We let this last day pass, to see if a higher volume commitment could occur (and it did) and to see if the market held at market tops. The market did top at 11623 by early afternoon.
Put traders to the OTM Aug540P took a second buy, and our costs should now be averaged well for a tight profit if the market recedes on any news.
Data showed private sector job growth was good ( a false fact), and then news that Bushy Feds were extending emergency loan relief (national debt at all times of the history of the country, but taxes are lowered:)) took the market up.
Read our Dow projections very carefully as we are approaching potential tops.
__________________
Yesterday Floyd lectured on Freddie and Fannie, and it's now time to come back to the USD.
For three years Floyd has lectured about what we have done to the USD $. I fully blame George Bush, and believe that this is FAR worse than Iraq, or environmental concerns, or any of the folly he has led us through.
By taking our eye off the ball with financial institutions, and allowing the rich to have no controls put to them (sadly necessary) we have allowed profit mongers to destroy our financial models, and have blindly paid into it.
In a short time I believe the USD could truly have NO value. This means our $1.00 bill would JUST be paper, and this doomsday thinking does not state we will not "trade for other things," which is what the USD and all currency really does, but that we will have diminished our buying power to that of a Third World Country.
Now is the time to be in CASH as a primary investment. To trade OEX Options short term, and stocks only for fast profits if speculative.
Now is the time to believe the Government is so far gone that it will take years to even begin to fix what we have allowed to happen, and that our deficit will skyrocket even more as the dollar devalues.
The question, therefore, is NOT whether our taxes will be raised (as they are already raised, just in ways we don't know it) BUT what our dollar will be worth.
There are no investments more safe or of potential than in Gold and Silver. Using GLD and SLV to track, the full commodity ETF's for Gold and Silver, we believe that over the next five years we will see greater safety and return on investment in GLD and SLV, and especially in Silver, than in any other methodology to trade.
From Level 3 Trader MP:
Hey Floyd...
"I need some advice on my "behavior" today...
I understand that your alert today said: DO NOT TRADE..."Watch the market"...
I saw this as an opportunity to practice my skills as a day trader/scalper...to see if I am watching the market correctly...to see if I can "BREATHE WITH" the market...I keep reminding myself that the DOW is a living organism...comprised of people like me...with all sorts of money and emotions...Anyway...here is what happened as I observed...
I read the tape from 9:32-9;35....I recognized a +30 differential (likely upside day) and I also noticed within the 1st 15 minutes that DOW hit 11,540 (our old support and resistance level) and came back down to test 11,500...I figured that this would be a perfect time to scalp some calls b/c of the futures being up, the tape bing +30 etc....I bought (5) 580 calls for 14.90...sold them minutes later for 16.10...that is $600 profit.
About an hour later the DOW pull back and the 580 call hit 14.90...I bought 5 more and sold them quick at 15.40...another 50 cents or $250
I then left to take my girls to the pet store to buy a little fishy for the tank. I had my Blackberry with me...I began to notice that the DOW was making lower highs...it would drop and pull back up...drop and pull back up...FROM MY CAR...using my Blackberry...I bought 5 more calls for 14.70 only to sell them two traffic lights later for 15.20...another 50 cents or $250...
By the time I got home...the DOW had dropped to 11,420...it pulled back up to 11,470 and I "figured" that this would be a great time to scalp some puts since she will likely test that support area again...I bought (5) puts for 8.00....and sold them 15 minutes later for 8.60...another 60 cents or $300.
After the DOW bounced off of the 11,420...I WAITED...
I watched and noticed that the DOW was not above 11,470 since noon time...therefore...the edge I was looking for was that break past this level...When she took off past 11,470 or S1 on the OX...I bought 5 more calls and made 1.40 profit or $700 to finish the day.
On the day...I ended up 5 for 5 with my trades...for a total of 4.20 profit or $2100...not bad for a stay at home Dad..
The problem is that I am a bit concerned...I need to remember humility and remind myself that I am still new at this. What do you think? Am I doing this correctly or am I just getting lucky? Should I even be doing this when you tell us in the alerts not to trade and watch the market...
What I am finding is that there are times, like today, that if I just let the market do what it does...if my mind is clear and I don't have any presuppositions...it will almost tell me what to do...
What do you think?"
From Level 3 Trader MP
Floyd-> This is a trader LEARNING to perfectly trade as the market breathes. It's a perfect example of how to trade.
Wednesday, July 30, 2008
What a Difference a Day Makes
What a difference a day makes:) Oil retreated, and financials made a comeback, and the market took back all of Monday's downturn.
It was great news for our traders with the August580C, which hit highs of 11.30, and hit our projections.
The Dow moved to 11,440. Study our new Dow projections well, as whipsaw is likely to continue.
Thirty years ago the U.S. total outstanding mortgage debt was 30% of our GDP. At that time homeowners held 70% equity. Today.....mortgage debt is 80% of our GDP, and the equity positions are 50% and less, and falling.
Fannie and Freddie made this possible as reams of Democrats and Republicans allowed these companies to finance more than 80% of new mortgages in this country. Released from capital ratio requirement and backed with a line of credit at the Treasury, they were able to buy a nearly unlimited amount of mortgages.
Now, Senator Chris Dodd, a true idiot, leads a mortgage bailout program for Bush and the boys. This bailout is perfectly wrong:
1. Written by Bank of America
2. Developed by Dodd, who personally received a half million in mortgage benefits with Countrywide Mtge personally, and leads to now tax Fannie and Freddie for $600 million.
Republicans will discuss how Obama is going to raise taxes (not true) while neglecting this bail out alone is entirely financed by the American taxpayer.
Floyd believes that Fannie and Freddie are truly liable for 5 trillion in mortgages and real facts will finally come out in falsified values and books to force them to insolvency. This will occur after we have funded a bail out, increased taxes, and put money through HUD to pay Fannie and Freddie.
These are REAL facts. In the papers you read "Congress to provide financial incentive to strengthen Government mortgages".
It was great news for our traders with the August580C, which hit highs of 11.30, and hit our projections.
The Dow moved to 11,440. Study our new Dow projections well, as whipsaw is likely to continue.
Thirty years ago the U.S. total outstanding mortgage debt was 30% of our GDP. At that time homeowners held 70% equity. Today.....mortgage debt is 80% of our GDP, and the equity positions are 50% and less, and falling.
Fannie and Freddie made this possible as reams of Democrats and Republicans allowed these companies to finance more than 80% of new mortgages in this country. Released from capital ratio requirement and backed with a line of credit at the Treasury, they were able to buy a nearly unlimited amount of mortgages.
Now, Senator Chris Dodd, a true idiot, leads a mortgage bailout program for Bush and the boys. This bailout is perfectly wrong:
1. Written by Bank of America
2. Developed by Dodd, who personally received a half million in mortgage benefits with Countrywide Mtge personally, and leads to now tax Fannie and Freddie for $600 million.
Republicans will discuss how Obama is going to raise taxes (not true) while neglecting this bail out alone is entirely financed by the American taxpayer.
Floyd believes that Fannie and Freddie are truly liable for 5 trillion in mortgages and real facts will finally come out in falsified values and books to force them to insolvency. This will occur after we have funded a bail out, increased taxes, and put money through HUD to pay Fannie and Freddie.
These are REAL facts. In the papers you read "Congress to provide financial incentive to strengthen Government mortgages".
Tuesday, July 29, 2008
I Trust You Did Well
It is hard to fathom just how sick this market is, and how much FEAR pervades day to day trading. In our Dow projections for Monday we noted potential downsides that could occur and recommended an OTM put.
The August 540P was available as low as 1.80, and could have sold to highs of 3.40. Many traders bought on this one, and were able to sell for 30% and more profits.
Second buys were made on our open August580C, also, as traders watched the day begin with some trepidation, only to blast to the bottom with a 239 point drop, again on FEAR.
Our Dow projections listed a strong potential of another bottom test for yesterday, and the market did not hesitate in falling like a knife. Again, if the market is able to hold at 10,800 and higher we risk a true bear market. If the market does not hold at these support lines, 10,500 and lower are very possible.
Elect smartly. All of this could have been avoided.
Level 3 trader MP had a great testimonial, as he's learning to watch the market breathe:
"Hey Floyd...
Though the market slowly tumbled today...I was able to make some money and put myself in a good position...at least I think I did...let me hear your thoughts....
Here is what I did today...
First of all....I was holding (1) AUG 580 call contract from last Friday at 10.70
I was very patient and waited for the OEX to get to about S3...I bought 5 more calls for 7.50 to give me a total of 6 calls for an average of about 8.00...I was able to sell them a short while later to break even.
Shortly after that I bought 5 more calls for 7.20 and sold them quickly for 7.70...A $250 profit.
A few minutes later I bought for 5 more calls for 7.10 only to sell them minutes later for 7.40...made another $150...
Bottom line...I got rid of my large losing contract from last week by breaking even and I made two smaller trades today which allowed me to walk away with $400. If I make $400/day...that's 80K on the year!!! NOT BAD for a stay at home Dad!!
All the while, I did not try to chase the put...I just played the call signal off of the support lines and took quick profits.
Since the AUG 580 call was still the signal for the day...I ended up purchasing 2 more contracts at the end of the day at 6.30 looking for a bounce up tomorrow...if not...I can still make a 2nd purchase.
What do you think?
I trust you did well yourself"
The August 540P was available as low as 1.80, and could have sold to highs of 3.40. Many traders bought on this one, and were able to sell for 30% and more profits.
Second buys were made on our open August580C, also, as traders watched the day begin with some trepidation, only to blast to the bottom with a 239 point drop, again on FEAR.
Our Dow projections listed a strong potential of another bottom test for yesterday, and the market did not hesitate in falling like a knife. Again, if the market is able to hold at 10,800 and higher we risk a true bear market. If the market does not hold at these support lines, 10,500 and lower are very possible.
Elect smartly. All of this could have been avoided.
Level 3 trader MP had a great testimonial, as he's learning to watch the market breathe:
"Hey Floyd...
Though the market slowly tumbled today...I was able to make some money and put myself in a good position...at least I think I did...let me hear your thoughts....
Here is what I did today...
First of all....I was holding (1) AUG 580 call contract from last Friday at 10.70
I was very patient and waited for the OEX to get to about S3...I bought 5 more calls for 7.50 to give me a total of 6 calls for an average of about 8.00...I was able to sell them a short while later to break even.
Shortly after that I bought 5 more calls for 7.20 and sold them quickly for 7.70...A $250 profit.
A few minutes later I bought for 5 more calls for 7.10 only to sell them minutes later for 7.40...made another $150...
Bottom line...I got rid of my large losing contract from last week by breaking even and I made two smaller trades today which allowed me to walk away with $400. If I make $400/day...that's 80K on the year!!! NOT BAD for a stay at home Dad!!
All the while, I did not try to chase the put...I just played the call signal off of the support lines and took quick profits.
Since the AUG 580 call was still the signal for the day...I ended up purchasing 2 more contracts at the end of the day at 6.30 looking for a bounce up tomorrow...if not...I can still make a 2nd purchase.
What do you think?
I trust you did well yourself"
Monday, July 28, 2008
More Banks Fail
More banks fail. Oil begins a slow break to the downside. American investors simply wait now to hear what bad news will come.
Much is said about the mental recession the country is in, and that the financial impact we are "reeling from" may, in fact, be more the emotions of the American investor than the reality of the situation. This means: we may have created much of our own fervor, and over reacting to market conditions.
Floyd believes this is very much true, as the downturn that so dramatically began a few weeks ago was so severe that "sell off" became much of the mix. This is just as true as when Indymac failed, partly because a member of Congress (yet again a guy that has never had a real job or owned a business) expressed concern about their ability to stay in business.
Fear, often irrational, now grips the market.
Study our Dow projections carefully. We are within a new trading range, with a market that needs a strong 100 point upside that holds to break the bear pattern, entirely dependent upon news and how we interpret the most recent "facts".
Much is said about the mental recession the country is in, and that the financial impact we are "reeling from" may, in fact, be more the emotions of the American investor than the reality of the situation. This means: we may have created much of our own fervor, and over reacting to market conditions.
Floyd believes this is very much true, as the downturn that so dramatically began a few weeks ago was so severe that "sell off" became much of the mix. This is just as true as when Indymac failed, partly because a member of Congress (yet again a guy that has never had a real job or owned a business) expressed concern about their ability to stay in business.
Fear, often irrational, now grips the market.
Study our Dow projections carefully. We are within a new trading range, with a market that needs a strong 100 point upside that holds to break the bear pattern, entirely dependent upon news and how we interpret the most recent "facts".
Friday, July 25, 2008
Who is Paying Off the Debt We Have Created
Just a few days ago the bulls were in heaven, and the end was never to come. Smiles. It came.
Our August600P sold to a high of 25.50 for some whopping one day returns, and we issued a new alert for a contrarian call in late afternoon trading, as we believe the sell off may potentially hold at OEX 580.
