatred spewed ... they have an ability to take somebody who is perhaps just interested, perhaps just on the edge, and take them over to the other side," he said.”

Full article here:  http://abcnews.go.com/Politics/attorney-general-eric-holders-blunt-warning-terror-attacks/story?id=12444727&page=1

This is all good news and bad news.  The good news is that the global plantation owners would not be moving so aggressively unless they were losing the info war.  Clearly they are, which is why they are freaking out.  The next thing that is likely to happen is a false flag attack where the “attacker” ends up being a libertarian with a Ron Paul sticker.  That way they can move from Al Awlaki to the folks they are really afraid of: Good caring and armed American people that still have the capacity to think rationally.

Final Thought
It is snowing outside my window right now.  The weather out here on the Colorado foothills is really interesting.  It is either sunny or it is snowing.  It never seems to just be “gray.”  It’s really distinct from the weather back in New York and it fits my personality well.  Despite all the hardships we face, life is beautiful and good and it is all about embracing great people and experiences.  I wish everyone a happy, safe and prosperous 2011.

Below is a link to a video that uses the full song whose lyrics I quoted at the top.  This is not a political video in that it is not endorsing either major party.  Bush and Obama make me want to vomit with equal vigor.  I have no patience for fake Messiahs.  It’s just a great song.

http://www.youtube.com/watch?v=dqeK_dnPDHQ&feature=related

Signing off on 2010 from Colorado,
Mike

Saturday, December 25, 2010

As the rest of the world celebrates Christmas...

Shanghai Stocks Drop Following Failed 3 Month Bill Auction

blissfully pretending all is good, and the Fed can manipulate markets to infinity without at least one of the numerous violated laws of physics being reasserted in the process, things in China are once again reminding those who care that just as liquidity giveth, so does liquidity taketh away. We pointed out a week ago that the 7 day Repo rate in China recently hit a post-Lehman high, as banks are increasingly concerned that following 3 RRR hikes, the PBOC has no choice but to resort to some tightening measure that actually works. As a result excess liquidity has suddenly become rares than hen's teeth. Today we get a first hand lesson of why this was material: Dow Jones reports that the Chinese MoF has failed to attract sufficient interest in its 3 Month 20 billion CNY auction. The result: SHCOMP is now down 1.2%. Bottom line: as the world is sleeping, China just had a failed bond auction. If news mattered, this would be a very disturbing event. Luckily for Ben, it doesn't. For the time being. It will soon. Then Montier's mean reversion meme may just strike with great deferred vengeance and furious accrued anger.
From Dow Jones:
China shares extend their falls following news the Ministry of Finance fails to attract enough bids to sell all of its planned CNY20 billion 3-month bills in an auction. The Shanghai Composite Index is now down 1.2% at 2819.72 and analysts peg support at 2800. The MOF's unsuccessful bill auction is fresh evidence of tight liquidity conditions in the market, due to China's three RRR hikes since November and rising cash demand near the year-end. "Institutions are inclined to expedite pocketing in some profit," says China Post Securities, adding "the situation will increase the likelihood of a bearish market in the short term." Banks continue to fall on various news reports that China is likely to use new measures, such as special RRR hikes, to rein in credit expansion next year.
Incidentally, the last time China had a failed bond auction was in mid April, just as the stock market hit its then 2010 highs, only to be followed by a drop to the year's lows.
h/t London Dude Trader

Wednesday, December 1, 2010

ELECTRONIC LOCAL [GRAB]

As a speculator and user of methodology, I find it compelling to share an information resource worthwhile. There is much noise in this world....this is Signal.

SEE A 5 MINUTE DVD TRAINING CLIP WITH DVD CONTENT
http://eltradertraining.blogspot.com/p/eltraining-menu.html

Wednesday, November 10, 2010

What does coaching junior high football players to perform a trick play have in common with the markets? More than you think.