The week's gains were totally wiped out, after oil began rising, and Ford "lessened its reliance on SUV's and pick up trucks" and reported 8 billion in losses.
As Floyd says, "well deserved losses", just as the ongoing banking bubble is. While the Republicans discuss how the Democrats will raise taxes, I'll ask just one question:
Who is paying off the debt that we've created?
Reality is composed of separate things and events, and you are one of those things. When reality goes to separate bits it is actually an illusion created by the mind, and that in actuality everything goes together and exists in relation to everything else.
It all one continuous thing and one continuous event. For the awakened person this isn't a way of thinking about the world, a theory, but rather an experience of the way things are.
This includes the realization that all pairs of seeming opposites are really one, that they arise together and depend upon each other, and that the supposed conflict between opposites is also an illusion created by the mind.
Metaphysicians and transperson psychologists call this The Game of Black and White. This is the idea that life, for instance, must or could win over death, that good must win over evil, that having must win over not having, or in general that what you want must (or could) win over what you don't want.
Smart traders see things as they are, not should be, or "because they are". Smart trades do not believe in black and white, but only grey, and are suspicious of ANY absolutism.
This Floydian babble is key to understanding you, and thusly how to trade.
Our August600P sold to a high of 25.50 for some whopping one day returns, and we issued a new alert for a contrarian call in late afternoon trading, as we believe the sell off may potentially hold at OEX 580.
The week's gains were totally wiped out, after oil began rising, and Ford "lessened its reliance on SUV's and pick up trucks" and reported 8 billion in losses.
As Floyd says, "well deserved losses", just as the ongoing banking bubble is. While the Republicans discuss how the Democrats will raise taxes, I'll ask just one question:
Who is paying off the debt that we've created?
Reality is composed of separate things and events, and you are one of those things. When reality goes to separate bits it is actually an illusion created by the mind, and that in actuality everything goes together and exists in relation to everything else.
It all one continuous thing and one continuous event. For the awakened person this isn't a way of thinking about the world, a theory, but rather an experience of the way things are.
This includes the realization that all pairs of seeming opposites are really one, that they arise together and depend upon each other, and that the supposed conflict between opposites is also an illusion created by the mind.
Metaphysicians and transperson psychologists call this The Game of Black and White. This is the idea that life, for instance, must or could win over death, that good must win over evil, that having must win over not having, or in general that what you want must (or could) win over what you don't want.
Smart traders see things as they are, not should be, or "because they are". Smart trades do not believe in black and white, but only grey, and are suspicious of ANY absolutism.
This Floydian babble is key to understanding you, and thusly how to trade.
Thursday, July 24, 2008
Increased Awareness
Increased awareness actually affects your life. Most of us spend our days "living" and "dealing with the situation", and not living. Thusly as we "prozac" America, multi tasking cell phones and email in hand (literally), eat and guzzle gas (Floyd's sad American portrait) the babblers will tell us "family values" and the doomsters that the "end is near", while the rich get richer, and the middle class poorer. Many of these are historical by pattern, and without gain, we are repeating.
For the trader it's wiser to see reality for what it isn't, and for what it is. Not what you are not noticing. Most of us do not notice reality, as we are living within it. The calm trader is "watching the moment", not participating in it, and can see his/herself from the outside.
This is clearly metaphysical talk, and it works in trading.
Yesterday we did not issue for a new signal, seeing the market at potential tops. In morning trading, on a reduction to oil pricing, the market hit a theoretical Dow top of 11,738 and the OEX topped at 596.
This MAY be a top.
An interesting email from a subscriber on Floyd's "waiting the day out":
I do hope this does not come across as gushing!! How does a man tell another man - in this day and age especially - that he he truly admires the other? The trouble with email is tone of voice is missing, so I do hope you can plug that in yourself :-)
I have always admired not only your skill but your wisdom. Today that reached its height...... as follows.........
I "knew" best potential market top and, as you did not write it off yesterday despite the way down Futures before the market and despite sending out the Put recommendation, which I read as more of hedge, I admired your wisdom more than the skill. The market went ahead and did its stuff. It probably would have topped yesterday were it not for the setback start.
OK - so today there was no other view for me to take than the Dow would touch 11635 - 11640. If it winced back at this point it could be top and if it satyed below for "a while" then it was top. If it goes on through then its next halt is 11750 (all actual figures used). As it happened the Dow did wince at 11635 then surged up to 11700 before turning down to play at 11640, to be expected, then down to the next playground 11600, yesterday's close, but all trending down.
Around there somewhere I expected a mid-day Alert to confirm your view that the top had been reached. Radio silence - OK, good, THIS is what we learners need, no matter what grip we have on the technical study it is wisdom we need to develop - this makes me smile......... you are waiting for something, you are watching and there is a trigger, a confirmation that top was or was not reached, a.... dunno what to call it. Teach me all the technicals you like, it is the silent wisdom that I seek, and if it takes years then........ so be it of course!!
You stay silent when you watch and this is what I personally admire the most....... may I please ask your thoughts on today. I'm not asking for the message to trade or the signal or any of that stuff, I'm asking "as you watch, what is it that is going to make you sit forward in your chair and break silence?"
For the trader it's wiser to see reality for what it isn't, and for what it is. Not what you are not noticing. Most of us do not notice reality, as we are living within it. The calm trader is "watching the moment", not participating in it, and can see his/herself from the outside.
This is clearly metaphysical talk, and it works in trading.
Yesterday we did not issue for a new signal, seeing the market at potential tops. In morning trading, on a reduction to oil pricing, the market hit a theoretical Dow top of 11,738 and the OEX topped at 596.
This MAY be a top.
An interesting email from a subscriber on Floyd's "waiting the day out":
I do hope this does not come across as gushing!! How does a man tell another man - in this day and age especially - that he he truly admires the other? The trouble with email is tone of voice is missing, so I do hope you can plug that in yourself :-)
I have always admired not only your skill but your wisdom. Today that reached its height...... as follows.........
I "knew" best potential market top and, as you did not write it off yesterday despite the way down Futures before the market and despite sending out the Put recommendation, which I read as more of hedge, I admired your wisdom more than the skill. The market went ahead and did its stuff. It probably would have topped yesterday were it not for the setback start.
OK - so today there was no other view for me to take than the Dow would touch 11635 - 11640. If it winced back at this point it could be top and if it satyed below for "a while" then it was top. If it goes on through then its next halt is 11750 (all actual figures used). As it happened the Dow did wince at 11635 then surged up to 11700 before turning down to play at 11640, to be expected, then down to the next playground 11600, yesterday's close, but all trending down.
Around there somewhere I expected a mid-day Alert to confirm your view that the top had been reached. Radio silence - OK, good, THIS is what we learners need, no matter what grip we have on the technical study it is wisdom we need to develop - this makes me smile......... you are waiting for something, you are watching and there is a trigger, a confirmation that top was or was not reached, a.... dunno what to call it. Teach me all the technicals you like, it is the silent wisdom that I seek, and if it takes years then........ so be it of course!!
You stay silent when you watch and this is what I personally admire the most....... may I please ask your thoughts on today. I'm not asking for the message to trade or the signal or any of that stuff, I'm asking "as you watch, what is it that is going to make you sit forward in your chair and break silence?"
Wednesday, July 23, 2008
The Market in a Nutshell
This is the market in a nutshell:
1. The Dow moved to tops of 11,646.
2. FEAR on earnings led the first downside steps, to lows of 11,347.
Our open August 600C, two buys made, hit profits of to a top of 5.70. We had provide a top market sell to 6.40. Two buys could have been made on this, and profits are established.
In morning futures we saw a negative downside and recommended a high risk trade to the Aug525P. This position was available at up to 2.15, and hit no profits, only to lose value as the market moved higher later in the day.
The market now is at a count of 9 to the call. This shows an over extension to upside, and we consider the risk rising for the upside, as we've now hit market tops. Not yet time to recommend to the put, we'll open the market without a new signal, and advise intraday on market conditions.
Sorry, but I'd rather tell you not to trade than to trade just to "get in the market"
From trader BD:
"I added to my put position yesterday at the market open, 560 and 520, which I will exit today. Scalped profits on partial puts yesterday.
Opened call position yesterday at 3.60, will look to add to today."
This trader USES our alerts, and understands the market. Signals, not a key part of our work, he understands.....and uses for the parameters in which we build our trading education.
Next, Larry Berg tells us what could happen:
" Due to the current inaction to the world energy crisis by our U.S. Congress and its current President Bush . . . this is what happens . . .
Now, probably the most dangerous period in World History ---
Obama is elected President along with an overwhelmingly Democratic Congress. He immediately starts removing troops from Iraq. The price of oil starts to move up again and world stock markets continue to fall. Al Qaeda begins to re-establish itself in Iraq. Terrorists commit public mass murder of Iraqi citizens and government officials. Iran issues statement sympathizing with insurgents, considers the region 'theirs for the taking', steps up its nuclear enrichment program and ignores all United Nations sanctions.
Obama, at the urging of the public and press, has to insert troops again into Iraq to regain control. Too late. It fails. Insurgents take full control of major Iraqi cities and Iraqi oil fields. Oil prices increase dramatically from $140 to $200.
Iran increases it's infiltration of Iraq, supporting terrorists with supplies and weapons for anyone who may want to destabilize Iraq. Obama warns Iran to stay out of Iraq (ala Nixon's threat to China and U.S.S.R. to stay out of Vietnam). Iran warns of destruction of Israel if U.S. attacks Iran.
Obama warns Iran it will pursue air strikes against Iran (with the approval of a strongly Democratic Congress) if Iran does not stop assisting terrorists in Iraq. Iran responds by threatening to attack Persian Gulf shipping. Oil pushes up to $300. Obama submits to U.N. proposal to divide Jerusalem into two sections, one Christian one Moslem, fulfilling Biblical prophecy that Jerusalem will be divided at the 'end time'.
Iran attacks and sinks a Persian Gulf oil tanker. Obama has no choice but to defend oil transportation. Obama moves aircraft carrier group into the Persian Gulf and issues air strikes against Iranian coastal missile sites and Iranian Patrol Boats responsible for the attacks. Oil hits $500 overnight. World economies and markets tailspin. Obama insists that everything is "under control".
In the mean time Obama and Democratic Congress restrict all U.S. communications companies from monitoring overseas communications. Al Qaeda communicates to U.S. terrorist cells and implements terrorist attack in Chicago. 500 people die in car bombing of the World Trade Center.
Russia issues message of its support for Iran. Obama warns Russia not to insert itself into the confrontation. Russia moves hardware to support Iran. Oil hits $800. Transportation of world goods and services comes to a halt. World economies crash.
Russia supports Iranian ground-to-air missile attacks against U.S. aircraft. Oil hits $1,000. You can take it from there . . .
As the Boy Scout motto says, 'Be Prepared'. Brazil is the only country in the world which is energy independent, America friendly, Christian and able to survive the coming world political and economic crisis. Bill Gates is now buying up as much Brazilian ranch land as he can, investing in Brazilian sugarcane ethanol. I wonder . . . is it simply an investment or a means of survival?"
And Floyd give us his:
What happens if McCain comes in, using the same scenario above? War is good to John boy, "take no prisoners" thinking. Environmentally about as far right as can be imagined, McCain would bring the bravado to the frey, the same bravado that has built our fear, built our "we can get em" Bush attitude.
Elect smart.
Floydian thinking:
If a trader believes, in the market that we are experiencing, that each signal will be profitable it's time to close the bank.
Market conditions are simply extraordinary, frightening, and not clearly chartable. 2000 point drops to 500 point rises, to whipsaw that occurs almost hourly at this point. Each of our signals was profitable last week.
One trade has been profitable this week, but expect to lose on some trades. This is NOT negative thinking, just facing the facts of the type of market we are dealing with.
1. The Dow moved to tops of 11,646.
2. FEAR on earnings led the first downside steps, to lows of 11,347.
Our open August 600C, two buys made, hit profits of to a top of 5.70. We had provide a top market sell to 6.40. Two buys could have been made on this, and profits are established.
In morning futures we saw a negative downside and recommended a high risk trade to the Aug525P. This position was available at up to 2.15, and hit no profits, only to lose value as the market moved higher later in the day.
The market now is at a count of 9 to the call. This shows an over extension to upside, and we consider the risk rising for the upside, as we've now hit market tops. Not yet time to recommend to the put, we'll open the market without a new signal, and advise intraday on market conditions.
Sorry, but I'd rather tell you not to trade than to trade just to "get in the market"
From trader BD:
"I added to my put position yesterday at the market open, 560 and 520, which I will exit today. Scalped profits on partial puts yesterday.
Opened call position yesterday at 3.60, will look to add to today."
This trader USES our alerts, and understands the market. Signals, not a key part of our work, he understands.....and uses for the parameters in which we build our trading education.
Next, Larry Berg tells us what could happen:
" Due to the current inaction to the world energy crisis by our U.S. Congress and its current President Bush . . . this is what happens . . .
Now, probably the most dangerous period in World History ---
Obama is elected President along with an overwhelmingly Democratic Congress. He immediately starts removing troops from Iraq. The price of oil starts to move up again and world stock markets continue to fall. Al Qaeda begins to re-establish itself in Iraq. Terrorists commit public mass murder of Iraqi citizens and government officials. Iran issues statement sympathizing with insurgents, considers the region 'theirs for the taking', steps up its nuclear enrichment program and ignores all United Nations sanctions.
Obama, at the urging of the public and press, has to insert troops again into Iraq to regain control. Too late. It fails. Insurgents take full control of major Iraqi cities and Iraqi oil fields. Oil prices increase dramatically from $140 to $200.
Iran increases it's infiltration of Iraq, supporting terrorists with supplies and weapons for anyone who may want to destabilize Iraq. Obama warns Iran to stay out of Iraq (ala Nixon's threat to China and U.S.S.R. to stay out of Vietnam). Iran warns of destruction of Israel if U.S. attacks Iran.
Obama warns Iran it will pursue air strikes against Iran (with the approval of a strongly Democratic Congress) if Iran does not stop assisting terrorists in Iraq. Iran responds by threatening to attack Persian Gulf shipping. Oil pushes up to $300. Obama submits to U.N. proposal to divide Jerusalem into two sections, one Christian one Moslem, fulfilling Biblical prophecy that Jerusalem will be divided at the 'end time'.
Iran attacks and sinks a Persian Gulf oil tanker. Obama has no choice but to defend oil transportation. Obama moves aircraft carrier group into the Persian Gulf and issues air strikes against Iranian coastal missile sites and Iranian Patrol Boats responsible for the attacks. Oil hits $500 overnight. World economies and markets tailspin. Obama insists that everything is "under control".
In the mean time Obama and Democratic Congress restrict all U.S. communications companies from monitoring overseas communications. Al Qaeda communicates to U.S. terrorist cells and implements terrorist attack in Chicago. 500 people die in car bombing of the World Trade Center.
Russia issues message of its support for Iran. Obama warns Russia not to insert itself into the confrontation. Russia moves hardware to support Iran. Oil hits $800. Transportation of world goods and services comes to a halt. World economies crash.
Russia supports Iranian ground-to-air missile attacks against U.S. aircraft. Oil hits $1,000. You can take it from there . . .
As the Boy Scout motto says, 'Be Prepared'. Brazil is the only country in the world which is energy independent, America friendly, Christian and able to survive the coming world political and economic crisis. Bill Gates is now buying up as much Brazilian ranch land as he can, investing in Brazilian sugarcane ethanol. I wonder . . . is it simply an investment or a means of survival?"
And Floyd give us his:
What happens if McCain comes in, using the same scenario above? War is good to John boy, "take no prisoners" thinking. Environmentally about as far right as can be imagined, McCain would bring the bravado to the frey, the same bravado that has built our fear, built our "we can get em" Bush attitude.
Elect smart.
Floydian thinking:
If a trader believes, in the market that we are experiencing, that each signal will be profitable it's time to close the bank.
Market conditions are simply extraordinary, frightening, and not clearly chartable. 2000 point drops to 500 point rises, to whipsaw that occurs almost hourly at this point. Each of our signals was profitable last week.
One trade has been profitable this week, but expect to lose on some trades. This is NOT negative thinking, just facing the facts of the type of market we are dealing with.
Monday, July 21, 2008
False Information in the Marketplace
Last week a six week downside streak was broken. This is the longest losing streak since the Great Depresssion. All five of our signals were profitable.
11,540 tops were hit Friday, a strong resistance area. The count is still biased to the call, but the upside may soon be slowed oil price rises, or earnings.
We'll not yet offer dual trades, but recommend a tight trade to the call, noting futures and morning news should influence your decisions further.
A variety of quoted tidbits I've pulled out of my readings, all relevant to your understanding of the world economic view:
"Market intervention by the Treasury and Federal Reserve over last weekend again confounded short sellers and the markets trended upwards on strong volume. The S&P 500 and NASDAQ Composite reversed a 5 week losing streak. This looks very much like the reversal that occured in March following the Bear Sterns rescue and will likely result in a similar short term bounce. In March we were told Bear Sterns was too big to fail and now, more convincingly, the same is said of Fannie Mae and Freddie Mac. The Congress is likely to pass legislation bailing out the share and bond holders and the markets have heaved a sigh of relief. In our opinion it is another bear market rally that will ultimately fail because the underlying fundamentals have not changed.
Financial institutions have so far acknowledged only about a quarter of the losses they are ultimately expected to bear. The failure of IndyMac Bank is likely to be followed by further bank failures as home prices continue to fall and bad mortgage loans continue to accumulate. The housing market will continue to fall into next year, and possibly beyond, leaving many homeowners and ex-homeowners feeling impoverished. Energy prices will remain high although they will fall slightly as demand falls and if middle east tensions ease, but higher energy costs will hurt Detroit car makers further and sap consumer discretionary spending.
The demise of IndyMac, coming on the heels of Bear Stearns desperate sale to JP Morgan Chase, is a sure sign of the fragility of today's markets. What's needed now, more than ever, is reliable information for investors and confidence that trading can be conducted without the illegal influence of manipulation.
When an irrational panic is fueled by a sense of urgency, false rumors that must be acted on immediately and the FEAR that everyone may get out first, market integrity is threatened. It is the job of market cops to provide a measure of confidence that financial information about public companies is accurate and reliable-and when it is not, to punish those responsible.
There is a great deal of intentionally false information in the marketplace."
11,540 tops were hit Friday, a strong resistance area. The count is still biased to the call, but the upside may soon be slowed oil price rises, or earnings.
We'll not yet offer dual trades, but recommend a tight trade to the call, noting futures and morning news should influence your decisions further.
A variety of quoted tidbits I've pulled out of my readings, all relevant to your understanding of the world economic view:
"Market intervention by the Treasury and Federal Reserve over last weekend again confounded short sellers and the markets trended upwards on strong volume. The S&P 500 and NASDAQ Composite reversed a 5 week losing streak. This looks very much like the reversal that occured in March following the Bear Sterns rescue and will likely result in a similar short term bounce. In March we were told Bear Sterns was too big to fail and now, more convincingly, the same is said of Fannie Mae and Freddie Mac. The Congress is likely to pass legislation bailing out the share and bond holders and the markets have heaved a sigh of relief. In our opinion it is another bear market rally that will ultimately fail because the underlying fundamentals have not changed.
Financial institutions have so far acknowledged only about a quarter of the losses they are ultimately expected to bear. The failure of IndyMac Bank is likely to be followed by further bank failures as home prices continue to fall and bad mortgage loans continue to accumulate. The housing market will continue to fall into next year, and possibly beyond, leaving many homeowners and ex-homeowners feeling impoverished. Energy prices will remain high although they will fall slightly as demand falls and if middle east tensions ease, but higher energy costs will hurt Detroit car makers further and sap consumer discretionary spending.
The demise of IndyMac, coming on the heels of Bear Stearns desperate sale to JP Morgan Chase, is a sure sign of the fragility of today's markets. What's needed now, more than ever, is reliable information for investors and confidence that trading can be conducted without the illegal influence of manipulation.
When an irrational panic is fueled by a sense of urgency, false rumors that must be acted on immediately and the FEAR that everyone may get out first, market integrity is threatened. It is the job of market cops to provide a measure of confidence that financial information about public companies is accurate and reliable-and when it is not, to punish those responsible.
There is a great deal of intentionally false information in the marketplace."
Friday, July 18, 2008
Keep an Even Keel
Oil went down, and earnings for several blue chip companies were good. This was the trigger to move the market to a high volume follow through day, where the market moved to theoretical Dow tops of 11,487.
Traders were able to buy the July 580C as low as 1.50, and sell to highs of 4.40, for the 4th profitable trade of the week, and leaving us with no open inventory.
Bulls are now in charge, and the market babblers will be telling us of the upside potential, and that the worst is past.
To understand what is really occurring, we need to understand more of WHY oil went up, WHY mortgages defaulted, and WHY no government intervention has helped.
Floyd Lessson #4788:
Let's assume the mortgage industry problem started from how the industry was structured with three different groups. The first group was paid by how many underwritings they could sell. So they had an incentive to make it easier for people to get mortgages. No documentation. No money down.
The next group is the rating services. House prices were going up, because house prices always go up, and there's a big demand for housing from mortgages with no money down. So house prices went up. Rating services looked for the pieces of paper already issued, and they found that in the bubble no one had defaulted. They then falsely concluded that these were great investments. And the third part of this story, is that investors concluded that these were great investments with clearly high returns and high credit ratings.
The mortgage industry reached the point where "everybody" who wanted a loan had one. By this time all the loans, the "paper" was stinking, and the industry was being held up by each sector inflating the true loan values. The house of cards fell.
At this point no one really knows who holds all the bad paper, and the house of cards erodes the financial sector because all the money is going bad. The losses mount with all financial institutions. The government will have to be at the rescue again.
______
Keeping an even keel while trading is key. You must be consistent while there is uncertainty in the market, and attempt to simply interpret conditions around support/resistance lines. Watch projections of short term movement. Have clarity to understand that it is your FEAR of not being right that causes the greatest losses. Once this behavior begins ("I am not going to make a living, I am failing my family, All my money is going away") the Fear of Failure combines with the FEAR of Loss, a double edged sword of set up to fail.
This is a form of self sabotage.
There is no real predictability. When traders complain Floyd is wrong on a signal, or group of signals, or when the market surprises us all with shocking developments only a few will be right in their prediction. It is our human desire to be able to predict that sets us up to fail most often. When we risk and must win, this is a form of "black and white, and one must win." It does not ever really occur. When one wins at anything, a sense of loss occurs. Think of that.
It's diabolically true.
To trade successfully one must be a professional, not an amateur.
Traders were able to buy the July 580C as low as 1.50, and sell to highs of 4.40, for the 4th profitable trade of the week, and leaving us with no open inventory.
Bulls are now in charge, and the market babblers will be telling us of the upside potential, and that the worst is past.
To understand what is really occurring, we need to understand more of WHY oil went up, WHY mortgages defaulted, and WHY no government intervention has helped.
Floyd Lessson #4788:
Let's assume the mortgage industry problem started from how the industry was structured with three different groups. The first group was paid by how many underwritings they could sell. So they had an incentive to make it easier for people to get mortgages. No documentation. No money down.
The next group is the rating services. House prices were going up, because house prices always go up, and there's a big demand for housing from mortgages with no money down. So house prices went up. Rating services looked for the pieces of paper already issued, and they found that in the bubble no one had defaulted. They then falsely concluded that these were great investments. And the third part of this story, is that investors concluded that these were great investments with clearly high returns and high credit ratings.
The mortgage industry reached the point where "everybody" who wanted a loan had one. By this time all the loans, the "paper" was stinking, and the industry was being held up by each sector inflating the true loan values. The house of cards fell.
At this point no one really knows who holds all the bad paper, and the house of cards erodes the financial sector because all the money is going bad. The losses mount with all financial institutions. The government will have to be at the rescue again.
______
Keeping an even keel while trading is key. You must be consistent while there is uncertainty in the market, and attempt to simply interpret conditions around support/resistance lines. Watch projections of short term movement. Have clarity to understand that it is your FEAR of not being right that causes the greatest losses. Once this behavior begins ("I am not going to make a living, I am failing my family, All my money is going away") the Fear of Failure combines with the FEAR of Loss, a double edged sword of set up to fail.
This is a form of self sabotage.
There is no real predictability. When traders complain Floyd is wrong on a signal, or group of signals, or when the market surprises us all with shocking developments only a few will be right in their prediction. It is our human desire to be able to predict that sets us up to fail most often. When we risk and must win, this is a form of "black and white, and one must win." It does not ever really occur. When one wins at anything, a sense of loss occurs. Think of that.
It's diabolically true.
To trade successfully one must be a professional, not an amateur.
Thursday, July 17, 2008
Like a Slow Moving Clock
Like a slow moving clock, the market finally turned. By late afternoon trader saw market tops of 11,281. Traders were profitable again (3 in a row) on our recommendation for the new call, and the August570C was available as low as 9.40, selling to a 15.70 high. Easy and profitable trades on the upside.
Floyd-super week. HIt 30% Monday, Tuesday, and 40% Wednesday. Each trade like clockwork. Takes stamina, but I am learning "no noise"-Thanks-Nat M., Nebraska
"I have done very well on the puts and calls this week, and am following the Dow projections to a T. You surprise me with your blunt honesty on things, and I'm impressed with your educated read on how we think"-Dave L., Chicago
The trigger for upside had nothing to do with a healthier market, simply a lowering in oil prices, and good quarterly reports from Intel and Abbot. Market tops may have been reached. What occurs today is key...if a committed market continues to increase in volume a true follow through day could occur. We're suspicious of it.