In Texas, football is a sacred part of the Texan way of life. Getting ready for High School football is a serious matter for Junior High players.

Does the notion: it's not if you win or lose, but how you play the game that matters apply to operating in the business of the markets? 

my response to the question is: These matters are beyond my control, so I don't care and will act accordingly. Therefore it doesn't matter.

I am a Christian, and I can only imagine the thoughts, opinions rolling through your head now. 

Some may be saying to themselves something like this, "You can't profess being a church going, Christian and say that it is acceptable to operate in these activities. You elitist hypocrite." Making money is no sin, making money more important than God is. I will confidently leave the judging up to God in terms of my activities. 

The good thing is, that if reading this post thus far has got you uptight and wound up, or somewhat agitated, you can thank me, because I have most likely saved you from losing a significant amount of money. You should probably do yourself a favor and stop reading. 

For those of you reading that have even the slightest understanding as to where I am coming or going with this...then I am talking to you.

It is in such subtle ways, through tweaked belief systems, moral dillemnas, hope, fear, greed and ignorance, the astute investor with a plan can extract real money from the markets. Don't even think you still don't have to work for it, because WE all have our plans, systems, and processes, that you have to go against.

One can easily observe the action on the field of football, but the markets are comprised of more which is "unseen" than what the action shows you.

Let's pull an investment learning lesson from this clip courtesy of Business Insider. Roll tape




This is just the kind of play, scheme, and antic the markets play over and over against unknowing traders many times. The traders who consider themselves experienced are regularly duped just the same, if not more, due to their own overconfidence bias




Much of a trader's failure has to do with a lack of process, method or system, which ultimately leads almost any participant down the same path. Where emotion and decision making collide. Everyone has an emotional breaking point, and the market attempts to draw it out in every participant.

Beyond the ethical and moral arguments, my point, is that, yes this is how the tape rolls. As an operator in the market, I will not be able to trade successfully using my personal values, attitudes, and beliefs to dictate my behavior.  Nevertheless, a trader's mindset is extremely important. 49% is emotional stability, 48% mental stamina and thinking, 3% is execution activity. I want to expand on this in the future.    


Participating in the markets affords one the opportunity to learn about themselves to a significant degree. Making and losing money will school you on just who you are and challenge any belief system to it's total core.

If you do not stand for something, you WILL fall for everything. Trick plays like this in the market's will be very hard to operate through without a system, because the market's clues are subtle. You are kidding yourself, if you think you are going to easily extract significant, if any real money out of the market from the obvious or even the news.

Gerald Loeb, a proven market speculator, stated it best when he was quoted, "what everyone knows, is not worth knowing."

Without being grounded and without a system, these "tricks" and more, will take your money every time. What has grounded me is my Christian beliefs, which have carried me to Hell and back, nevertheless, without a proven process applicable to the market you are operating in, your results will be uncertain.

Just as character, integrity, character and the spiritual belief system have their place in our lives. Battle-tested methods refined and built with a solid foundation applied to the markets will take you to the bank.


As an investor with too many hours of experience to admit, I have learned a lot and made a lot of money. Yet do not be lulled into thinking that just because someone has a lot of experience or money that they are good at what they do. It is not about the years of experience or even the amount of money currently in the bank account, it is about the quality of the experience that matters. This is what keeps your money in the bank. Making money is not the hard part, keeping the money is.

In such terms, the notion that "how you play the game matters much more than winning" applies. Relative to actually trading, in my opinion it does not matter save* insider trading, intentional price manipulation. 



There is the rub. From my research spanning back to the 1500's and lifetime experience, that video clip demonstrates a lot. The coach that ordered that play was willing to win through trick's and extreme deception, not skill. The young players did what they where ordered. Just like corporate employees do what they are told. Once they realize what they have done, is after the fact.
Much of this all narrows down to the human trait of selfishness.  


If you cannot handle the heat get out of the kitchen. Even if you can handle the heat, eventually you will get burned out without a very solid internal belief

system coupled with an evolving battle-test method applicable to the market.