_______________________________
Essentially oil exporting nations have a window of perhaps 15 to 20 very good years ahead during which they can invest in alternate energy sources and continue to grow and diversify their economies. As the economies further diversity (Dubai for instance now has about 85 percent of its economy in nonoil industries) the economies become even more independent of oil.
The Middle East is only doing, in their export of oil, what we would do if we had this resource, and is doing it smarter than we are as buying consumers, or in the use of our own natural resources.
We as Americans have created the bubbles financially that are invading our economy.
"73% of Americans think fuel prices are bigger problem for the country that climate change". "64% of American s support lifting the federal ban on offshore drilling.
As always, the Chubby Americans see no future, only the present.
___
Many traders do not prepare for the market, and follow signals. They do not anticipate what support and resistance will occur during the day, nor do they see how news can move bias directionally in whipsaw within hours.
Strong traders spend much of their time watching the market, and being very certain of when they option trade, and trade in larger quantities. This type of trader has control of his or her emotions, and follows the market as a "living organism" in their reading of the news, or analysts reviews
One of the most important things I teach, that traders never do, is to coach yourself. Keep a journal of your trades, and your behavior. Review yourself.
I would think almost 90% of my first year subscribers do not keep a journal, or "try it only once."
You must know you to trade. It is that simple.
The more you know about the market and what you are trading, the better. You are watching for patterns, for open interest on a trade, for why it is happening. Supply and demand.
____
To succeed trading constant psychological analysis must take place. You are preparing your mind constantly for change, and for being able to look at your own behavior. It is your behavior that is interpreting the effects of the market, and thusly affecting yourself.
Part of what OEX Options and Floydism does is coach you to coach yourself. Do not expect to find a signal and buy it, or to suddenly get rich. Be the trader that makes a living, not a killing.
Floyd-super week. HIt 30% Monday, Tuesday, and 40% Wednesday. Each trade like clockwork. Takes stamina, but I am learning "no noise"-Thanks-Nat M., Nebraska
"I have done very well on the puts and calls this week, and am following the Dow projections to a T. You surprise me with your blunt honesty on things, and I'm impressed with your educated read on how we think"-Dave L., Chicago
The trigger for upside had nothing to do with a healthier market, simply a lowering in oil prices, and good quarterly reports from Intel and Abbot. Market tops may have been reached. What occurs today is key...if a committed market continues to increase in volume a true follow through day could occur. We're suspicious of it.
_______________________________
Essentially oil exporting nations have a window of perhaps 15 to 20 very good years ahead during which they can invest in alternate energy sources and continue to grow and diversify their economies. As the economies further diversity (Dubai for instance now has about 85 percent of its economy in nonoil industries) the economies become even more independent of oil.
The Middle East is only doing, in their export of oil, what we would do if we had this resource, and is doing it smarter than we are as buying consumers, or in the use of our own natural resources.
We as Americans have created the bubbles financially that are invading our economy.
"73% of Americans think fuel prices are bigger problem for the country that climate change". "64% of American s support lifting the federal ban on offshore drilling.
As always, the Chubby Americans see no future, only the present.
___
Many traders do not prepare for the market, and follow signals. They do not anticipate what support and resistance will occur during the day, nor do they see how news can move bias directionally in whipsaw within hours.
Strong traders spend much of their time watching the market, and being very certain of when they option trade, and trade in larger quantities. This type of trader has control of his or her emotions, and follows the market as a "living organism" in their reading of the news, or analysts reviews
One of the most important things I teach, that traders never do, is to coach yourself. Keep a journal of your trades, and your behavior. Review yourself.
I would think almost 90% of my first year subscribers do not keep a journal, or "try it only once."
You must know you to trade. It is that simple.
The more you know about the market and what you are trading, the better. You are watching for patterns, for open interest on a trade, for why it is happening. Supply and demand.
____
To succeed trading constant psychological analysis must take place. You are preparing your mind constantly for change, and for being able to look at your own behavior. It is your behavior that is interpreting the effects of the market, and thusly affecting yourself.
Part of what OEX Options and Floydism does is coach you to coach yourself. Do not expect to find a signal and buy it, or to suddenly get rich. Be the trader that makes a living, not a killing.
Wednesday, July 16, 2008
Study the Facts
"Of course, the people don't want war. But after all, it's the leaders of the country who determine the policy, and it's always a simple matter to drag the people along, whether it's a democracy, a fascist dictatorship, a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism, and exposing the country to greater danger".
This statement was made by Hermann Goering at the Nuremberg trials. My fear is that you repeat a statement enough times it becomes a fact to the voters.
It is FEAR politics that successfully reelected Bush, and if smart, the Republicans will try the same "good vs. evil" fear of terrorism as their only ploy.
Study the facts.
It is now FEAR economics that is creating even more concern, without even knowing the impact of the decision making.
_____
The key to trading successfully is understanding yourself. It is your own psychological fitness that defines your use of what you know. What you know and do will be different always only because of your emotions, your You, and how you trade your You.
Read this statement carefully. It's key to your success.
Trading is much like drinking alcohol or using drugs. It is how you manage the effect that is key. If you are unable to manage it you are addicted, not trading, where the trade may be powerless over his own behavior, and unmanageability.
No, you are not an addicted trader. No, trading is not using drugs.
But, you could be. And it could be like using drugs.
Everything is how you see and allow your YOU to be.
Yesterday's market was a perfect example of FEAR. The market hit a theoretical Dow bottom of 10,787 in morning trading, allowing traders to take a second buy on the August570C. Two buys averaged this contract at 10.80, and it sold to 14.00 by 2 p.m.
We were profitable on Monday's put, Tuesday the call, amidst whipsaw that never seems to stop.
America does not believe the government on Fannie and Freddie. It showed. Paulson's pitch was questioned by many, and the market continued to hesitate. Then, GM, unable to produce a car intelligently for many years, discussed restructuring to "stay in business". Ask Floyd: Fire all the top people at GM at one time, and start over. Nothing else will save this company from itself, until Toyota buys them.
In the past two weeks the market has blasted through every major support line, and hit new and deeper bottoms, 2 years of historical patterns broken. Upside moves may be short lived, and we do expect the whipsaw to continue
This statement was made by Hermann Goering at the Nuremberg trials. My fear is that you repeat a statement enough times it becomes a fact to the voters.
It is FEAR politics that successfully reelected Bush, and if smart, the Republicans will try the same "good vs. evil" fear of terrorism as their only ploy.
Study the facts.
It is now FEAR economics that is creating even more concern, without even knowing the impact of the decision making.
_____
The key to trading successfully is understanding yourself. It is your own psychological fitness that defines your use of what you know. What you know and do will be different always only because of your emotions, your You, and how you trade your You.
Read this statement carefully. It's key to your success.
Trading is much like drinking alcohol or using drugs. It is how you manage the effect that is key. If you are unable to manage it you are addicted, not trading, where the trade may be powerless over his own behavior, and unmanageability.
No, you are not an addicted trader. No, trading is not using drugs.
But, you could be. And it could be like using drugs.
Everything is how you see and allow your YOU to be.
Yesterday's market was a perfect example of FEAR. The market hit a theoretical Dow bottom of 10,787 in morning trading, allowing traders to take a second buy on the August570C. Two buys averaged this contract at 10.80, and it sold to 14.00 by 2 p.m.
We were profitable on Monday's put, Tuesday the call, amidst whipsaw that never seems to stop.
America does not believe the government on Fannie and Freddie. It showed. Paulson's pitch was questioned by many, and the market continued to hesitate. Then, GM, unable to produce a car intelligently for many years, discussed restructuring to "stay in business". Ask Floyd: Fire all the top people at GM at one time, and start over. Nothing else will save this company from itself, until Toyota buys them.
In the past two weeks the market has blasted through every major support line, and hit new and deeper bottoms, 2 years of historical patterns broken. Upside moves may be short lived, and we do expect the whipsaw to continue
Tuesday, July 15, 2008
Taxes According to Beer
A perfect save by the Plunge Protection Team, the government bail out of Fannie and Freddie, shot the market up to a Dow top of 11,279 by 10 a.m.
This allowed traders to make a best buy on the recommended August put at 12.70, and sell to highs of 17.50 within the next hour.
Traders could have also gained first entry to our August call at low as 13.80, not quite near our best buy bottom, but near, by 12 noon.
The government fix was questioned within hours. The market again went back to the 11,000 support line and hesitated.
Holding at 11,000 is a good sign for the market, kind of. The market hits this support line, and traces around it, day after day. Upsurges are short bursts on any trigger, and no amount of what is normally good news affects the market.
This shows a market no longer following cycles, but led by FEAR.
__________
Subject: Taxes According to Beer - Basic Tax Economics
Suppose that every day, ten men go out for beer and the bill for all ten
comes to $100.
If they paid their bill the way we pay our taxes, it would go something
like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men drank in the bar every day
and seemed quite happy with the arrangement, until one day, the owner threw
them a curve. Since you are all such good customers, he said, I'm going to
reduce the cost of your daily beer by $20. Drinks for the ten now cost just
$80.
The group still wanted to pay their bill the way we pay our taxes so the
first four men were unaffected. They would still drink for free. What
happens to the other six men - the paying customers? How could they divide
the $20 windfall so that everyone would get his fair share? They realized
that $20 divided by six is $3.33. But if they subtracted that from everybody
's share, then the fifth man and the sixth man would each end up being paid
to drink his beer. So, the bar owner suggested that it would be fair to
reduce each man's bill by roughly the same amount, and he proceeded to work
out the amounts each should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $ 14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued
to drink for free. But once outside the restaurant, the men began to compare
their savings.
"I only got a dollar out of the $20", declared the sixth man. He pointed to
the tenth man, "but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too.
It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I
got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything
at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up. The next night the
tenth man didn't show up for drinks, so the nine sat down and had beers
without him. But when it came time to pay the bill, they discovered
something important. They didn't have enough money between all of them for
even half of the bill!
And that, boys and girls, journalists and college professors, is how our
tax system works. The people who pay the highest taxes get the most benefit
from a tax reduction. Tax them too much, attack them for being wealthy, and
they just may not show up anymore. In fact, they might start drinking
overseas where the atmosphere is somewhat friendlier... (like they did when
Congress passed a high tax on yachts and the industry died here and went to
other countries).
David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
___
To trade successfully one must overcome market emotions. One must recognize that the markets will most certainly always be uncertain.
To trade successfully the professional trader identifies his or her own edges (their YOU), and thinks out the risk of each trade, and how their YOU will react to the risk.
And then, when trading, nerves of steel and knowing that each and every next moment will be unpredictable. Flowing thru the trade. New Age this may sound, but it is sound. The good trader is simply watching the event, silent witness, and trading what he/she sees as the emotions creating the effect.
This allowed traders to make a best buy on the recommended August put at 12.70, and sell to highs of 17.50 within the next hour.
Traders could have also gained first entry to our August call at low as 13.80, not quite near our best buy bottom, but near, by 12 noon.
The government fix was questioned within hours. The market again went back to the 11,000 support line and hesitated.
Holding at 11,000 is a good sign for the market, kind of. The market hits this support line, and traces around it, day after day. Upsurges are short bursts on any trigger, and no amount of what is normally good news affects the market.
This shows a market no longer following cycles, but led by FEAR.
__________
Subject: Taxes According to Beer - Basic Tax Economics
Suppose that every day, ten men go out for beer and the bill for all ten
comes to $100.
If they paid their bill the way we pay our taxes, it would go something
like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men drank in the bar every day
and seemed quite happy with the arrangement, until one day, the owner threw
them a curve. Since you are all such good customers, he said, I'm going to
reduce the cost of your daily beer by $20. Drinks for the ten now cost just
$80.
The group still wanted to pay their bill the way we pay our taxes so the
first four men were unaffected. They would still drink for free. What
happens to the other six men - the paying customers? How could they divide
the $20 windfall so that everyone would get his fair share? They realized
that $20 divided by six is $3.33. But if they subtracted that from everybody
's share, then the fifth man and the sixth man would each end up being paid
to drink his beer. So, the bar owner suggested that it would be fair to
reduce each man's bill by roughly the same amount, and he proceeded to work
out the amounts each should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $ 14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued
to drink for free. But once outside the restaurant, the men began to compare
their savings.
"I only got a dollar out of the $20", declared the sixth man. He pointed to
the tenth man, "but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too.
It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I
got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything
at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up. The next night the
tenth man didn't show up for drinks, so the nine sat down and had beers
without him. But when it came time to pay the bill, they discovered
something important. They didn't have enough money between all of them for
even half of the bill!
And that, boys and girls, journalists and college professors, is how our
tax system works. The people who pay the highest taxes get the most benefit
from a tax reduction. Tax them too much, attack them for being wealthy, and
they just may not show up anymore. In fact, they might start drinking
overseas where the atmosphere is somewhat friendlier... (like they did when
Congress passed a high tax on yachts and the industry died here and went to
other countries).
David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible
___
To trade successfully one must overcome market emotions. One must recognize that the markets will most certainly always be uncertain.
To trade successfully the professional trader identifies his or her own edges (their YOU), and thinks out the risk of each trade, and how their YOU will react to the risk.
And then, when trading, nerves of steel and knowing that each and every next moment will be unpredictable. Flowing thru the trade. New Age this may sound, but it is sound. The good trader is simply watching the event, silent witness, and trading what he/she sees as the emotions creating the effect.
Monday, July 14, 2008
Warren Gets It
Warren Buffet says that our recession will be "deep and last longer than many think." And Buffett is using his hoard of 35 billion of cash to buy companies now, saying "if the world fell apart I'd still invest in companies." And he says, "I think we've got fabulous capital markets in this country, and they get screwed up enough to make them even more fabulous. You do NOT want capital markets that function perfectly if you're in my business. People continue to do foolish things, and they always will."
Buffet is the world's richest man. He gets it.
Friday we saw a market that watched oil spike to 147.00 a barrel, and rumor that Fannie and Freddie were insolvent and the Bushy boys would have to bail out.
There is NO doubt in my mind that both of these mortgage giants are insolvent, and the books are bad, and will continue to be exposed for being bad. There is no doubt that if more negative exposure occurs we will have to borrow money from Communist China again to go to our massive debt to bail this out. The stimulus packages just sent out will seem,as they are, like nothing.
Whoever is elected will inherit a destroyed economy, gas at all time highs, USD at all time lows, Debt at all time highs, and corporations reeling with exposed debt.
Friday's fall off is frightening. For the first time in two years the market moved below Dow 11,000. It did not hold, and did close above 11,000, yet again averting a true bear market, but who knows for how long.
Many traders have had difficulty making money in the past month. This is right. It is almost impossible to make money trading stocks or options in markets that move 350 bi-directionally in a day, several times a week, and more difficult to even project longer term tops and bottoms. There are times simply...not to trade...unless you have stamina, the ability to stay with the market all through the day, and the fortitude to accept losses.
As a friend on the stock floor told me Friday " more money is being lost each day than I have ever seen in my brokering career"
Mike Gibbons with Breakoutwatch.com:
The optimism that followed the Bear Sterns rescue has evaporated and a new pessimism pervades the market as it contemplates the possible bankruptcy of Fannie Mae and Freddie Mac (F&F). Together they hold $5.3 trillion of debt with $3.7 trillion in mortgage backed securities. St. Louis Fed Chairman Poole estimates that F&F are already insolvent if fair value accounting rules are applied.
Adding to this gloomy picture, investment manager Bridgewater Associates now estimates that global financial losses will rise to $1.6 trillion. That is four times the value of writedowns that have been recognized so far. It is clear things are going to get worse! Just how much worse is described by Nouriel Roubini in his blog yesterday. The Professor was among the first to warn of the impending crisis back in 2006 and was scoffed at during 2007 but lately has been accorded the respect due. In August of 2006 he correctly predicted the eventual severe losses at F&F. Readers of this newsletter know we have frequently quoted him and do so again now:
"Expect a much sharper fall in equity prices in the US, advanced economies and emerging markets from current levels in the rest of 2008 as a severe US recession and global slowdown and a severe financial crisis and credit/liquidity crunch takes a more severe toll on earning of non-financial firms. In a typical US recession the S&P 500 falls – from peak to trough – by 28%; and this is not your typical run of the mill mild recession."
Roubini recommends being in cash or inflation-indexed bonds. He is also stridently opposed to the "mother of all bailouts" that a rescue of F&F would entail"
Long term 9800 is very possible. The presidential election could pull the economy up, Floyd thinks, and that oil sell off could actually stimulate the market. If oil is another bubble, how will the market itself react as it influences the closure of the global economy. That's what Floyd thinks. Who will bail out who?
Market conditions show a 5 count to the put, meaning more downside could easily occur. Yet, the market is vastly over extended, and ripe for upturn, as last Thursday's 156 point rise showed, but without follow through.
Two way trades are very possible. There is higher risk to this market, which is not following 21 day cycles at all, a clear sign that these tests of market bottoms are far more serious than those in our recent past. Two way trades,however, may also stop on the following news, and the market may react very positively. Follow futures carefully.
Buffet is the world's richest man. He gets it.
Friday we saw a market that watched oil spike to 147.00 a barrel, and rumor that Fannie and Freddie were insolvent and the Bushy boys would have to bail out.
There is NO doubt in my mind that both of these mortgage giants are insolvent, and the books are bad, and will continue to be exposed for being bad. There is no doubt that if more negative exposure occurs we will have to borrow money from Communist China again to go to our massive debt to bail this out. The stimulus packages just sent out will seem,as they are, like nothing.
Whoever is elected will inherit a destroyed economy, gas at all time highs, USD at all time lows, Debt at all time highs, and corporations reeling with exposed debt.
Friday's fall off is frightening. For the first time in two years the market moved below Dow 11,000. It did not hold, and did close above 11,000, yet again averting a true bear market, but who knows for how long.
Many traders have had difficulty making money in the past month. This is right. It is almost impossible to make money trading stocks or options in markets that move 350 bi-directionally in a day, several times a week, and more difficult to even project longer term tops and bottoms. There are times simply...not to trade...unless you have stamina, the ability to stay with the market all through the day, and the fortitude to accept losses.
As a friend on the stock floor told me Friday " more money is being lost each day than I have ever seen in my brokering career"
Mike Gibbons with Breakoutwatch.com:
The optimism that followed the Bear Sterns rescue has evaporated and a new pessimism pervades the market as it contemplates the possible bankruptcy of Fannie Mae and Freddie Mac (F&F). Together they hold $5.3 trillion of debt with $3.7 trillion in mortgage backed securities. St. Louis Fed Chairman Poole estimates that F&F are already insolvent if fair value accounting rules are applied.
Adding to this gloomy picture, investment manager Bridgewater Associates now estimates that global financial losses will rise to $1.6 trillion. That is four times the value of writedowns that have been recognized so far. It is clear things are going to get worse! Just how much worse is described by Nouriel Roubini in his blog yesterday. The Professor was among the first to warn of the impending crisis back in 2006 and was scoffed at during 2007 but lately has been accorded the respect due. In August of 2006 he correctly predicted the eventual severe losses at F&F. Readers of this newsletter know we have frequently quoted him and do so again now:
"Expect a much sharper fall in equity prices in the US, advanced economies and emerging markets from current levels in the rest of 2008 as a severe US recession and global slowdown and a severe financial crisis and credit/liquidity crunch takes a more severe toll on earning of non-financial firms. In a typical US recession the S&P 500 falls – from peak to trough – by 28%; and this is not your typical run of the mill mild recession."
Roubini recommends being in cash or inflation-indexed bonds. He is also stridently opposed to the "mother of all bailouts" that a rescue of F&F would entail"
Long term 9800 is very possible. The presidential election could pull the economy up, Floyd thinks, and that oil sell off could actually stimulate the market. If oil is another bubble, how will the market itself react as it influences the closure of the global economy. That's what Floyd thinks. Who will bail out who?
Market conditions show a 5 count to the put, meaning more downside could easily occur. Yet, the market is vastly over extended, and ripe for upturn, as last Thursday's 156 point rise showed, but without follow through.
Two way trades are very possible. There is higher risk to this market, which is not following 21 day cycles at all, a clear sign that these tests of market bottoms are far more serious than those in our recent past. Two way trades,however, may also stop on the following news, and the market may react very positively. Follow futures carefully.
Saturday, July 12, 2008
Gas is Available Everywhere
Some people in the past who knew very little biology were able to use the land without destroying it. We, who know a great deal of biology, are destroying our land in order to use it.
If we had a supply problem with oil, as some suggest, gas stations would be out of gas, and gas would not be plentiful.
I drove through the midwest last week and gas was available everywhere. Floydian facts would then logically articulate that gas is plentiful.
Oil refineries are NOT at capacity in the U.S. There are no plans to build more refineries by any oil companies.
What is the REASON refineries are not being built? Cost? Long term cost (10 years to pay a refinery off)? Or, does refinery production help limit our consumption and lead the price up?
Why is Texas the most profitable state right now?
The Chrysler building was sold to investors from Dubai.
Halliburton has moved their corporate offices to Dubai, United Arab Emirates.
Why is oil speculation on the stock exchange floor hugely volatile, and why are commodity floor traders gaining more wealth in the last 6 months than they have in years?
Why did Hummers have tax credits as "farm vehciles" and become the top selling "truck" in many years?
How long will it take for drilling in Alaska, or Florida, or wherever, actually TAKE to put more oil out in the market, and reduce our independence on the Middle East?
Why is subprime as a disaster economically continuing, despite massive bail outs by the FEDS?
Why is the "stimulus package" of "money back to Americans" not even talked about anymore?
How high is our deficit? Has it increased in the past 8 years? What plans are there to reduce it?
These questions are WHY the market is reacting, and in bear territory. None of them have been answered by the American people.
Yesterday we saw whiplash at its best, with Paulson telling us to revamp the financial markets while we heard that Fannie and Freddie are effectively bankrupt. Dow made a 15 billion deal for Rohm and Haas, that helped lead the market up, only to falter on crude oil moving up during the day.
Many of our trial subscribers, which amuses me, cancel immediately, when they see the extreme volatility of the market.
In a market like this, traders, only the most astute and fast trader will make a buck. Sorry, but it's true.
We saw a market that moved to theoretical Dow highs of 11,310, and Dow lows of 11,046 in one day. Both signals could have been profitable. We'll hold the call through day end today for any traders still holding for upside potential and will move to August issues with Monday's opening.
The July560P was available at below prior day close, and could have sold for tight 1.00 to 2.00 per contract profits yesterday.
I repeat again: only the most astute investor can profit on 250 point moves bi-directionally that occur intraday, with no obvious triggers.
I believe the market is also ripe for upside, and continually tests the same bottoms, and holds.
We'll use the same July call for intraday trades today, and recommend holding NO open position over the weekend.
If we had a supply problem with oil, as some suggest, gas stations would be out of gas, and gas would not be plentiful.
I drove through the midwest last week and gas was available everywhere. Floydian facts would then logically articulate that gas is plentiful.
Oil refineries are NOT at capacity in the U.S. There are no plans to build more refineries by any oil companies.
What is the REASON refineries are not being built? Cost? Long term cost (10 years to pay a refinery off)? Or, does refinery production help limit our consumption and lead the price up?
Why is Texas the most profitable state right now?
The Chrysler building was sold to investors from Dubai.
Halliburton has moved their corporate offices to Dubai, United Arab Emirates.
Why is oil speculation on the stock exchange floor hugely volatile, and why are commodity floor traders gaining more wealth in the last 6 months than they have in years?
Why did Hummers have tax credits as "farm vehciles" and become the top selling "truck" in many years?
How long will it take for drilling in Alaska, or Florida, or wherever, actually TAKE to put more oil out in the market, and reduce our independence on the Middle East?
Why is subprime as a disaster economically continuing, despite massive bail outs by the FEDS?
Why is the "stimulus package" of "money back to Americans" not even talked about anymore?
How high is our deficit? Has it increased in the past 8 years? What plans are there to reduce it?
These questions are WHY the market is reacting, and in bear territory. None of them have been answered by the American people.
Yesterday we saw whiplash at its best, with Paulson telling us to revamp the financial markets while we heard that Fannie and Freddie are effectively bankrupt. Dow made a 15 billion deal for Rohm and Haas, that helped lead the market up, only to falter on crude oil moving up during the day.
Many of our trial subscribers, which amuses me, cancel immediately, when they see the extreme volatility of the market.
In a market like this, traders, only the most astute and fast trader will make a buck. Sorry, but it's true.
We saw a market that moved to theoretical Dow highs of 11,310, and Dow lows of 11,046 in one day. Both signals could have been profitable. We'll hold the call through day end today for any traders still holding for upside potential and will move to August issues with Monday's opening.
The July560P was available at below prior day close, and could have sold for tight 1.00 to 2.00 per contract profits yesterday.
I repeat again: only the most astute investor can profit on 250 point moves bi-directionally that occur intraday, with no obvious triggers.
I believe the market is also ripe for upside, and continually tests the same bottoms, and holds.
We'll use the same July call for intraday trades today, and recommend holding NO open position over the weekend.
Friday, July 11, 2008
A Different Perspective
On Tuesday the rise in the market was on high volume, and clearly a turnaround opportunity. Yesterday the market moved to Dow bottoms again, on rising oil and analysts predicting doom and gloom for Cisco and Intel.
These are the same analysts that brought us subslime debt, and massive hedge fund loss.
FEAR permeates the market.
Two way trades will still be likely, and we continue to see a healthy topping to the market, before another sell off begins.