*save–preposition
1.
except; but: All the guests had left save one.

Friday, October 15, 2010

Methods create results.

The markets are the most effective teacher and sadly by the time most figure out and refine their system, they run out of money or get fired. Then they think they have failed, pursue another career because they think trying something else is the logical choice.

See whenever we start any course of action or project, there are immediate visible and measurable results, which leads us to continue down the new path convicted and confident of our new choice. Guess what...when you first embarked upon your previous path, I am almost certain a similar experience happened.

Staying the course, reviewing the situation, is the key at these times. It is amongst the pure chaos, and disarray that you must stay inside the eye of the hurricane and move with it. Let your results unfortunately lay waste as they will as a result of your methods, do what you can to salvage whatever you can, and use the chaos to refine the destructive methodology. In fact, the pivot points of the markets provide the best points of entry and exit; one will find are later revealed as the best risk reward positions as the correct trade unfolds. Trades that work right from the start, will quickly prove their longer term success. Amongst these trades is where you want to operate, the rest is noise.

There is no such thing as fast, easy money. Any process or system is better than no system, and eventually sticking to a system that generates some form of success, no matter how random or strange it is, is what will take you to the bank.

Watch this clip not for the real estate pimping, rather try to capture the message.







Friday, October 8, 2010

Batting averages, icebergs, ideas, and madness of crowds

As speculators, we capitalize from observation and strive to retain an objective view of the market's regardless of condition. We will share this with you, that what is seen in the headlines, or even widely known, is merely the tip of the iceberg. What is underneath the surface is what has high impacts. It is these things that sinks double hulled Titanic cruise ships as an example.

On the day to day level, among the noise and chatter of those getting busy, it is predictable to lose sight and increase error as one is busy scouting out iceberg "tips". We focus on base hits and expect that a 300 batting average successful. Yet a 550 average would be required as investment activity increases to stay in business with little to show for all the effort.  Instead we are like a submarine using radar and evaluating the landscape underneath which supports the surface activity. We find wave theory as a valuable component of our methodology.

We respect Mr. Prechter's work and insight. We also are of the opinion that he represents a skilled investor. Kind enough to share his work, yet smart enough not to give it away for free and find a way to extract predictable cash flow to his operations.


We observe that intellectual productivity in today's society is operating at signifigantly below capacity. The creative destruction in the US as it strives to move from production toward service is significant. Knowledge capital will become more difficult to convert into cash, causing the service sector to grow and the manufacturing sector to grow as required to support future infrastructure and "things".

As Prechter has found looking at thousands of years of expansion and contraction, in the year 2000 we have entered the Dark Ages, where we must innovate and refine future methods to result in growth from new and existing sources of materials and ideas. We will speak plainly, NO, we are not interested in doom and gloom.

Prechter's May newsletter provided below; we have found several independent and objective indicators confirming similar outcomes as well.

Robert Prechter at Elliott Wave International  thinks we’re on the verge of the “biggest bear market in nearly 300 years”.  Prechter, who believes the market moves in predictable waves, says the long-term pattern is one of dramatic upward trends with severe corrections inbetween.

He provides the following chart to show the very long-term trend in stock prices.  Prechter believes the current downtrend is simply the beginning of a much more dramatic move that mirrors past market declines.  Based on this data the market is well overdue for a sizable correction:

“Not even Major League Baseball can rival the stock market’s wealth of statistical data. And after studying the relevant data and analyzing the long-term pattern, Prechter offered this conclusion in the May issue of The Elliott Wave Theorist: “The current bear market will be the biggest in nearly 300 years.“

Yes, Britain’s “South Sea Bubble” in the early 1720s was the last time a bear market was comparable to what we may see unfolding now — it’s represented by that vertical drop which you see on the chart.”



If you are interested in learning more about the South Sea Bubble and many other insights into the ways crowds behave, see our Library