Oil is now the catalyst. Many traders have written about "traders controlling pricing." There is right now a very adequate supply of oil. A simpleton would know this, as no gas stations are out of oil, and there is no rationing. Thusly, there is plenty of supply, short term.
This is a classically manipulated trader commodity oil market, on FEAR. But, the facts are even more disturbing:
Check this video to gain a different perspective:
http://pickensplan.com/
With a count of 6 to put it is now likely for more downside before upside, but we believe a recovery is in process.
Calls were tightly profitable yesterday ONLY for traders moving in/out and taking tight profits. Volume on the exchanges was very light, after a very high volume UP day the day before. Chartists would see this as a potential bottoming of the market.
Any trade we recommend and that you make...take tight profits. Do not anticipate anything, as in a market like this it is impossible to anticipate.
These are the same analysts that brought us subslime debt, and massive hedge fund loss.
FEAR permeates the market.
Two way trades will still be likely, and we continue to see a healthy topping to the market, before another sell off begins.
Oil is now the catalyst. Many traders have written about "traders controlling pricing." There is right now a very adequate supply of oil. A simpleton would know this, as no gas stations are out of oil, and there is no rationing. Thusly, there is plenty of supply, short term.
This is a classically manipulated trader commodity oil market, on FEAR. But, the facts are even more disturbing:
Check this video to gain a different perspective:
http://pickensplan.com/
With a count of 6 to put it is now likely for more downside before upside, but we believe a recovery is in process.
Calls were tightly profitable yesterday ONLY for traders moving in/out and taking tight profits. Volume on the exchanges was very light, after a very high volume UP day the day before. Chartists would see this as a potential bottoming of the market.
Any trade we recommend and that you make...take tight profits. Do not anticipate anything, as in a market like this it is impossible to anticipate.
Wednesday, July 9, 2008
Bernanke Babbled - Oil Dropped
Bernanke babbled, oil dropped, and the world is better. It's fun to watch. The market moved to a bottom test again at 11,134, and hit tops of 11,430. Traders reported excellent profits on our pre market recommendation of the July570C, which was available as low as 10.00, selling to highs of 17.00, simply by watching our Dow bottoms and entering on the morning downside.
Puts of course were profitable, but only for traders still holding partials, or able to follow the falling knife.
We believe, barring oil disaster or economic idiocy, that the market may now short term trend to the upside, hitting Dow tops at 11,650 amidst whipsaw struggles to the upside. Nothing is better, our economy is truly in the toliet, and we're watching politicians argue on whether to drill for oil (would take 10 years to see results, and no refineries are even built to process new oil, but it "sounds good"). Nothing has inherently changed with an upsurge, and it's part of why we sold out much of our Blue Chip stock holdings at 14,100 a few months ago, when noone could imagine downside.
Upside could easily be muted, with whipsaw and bottom tests again. We'll lead with a trade to the call, but make clear notice that the market remains high risk.
My goal is to make memories, and to influence people. Many of my rants are designed to stimulate your thinking, and to make you QUESTION facts. Learn YOU. The emotions of the trade are far more important than the technical facts.
From TP on memories:
"I have told people that for years and never have I ever heard anyone say it. Making memories takes understanding that is deep. I was an actor in the west coast renaissance faire for almost 10 years. I learned how to play, something I didn't know until I met people that knew how to play. That's when I decided to coin the phrase "I am just making memories". I think that when I am alone and old maybe I can pull these memories out of my pocket and be nourished with happiness. Its like not having any regrets because no hesitation took place and the lesson was learned.
I see that the lesson you provide around us being able to read the market is the objective, not the money that we will make. Thank you Floyd. The calls were wrong and I have made good money on puts as well over the last 4 trading days. :) I still have more to learn."
From JE on Advanced Mentoring:
"Floyd, thanks. The psychology tests and your in depth in my face analysis of why I choose to fail, and when I choose to succeed, has been hugely advantageous to me. I've gained more personally I think at times than financially, but this year has been incredible. I"m up 38% ytd on OEX trades, trading 3 to 4 times a week, and up over 50% on Blue Chip trades."
Puts of course were profitable, but only for traders still holding partials, or able to follow the falling knife.
We believe, barring oil disaster or economic idiocy, that the market may now short term trend to the upside, hitting Dow tops at 11,650 amidst whipsaw struggles to the upside. Nothing is better, our economy is truly in the toliet, and we're watching politicians argue on whether to drill for oil (would take 10 years to see results, and no refineries are even built to process new oil, but it "sounds good"). Nothing has inherently changed with an upsurge, and it's part of why we sold out much of our Blue Chip stock holdings at 14,100 a few months ago, when noone could imagine downside.
Upside could easily be muted, with whipsaw and bottom tests again. We'll lead with a trade to the call, but make clear notice that the market remains high risk.
My goal is to make memories, and to influence people. Many of my rants are designed to stimulate your thinking, and to make you QUESTION facts. Learn YOU. The emotions of the trade are far more important than the technical facts.
From TP on memories:
"I have told people that for years and never have I ever heard anyone say it. Making memories takes understanding that is deep. I was an actor in the west coast renaissance faire for almost 10 years. I learned how to play, something I didn't know until I met people that knew how to play. That's when I decided to coin the phrase "I am just making memories". I think that when I am alone and old maybe I can pull these memories out of my pocket and be nourished with happiness. Its like not having any regrets because no hesitation took place and the lesson was learned.
I see that the lesson you provide around us being able to read the market is the objective, not the money that we will make. Thank you Floyd. The calls were wrong and I have made good money on puts as well over the last 4 trading days. :) I still have more to learn."
From JE on Advanced Mentoring:
"Floyd, thanks. The psychology tests and your in depth in my face analysis of why I choose to fail, and when I choose to succeed, has been hugely advantageous to me. I've gained more personally I think at times than financially, but this year has been incredible. I"m up 38% ytd on OEX trades, trading 3 to 4 times a week, and up over 50% on Blue Chip trades."
Tuesday, July 8, 2008
My Goal is to Make Memories
My goal in life is to help make memories. After a great week on vacation, and a few lessons to subscribers as I became "frustrated" at "panic," I spent a week ranting to you all as I traveled, and again much part of my goal to "make memories." It is most important to me in life to offer who I am and what I do well to others, and to share. Money is not "real" to me, but simply another instrument we use to play.
As I teach stock and option trading I am really teaching life experiences from a transpersonal psychology base.
What occurred yesterday in the market is an excellent example of FEAR and GREED.
Both of our signals were profitable yesterday. Traders could have bought the July580P, on the opening upside, for as low as 8.40, and sold to highs of 17.20.
Most sold profitably for 25% profit goals.
In turn, traders were able to only tightly profit on the July600C until early afternoon, when astute traders bought at lows again , strong support lines, and took the option back up. The market moved from a 150 point drop to a flat even start within 30 minutes after the 3 p.m. hour, prompting good profits for day traders with iron stomaches.
Here is how the market was "interpreted":
WASHINGTON (MarketWatch) -- The price of petroleum will continue to rise because of ethanol, the weak dollar and political tensions, the oil cartel's president was quoted as saying Sunday.
"The price of oil will rise again in the coming weeks," Chakib Khelil -- the Algerian energy minister and currently president of the Organization of Petroleum Exporting Countries -- said in an interview with an Algerian newspaper. "We have to follow the evolution of the dollar, because a 1% fall in the dollar means $4 more on the price of oil."
Khelil said the weak dollar and geopolitical worries are responsible for 60% of the rise in crude prices, but also said that "the intrusion of bioethanol on the market" was alone responsible for the other 40%.
He didn't explain why more ethanol would drive crude prices higher, but said the dollar's decline was because the Federal Reserve had kept interest rates low.
Khelil repeated his view that a lack of supply is not the problem.
NEW YORK (MarketWatch) -- U.S. stocks turned steeply lower Monday afternoon, sending the S&P 500 into bear market territory, as worries banks would be slammed with more mortgage-related losses overtook earlier optimism sparked by a big drop in the price of crude.
"The advent of earnings season this week has investors on the defensive, especially as the beleaguered financial sector leads off," analysts at Action Economics said in a note. "Big declines in commodities today have also weighed on commodity based shares."
Record Shorting of U.S. Stocks May Fuel Rebound, JPMorgan Says
By Elizabeth Stanton
July 7 (Bloomberg) -- Record bets against U.S. stocks may mean the market is on the verge of a rebound fueled by purchases of shares that were sold short, according to JPMorgan Chase & Co.
So-called short interest on the New York Stock Exchange has risen 55 percent this year to a record 3.6 percent of listed shares, JPMorgan Chief Equity Strategist Thomas J. Lee wrote in a report today. In a short sale, an investor sells borrowed shares in anticipation of being able to buy them back later, or ``cover,'' at a lower price.
Given the ``extreme levels'' of short interest, positive catalysts for the market ``could trigger a substantial short- covering rally,'' New York-based Lee wrote.
The Standard & Poor's 500 Index of large U.S. companies declined 14 percent this year, led by financial and telephone shares. Short-sellers have benefited from crude oil's 49 percent advance to more than $140 a barrel, falling home prices and resulting bank losses on mortgages, and ``wariness'' about second-quarter earnings following three straight quarters of profit declines, Lee wrote.
A record 36 percent of the companies in the S&P 500 have at least 5 percent of their shares sold short, the report said. Eighteen percent have more than 10 percent of their shares shorted.
``The record short interest suggests to us that being a bear is consensus,'' Lee wrote. ``It has not paid to be a contrarian lately, but we wonder how often is consensus right.''
The 55 percent jump in short interest since October exceeds all other gains since 2000, the report said. The six previous increases averaged 28 percent and lasted 11 months, Lee wrote. During those periods, the S&P 500 declined an average of 6 percent.
The benchmark U.S. stock index gained an average of 8 percent in the six periods since 2000 when short interest declined, according to the report. The typical rally to cover bets reduced short interest by 12 percent. A drop in current short interest by that amount would lower the figure by 2.4 billion shares, worth about $70 billion, Lee said.
Oil dropped substantially, but the market did NOT react to the long term positive. As oil dropped, more worried about subslime mortgages rose to the occasion
(Sec. of Treasury Paulsen, a Bushy and Wall Street boy, "Subprime appears to be limited in the longer term reaction, and the majority of write offs have occurred" (Two weeks before the Bear Stearn bailout, earlier this year).
As you analyze "cut gasoline taxes" to help lower the cost of gas, think smartly. As we do little "long term" perhaps it might be time to consider proactive vs. reactive thinking?
We are in a market that is so FEARFUL that GREED cannot yet come into play. We were in a market with SUCH GREED that fear could not come in to play.
As I teach stock and option trading I am really teaching life experiences from a transpersonal psychology base.
What occurred yesterday in the market is an excellent example of FEAR and GREED.
Both of our signals were profitable yesterday. Traders could have bought the July580P, on the opening upside, for as low as 8.40, and sold to highs of 17.20.
Most sold profitably for 25% profit goals.
In turn, traders were able to only tightly profit on the July600C until early afternoon, when astute traders bought at lows again , strong support lines, and took the option back up. The market moved from a 150 point drop to a flat even start within 30 minutes after the 3 p.m. hour, prompting good profits for day traders with iron stomaches.
Here is how the market was "interpreted":
WASHINGTON (MarketWatch) -- The price of petroleum will continue to rise because of ethanol, the weak dollar and political tensions, the oil cartel's president was quoted as saying Sunday.
"The price of oil will rise again in the coming weeks," Chakib Khelil -- the Algerian energy minister and currently president of the Organization of Petroleum Exporting Countries -- said in an interview with an Algerian newspaper. "We have to follow the evolution of the dollar, because a 1% fall in the dollar means $4 more on the price of oil."
Khelil said the weak dollar and geopolitical worries are responsible for 60% of the rise in crude prices, but also said that "the intrusion of bioethanol on the market" was alone responsible for the other 40%.
He didn't explain why more ethanol would drive crude prices higher, but said the dollar's decline was because the Federal Reserve had kept interest rates low.
Khelil repeated his view that a lack of supply is not the problem.
NEW YORK (MarketWatch) -- U.S. stocks turned steeply lower Monday afternoon, sending the S&P 500 into bear market territory, as worries banks would be slammed with more mortgage-related losses overtook earlier optimism sparked by a big drop in the price of crude.
"The advent of earnings season this week has investors on the defensive, especially as the beleaguered financial sector leads off," analysts at Action Economics said in a note. "Big declines in commodities today have also weighed on commodity based shares."
Record Shorting of U.S. Stocks May Fuel Rebound, JPMorgan Says
By Elizabeth Stanton
July 7 (Bloomberg) -- Record bets against U.S. stocks may mean the market is on the verge of a rebound fueled by purchases of shares that were sold short, according to JPMorgan Chase & Co.
So-called short interest on the New York Stock Exchange has risen 55 percent this year to a record 3.6 percent of listed shares, JPMorgan Chief Equity Strategist Thomas J. Lee wrote in a report today. In a short sale, an investor sells borrowed shares in anticipation of being able to buy them back later, or ``cover,'' at a lower price.
Given the ``extreme levels'' of short interest, positive catalysts for the market ``could trigger a substantial short- covering rally,'' New York-based Lee wrote.
The Standard & Poor's 500 Index of large U.S. companies declined 14 percent this year, led by financial and telephone shares. Short-sellers have benefited from crude oil's 49 percent advance to more than $140 a barrel, falling home prices and resulting bank losses on mortgages, and ``wariness'' about second-quarter earnings following three straight quarters of profit declines, Lee wrote.
A record 36 percent of the companies in the S&P 500 have at least 5 percent of their shares sold short, the report said. Eighteen percent have more than 10 percent of their shares shorted.
``The record short interest suggests to us that being a bear is consensus,'' Lee wrote. ``It has not paid to be a contrarian lately, but we wonder how often is consensus right.''
The 55 percent jump in short interest since October exceeds all other gains since 2000, the report said. The six previous increases averaged 28 percent and lasted 11 months, Lee wrote. During those periods, the S&P 500 declined an average of 6 percent.
The benchmark U.S. stock index gained an average of 8 percent in the six periods since 2000 when short interest declined, according to the report. The typical rally to cover bets reduced short interest by 12 percent. A drop in current short interest by that amount would lower the figure by 2.4 billion shares, worth about $70 billion, Lee said.
Oil dropped substantially, but the market did NOT react to the long term positive. As oil dropped, more worried about subslime mortgages rose to the occasion
(Sec. of Treasury Paulsen, a Bushy and Wall Street boy, "Subprime appears to be limited in the longer term reaction, and the majority of write offs have occurred" (Two weeks before the Bear Stearn bailout, earlier this year).
As you analyze "cut gasoline taxes" to help lower the cost of gas, think smartly. As we do little "long term" perhaps it might be time to consider proactive vs. reactive thinking?
We are in a market that is so FEARFUL that GREED cannot yet come into play. We were in a market with SUCH GREED that fear could not come in to play.
Monday, July 7, 2008
This Says it All
This says it all:
-Benchmark Japanese index's losing streak the longest in 54 years
-"It is not clear, and by definition not yet a reality, that a recession has occurred. Stimulus and tax cuts have successfully controlled what is a vibrant U.S. economy simply affected by rising oil prices"-George W. Bush, May 17th, 2008
We have moved far beyond a normal 21 day cycle on the Dow, and the losses continue solely around FEAR and GREED in oil. Floyd is back from a well rested week of travel through the Midwest, and most important to our opening dialogue this week is a comment on "my anger" during our first losses in months, and how only a few subscribers reacted.
Quite candidly, few were upset, but Floyd used the pulpit to swing some hard balls at traders that over allocate on moves only to lose their butts and wonder why, or traders that choose to learn only a few of the rules.
"Floyd, nice week we had. I played puts 4 times and calls 3 times, and profited 20% average on each trade. 7 trades, 7 successes. Tell your subscribers that I lost on 2 of the 3 calls you recommended before, and just paid it all back plus more in last weeks trading. I've learned from you how to allocate, and when to "cut bait". I'm one of your subscribers up 35% for the year, trading everyday, and that is making a living trading off the OEX. "- Mary G, Omaha
"Interesting week. Hit profits on the puts each day, and whipsawed up with the calls twice. Net profits-$3500. Simply watched the pivot and s1 and r1, and followed your Dow projections. I am surprised oil is such a catalyst, when it was not just three weeks before, but the speculators are trying to build it to $150, I guess"-LMD
It is important to note that the "count" we use is also extremely low to bias. Our Dow projections are harder to formulate and "read" and the "count" itself, even though we "see" a great deal of downside has never yet had a put count of over 5 in the past 10 market days, simply because whipsaw as had the market struggling within a large trade range from 10,150 to 10,460, almost daily.
Puts have the obvious bias, BUT, the count is only 1 to the put, and we believe any day that oil can show a substantial drop will trigger upside short term euphoria.
Both puts and calls were tightly profitable again on Friday, allowing below prior day close buys and .50 to 1.00 per contract profits.
-Benchmark Japanese index's losing streak the longest in 54 years
-"It is not clear, and by definition not yet a reality, that a recession has occurred. Stimulus and tax cuts have successfully controlled what is a vibrant U.S. economy simply affected by rising oil prices"-George W. Bush, May 17th, 2008
We have moved far beyond a normal 21 day cycle on the Dow, and the losses continue solely around FEAR and GREED in oil. Floyd is back from a well rested week of travel through the Midwest, and most important to our opening dialogue this week is a comment on "my anger" during our first losses in months, and how only a few subscribers reacted.
Quite candidly, few were upset, but Floyd used the pulpit to swing some hard balls at traders that over allocate on moves only to lose their butts and wonder why, or traders that choose to learn only a few of the rules.
"Floyd, nice week we had. I played puts 4 times and calls 3 times, and profited 20% average on each trade. 7 trades, 7 successes. Tell your subscribers that I lost on 2 of the 3 calls you recommended before, and just paid it all back plus more in last weeks trading. I've learned from you how to allocate, and when to "cut bait". I'm one of your subscribers up 35% for the year, trading everyday, and that is making a living trading off the OEX. "- Mary G, Omaha
"Interesting week. Hit profits on the puts each day, and whipsawed up with the calls twice. Net profits-$3500. Simply watched the pivot and s1 and r1, and followed your Dow projections. I am surprised oil is such a catalyst, when it was not just three weeks before, but the speculators are trying to build it to $150, I guess"-LMD
It is important to note that the "count" we use is also extremely low to bias. Our Dow projections are harder to formulate and "read" and the "count" itself, even though we "see" a great deal of downside has never yet had a put count of over 5 in the past 10 market days, simply because whipsaw as had the market struggling within a large trade range from 10,150 to 10,460, almost daily.
Puts have the obvious bias, BUT, the count is only 1 to the put, and we believe any day that oil can show a substantial drop will trigger upside short term euphoria.
Both puts and calls were tightly profitable again on Friday, allowing below prior day close buys and .50 to 1.00 per contract profits.
Thursday, July 3, 2008
From Our Subscribers
From our subscribers:
1. I must say, tonight's alert was quite the judgmental rant. I know we have
quite a few issues here at home however....
Floyd-Sincere apologies to all when I go "too far". My goal is to provide fervor and catalyst, and to get us to "think". Often in this country we believe news bites and forget the obvious. We take few consequences for our actions well. I do not mean to judge, only to provide stimuli.
2. Hey Floyd,
You have no idea how much I love your commentaries. My wife and I read your vacation plastic scenario together and she just smiled because she has listened to me complaining about the exact same things as well!
Beside our faith and political affiliation...you are I are on the exact same wavelength. I look forward with great anticipation to reading your alerts...just the education alone is worth the subscription.
I just wanted to remind you that I am learning so much through your service and I appreciate our relationship.
6 more weeks of paper trading to go and I am becoming more and more confident! I love your system.
Have a great day tomorrow with your lovely bride!
Where are you guys headed?
God Bless you brother...safe travels!
Floyd-The more we know how we act the more we can act as if we know. When we as a nation ignore our own issues while judging others, and attempting to change them, we make frightening errors. For example the recent Supreme Court decision on the right to bear arms is less important than the rights to health insurance that are denied a large percentage of our own populace.
3. Floyd,
I have been doing much reading (as always) and I came across this. I learn as much as I can about everything that I can and I found this stuff as I was searching solstice cycles and their relationship to time. Absolutely fascinating. Anyhow, this was extremely captivating as well and from what I was able to read on the review, struck home in so many ways with me, this guy could be me, or I could be him, he is much more eloquent then I have ever been though. It also totally reminded me of you regarding political, planetary, resource, religious, commentary in your alerts. Check it out... If I assumed wrong by thinking of you as I read this, I apologize in advance. At the very least learn another's perspective of our world with the passion that we have for ours.
Dave
Author: Derrick Jensen
Book Title: endgame vol I and II
Some clips from a review of the books:
.
Derrick Jensen speaks much as he writes: eloquently, haltingly, off-the-cuff; his insights and remarks are brilliant, provocative, profound, disturbing, irreverent, politically incorrect -- no matter what your politics are. While politics in the conventional sense is the game of power and its subsidiary ethics, here we have a more radical approach to living in the world than accepting the myopia of the urban lifestyle; now nature is reintroduced to the equation.
Nature (including plant and animal species, ecosystems of land, water and air, and traditional subsistence peoples) is no stranger to the inequation of power, suffering these 60 or 100 centuries of abuse, rape, plunder and blunder, burning, rending, killing, enslaving, forgetting. Now up for discussion, for once, is the Endgame, as Derrick calls his latest two-volume study of what is involved in the necessary dominance and even more necessary demise of civilization.
Civilization is characterized by cities, which require (DJ’s emphasis) for its people the importation of food and related resources . . . and therefore it requires the coerced or forcible removal of those necessities from the hinterland, the colonies, the rural poor, the wilderness, the stolen land. The end of the game comes with the end of denial.
The hardest step in the recovery program is the first step, which is to awake from denial. So important and so immense, in fact, is this first step, that the entire two volumes of Endgame (I: The Problem of Civilization; II: Resistance) are devoted to it, as was the entire address tonight. A single questioner after the talk inquired about the kind of society that might replace the one that has brought itself and everything else along with it to the brink of universal ruination; but Derrek begged off that question, as he had the earlier one, “What can we do?”
“Your actions will come with the gifts you have to bring,” was his answer (and here we find a refreshingly Emersonian version of democracy, to oppose to the current Orwellian distortions of that noble principle). In the meantime the more pressing matter -- “the axe held over the head” -- must be addressed, immediately, and it will take every ounce of our attention. The only way we can give it our proper attention is to recognize the extent of the emergency.
That we actually have an emergency situation on our hands is a logical if not always visible fact of a lifestyle based on nonrenewable or overzealously harvested resources. But we can only continue to be lulled for so long by belief in the romantic dream and hope of civilization-forever-after, as most of the dying is still hidden (except when 80% of those in the audience raise their hands at the question “How many of you have lost a loved one to cancer?”), and everything keeps whistling away (though at a higher and higher pitch of anxiety and tension), toward the edge of the cliff, with noses lifted high in the air (as if to hide with pride the stench of extinction and genocide) .
Or we do know better, but we pleasantly forget (tonight, after all, was game 6 of the baseball playoffs . . . “Maybe the Indians will win this time,” quipped Derrick). Or we should know better, but we take action believing our citizen-ship enterprise can be salvaged, and so we continue to vote, and to buy, steal or pray for our clean water and nutritious food from elsewhere without ever giving anything back, not in humble sacrifice of sacred respect or stewardship, nor truly fair price and trade to those in a distant land. Come to think of it, what would a truly fair price be, in the whole ecological scheme of things? The answer could well be, as Derrick Jensen suggests, no price at all -- but rather our sacrifice of such power, in favor of the power of our willingness to listen to our local landbase and its native peoples for instructions on how to survive.
A decade ago I wrote a review of some similarly end-of-history overviews, with one notable programme (The Millennium Project) recognizing on the one hand the same impossibility of continuing on the present path of overconsumption, while refusing to “go backward” to an uncivilized state of nature. The solution instead was foreseen in deep space, where humans could continue their divine mission to “go forth and multiply” indeed forever, through the infinity of space with its endless “resources” for the taking. This fantasy is moot by now as the window has already passed for such a project to be launched from an overabused earth (as the author warned at the time of its writing a decade ago). Without that vain hope to sustain us; and likewise without the Maoist vision of a populist agrarian utopia; and likewise without the neo-liberal dream of universal democracy (now blown to tatters by its neo-conservative evil twin embarked on an openly fascist imperial agenda); and likewise without the green delusions of happy hippy ecotopias recycling bicycle tires to the end of time; we are left with the one course that is both natural and humane. That final remedy is the bitterest pill to swallow; but unlike the “final solution” of the holocaust, it is the path of finding a hard yet possible future by making the hardest choices now.
It is a hard and bitter path because we have been so utterly convinced that it is the wrong one, the one to leave behind, the one to eradicate and transform and evolve from; and we have grown so utterly dependent on our short-lived alternative, so beguiling with its comfort and ease and excess, so intoxicating with its riches transferred to us from the other side: the invisible earth, the silent victims, the dispossessed. Of course we don’t want to slide back to the Stone Age. We will go kicking and screaming backwards, or kicking and screaming forwards -- sacrificing our comfort, or others’ lives and livelihoods, in the process -- but go we will, to the unpromised land, the land finally free of unsustainable promises. Today or tomorrow, one way or another, by our action or inaction, we will go out of our false and manufactured Eden, into the wilderness; we will find our way home.
The Link to this Blog where this can be read in its entirty: http://www.alternativeculture.com/blog/2007/10/beyond-politics.html
1. I must say, tonight's alert was quite the judgmental rant. I know we have
quite a few issues here at home however....
Floyd-Sincere apologies to all when I go "too far". My goal is to provide fervor and catalyst, and to get us to "think". Often in this country we believe news bites and forget the obvious. We take few consequences for our actions well. I do not mean to judge, only to provide stimuli.
2. Hey Floyd,
You have no idea how much I love your commentaries. My wife and I read your vacation plastic scenario together and she just smiled because she has listened to me complaining about the exact same things as well!
Beside our faith and political affiliation...you are I are on the exact same wavelength. I look forward with great anticipation to reading your alerts...just the education alone is worth the subscription.
I just wanted to remind you that I am learning so much through your service and I appreciate our relationship.
6 more weeks of paper trading to go and I am becoming more and more confident! I love your system.
Have a great day tomorrow with your lovely bride!
Where are you guys headed?
God Bless you brother...safe travels!
Floyd-The more we know how we act the more we can act as if we know. When we as a nation ignore our own issues while judging others, and attempting to change them, we make frightening errors. For example the recent Supreme Court decision on the right to bear arms is less important than the rights to health insurance that are denied a large percentage of our own populace.
3. Floyd,
I have been doing much reading (as always) and I came across this. I learn as much as I can about everything that I can and I found this stuff as I was searching solstice cycles and their relationship to time. Absolutely fascinating. Anyhow, this was extremely captivating as well and from what I was able to read on the review, struck home in so many ways with me, this guy could be me, or I could be him, he is much more eloquent then I have ever been though. It also totally reminded me of you regarding political, planetary, resource, religious, commentary in your alerts. Check it out... If I assumed wrong by thinking of you as I read this, I apologize in advance. At the very least learn another's perspective of our world with the passion that we have for ours.
Dave
Author: Derrick Jensen
Book Title: endgame vol I and II
Some clips from a review of the books:
.
Derrick Jensen speaks much as he writes: eloquently, haltingly, off-the-cuff; his insights and remarks are brilliant, provocative, profound, disturbing, irreverent, politically incorrect -- no matter what your politics are. While politics in the conventional sense is the game of power and its subsidiary ethics, here we have a more radical approach to living in the world than accepting the myopia of the urban lifestyle; now nature is reintroduced to the equation.
Nature (including plant and animal species, ecosystems of land, water and air, and traditional subsistence peoples) is no stranger to the inequation of power, suffering these 60 or 100 centuries of abuse, rape, plunder and blunder, burning, rending, killing, enslaving, forgetting. Now up for discussion, for once, is the Endgame, as Derrick calls his latest two-volume study of what is involved in the necessary dominance and even more necessary demise of civilization.
Civilization is characterized by cities, which require (DJ’s emphasis) for its people the importation of food and related resources . . . and therefore it requires the coerced or forcible removal of those necessities from the hinterland, the colonies, the rural poor, the wilderness, the stolen land. The end of the game comes with the end of denial.
The hardest step in the recovery program is the first step, which is to awake from denial. So important and so immense, in fact, is this first step, that the entire two volumes of Endgame (I: The Problem of Civilization; II: Resistance) are devoted to it, as was the entire address tonight. A single questioner after the talk inquired about the kind of society that might replace the one that has brought itself and everything else along with it to the brink of universal ruination; but Derrek begged off that question, as he had the earlier one, “What can we do?”
“Your actions will come with the gifts you have to bring,” was his answer (and here we find a refreshingly Emersonian version of democracy, to oppose to the current Orwellian distortions of that noble principle). In the meantime the more pressing matter -- “the axe held over the head” -- must be addressed, immediately, and it will take every ounce of our attention. The only way we can give it our proper attention is to recognize the extent of the emergency.
That we actually have an emergency situation on our hands is a logical if not always visible fact of a lifestyle based on nonrenewable or overzealously harvested resources. But we can only continue to be lulled for so long by belief in the romantic dream and hope of civilization-forever-after, as most of the dying is still hidden (except when 80% of those in the audience raise their hands at the question “How many of you have lost a loved one to cancer?”), and everything keeps whistling away (though at a higher and higher pitch of anxiety and tension), toward the edge of the cliff, with noses lifted high in the air (as if to hide with pride the stench of extinction and genocide) .
Or we do know better, but we pleasantly forget (tonight, after all, was game 6 of the baseball playoffs . . . “Maybe the Indians will win this time,” quipped Derrick). Or we should know better, but we take action believing our citizen-ship enterprise can be salvaged, and so we continue to vote, and to buy, steal or pray for our clean water and nutritious food from elsewhere without ever giving anything back, not in humble sacrifice of sacred respect or stewardship, nor truly fair price and trade to those in a distant land. Come to think of it, what would a truly fair price be, in the whole ecological scheme of things? The answer could well be, as Derrick Jensen suggests, no price at all -- but rather our sacrifice of such power, in favor of the power of our willingness to listen to our local landbase and its native peoples for instructions on how to survive.
A decade ago I wrote a review of some similarly end-of-history overviews, with one notable programme (The Millennium Project) recognizing on the one hand the same impossibility of continuing on the present path of overconsumption, while refusing to “go backward” to an uncivilized state of nature. The solution instead was foreseen in deep space, where humans could continue their divine mission to “go forth and multiply” indeed forever, through the infinity of space with its endless “resources” for the taking. This fantasy is moot by now as the window has already passed for such a project to be launched from an overabused earth (as the author warned at the time of its writing a decade ago). Without that vain hope to sustain us; and likewise without the Maoist vision of a populist agrarian utopia; and likewise without the neo-liberal dream of universal democracy (now blown to tatters by its neo-conservative evil twin embarked on an openly fascist imperial agenda); and likewise without the green delusions of happy hippy ecotopias recycling bicycle tires to the end of time; we are left with the one course that is both natural and humane. That final remedy is the bitterest pill to swallow; but unlike the “final solution” of the holocaust, it is the path of finding a hard yet possible future by making the hardest choices now.
It is a hard and bitter path because we have been so utterly convinced that it is the wrong one, the one to leave behind, the one to eradicate and transform and evolve from; and we have grown so utterly dependent on our short-lived alternative, so beguiling with its comfort and ease and excess, so intoxicating with its riches transferred to us from the other side: the invisible earth, the silent victims, the dispossessed. Of course we don’t want to slide back to the Stone Age. We will go kicking and screaming backwards, or kicking and screaming forwards -- sacrificing our comfort, or others’ lives and livelihoods, in the process -- but go we will, to the unpromised land, the land finally free of unsustainable promises. Today or tomorrow, one way or another, by our action or inaction, we will go out of our false and manufactured Eden, into the wilderness; we will find our way home.
The Link to this Blog where this can be read in its entirty: http://www.alternativeculture.com/blog/2007/10/beyond-politics.html
Wednesday, July 2, 2008
A Semi Full of Hostess Twinkies
From a subscriber, that says it all:
"I wasn't sure who to send this email since Floyd is on vacation. I think I got into this service at the wrong time.I know Floyd and you are really concerned about the traders and I have read the testimonies.I too got into the call for the July 600c just when it tanked.I don't blame anyone for this.I just am not 100% comfortable spending the full subscription fee yet. My trial ends I think tomorrow.I am at the point I don't want to stop, but I am not 100% comfortable yet.I do have a small account and the
-3000 loss has taken a lot out of it.I am hoping that the market turns before July expiration date and I can recover the loss.Is it possible to extend the trial period another week to see if the market turns around? I still would like to get Floyd's comments on the 600C."
Floyd's response-We will be honored to extend this subscription. What should be learned here:
1. Why would one join a service and trade immediately? Paper trade and practice with us...study.
2. Holding beyond 7/3 (see comment on July expiry) means the trader has not even truly yet studied our manual. It also means the customer here has not fully understood how we trade, and the risk to trading.
3. To have a $3000 loss shows an over commitment to a trade for the first time trader, now "counting" on a trade to do well.
Puts and calls were both profitable for traders on 7/1. Whipsaw occurred in morning trade with 100 point swings bi-directionally. It took astute traders to buy watching futures, and trade calls on the first downswing, and puts on the first upswing. Some traders reported profits 3 times on put, call, put by 1.30 p.m..
The market hit highs of 11,448 and lows of 11,143 in yesterday's trading, allowing the July540P to hit highs of 2.75, and the July600C highs of 4.20. Both put and call were profitable signals yesterday.
Both of these signals remain the lowest risk OTM issues to trade whipsaw that is occurring as the market tries to find himself.
Floyd is on vacation this week and in my travels have met a great number of Americans. As I am "on the road" I"m stopping at gas stations, Mom and Pop diners, and small towns. Most Americans, I believe, don't get it. Perhaps should not even be allowed to vote:) I am seeing 4th of July fireworks displays and great Patriotism comments in hats and T-shirts, but the average Joe buying bottled water, driving SUV's, 50 pounds overweight, and believing "might is power." Very simplistic thinking. These may be the folks that want to drill for oil in the U.S., and open up our strategic oil reserves, as gas for our cars is now high priced.
What says it best may be this: A full semi driving down the road carrying a full load of Hostess Twinkies.
Think of this:
1. A semi using diesel driving state highways carrying a product that has NO food value, and is bad for you and wrapped in plastic. A product that makes you fat.
And we are ready to drill our shores for oil. Perhaps we can waddle to our graves while we bring democracy to the Middle East.
2. My anger here comes from Hampton Inn, the great "value" hotel Hilton chain, where my wife and I stayed a night on our travels. Breakfast is "free" here. There is no food of value, it's all donuts, rolls, microwave waffles, etc, but the value is in FREE, and the place is jammed. Not one product availalbe in the dining room is available in any format but plastic and paper...all food stuffs are served with plastic forks, styroform plates, plastic creamers, butter in tiny little plastic containers.....oil used in every product, all packaged in tiny containers, and thrown away in plastic liners.
And our overweight populace standing in buffet lines for the "free" food, thinking they are "saving money."
This is why oil speculators are leading the market. The manipulation that is occurring around oil prices makes me smile, as there is plenty of supply. It's classic free market manipulation at work and we are driving our own prices up. But, I'll bet many of our population will blame the gas stations for the high price, or the oil companies for record profits, when WE are the reason for the high prices, and we fuel the speculation. Hummers are pretend toys for us, to show our "support of the war", and "pretend soldiers" and SUV's in Florida should be enough to make you smile. 4 wheel drive to the ocean on the flat terrain :)
With yesterday's moves we are now officially in a Bear Market. June was the worst month in the market since the Great Depression. Stocks are off 2.1 trillion this year. The banking sector is in shockwaves from GREED, and lack of controls, and from our government promoting and supporting bad financial moves. Our debt has soared to new highs, our infrastructures are decaying, and our populace is most concerned about "increasing taxes," not even understanding the core issues that have created the economic turmoil we are in.
Hybrid sales for automobiles the Bush Admin has DECREASED tax incentives for purchase in the past 8 years, while allowing tax incentives to buy Hummers. I repeat this often to help show us that there has been clear and manipulated intent here to benefit the few. Halliburton, the no bid company for Iraq of which Cheney was the former CEO, has used their record profits to move their main offices to Dubai.
As we watch bottoms and endless speculation now about the market itself recognize that the rising price of gas has nothing to do with the reality of what the rising price of oil will really do to the U.S.
"I wasn't sure who to send this email since Floyd is on vacation. I think I got into this service at the wrong time.I know Floyd and you are really concerned about the traders and I have read the testimonies.I too got into the call for the July 600c just when it tanked.I don't blame anyone for this.I just am not 100% comfortable spending the full subscription fee yet. My trial ends I think tomorrow.I am at the point I don't want to stop, but I am not 100% comfortable yet.I do have a small account and the
-3000 loss has taken a lot out of it.I am hoping that the market turns before July expiration date and I can recover the loss.Is it possible to extend the trial period another week to see if the market turns around? I still would like to get Floyd's comments on the 600C."
Floyd's response-We will be honored to extend this subscription. What should be learned here:
1. Why would one join a service and trade immediately? Paper trade and practice with us...study.
2. Holding beyond 7/3 (see comment on July expiry) means the trader has not even truly yet studied our manual. It also means the customer here has not fully understood how we trade, and the risk to trading.
3. To have a $3000 loss shows an over commitment to a trade for the first time trader, now "counting" on a trade to do well.
Puts and calls were both profitable for traders on 7/1. Whipsaw occurred in morning trade with 100 point swings bi-directionally. It took astute traders to buy watching futures, and trade calls on the first downswing, and puts on the first upswing. Some traders reported profits 3 times on put, call, put by 1.30 p.m..
The market hit highs of 11,448 and lows of 11,143 in yesterday's trading, allowing the July540P to hit highs of 2.75, and the July600C highs of 4.20. Both put and call were profitable signals yesterday.
Both of these signals remain the lowest risk OTM issues to trade whipsaw that is occurring as the market tries to find himself.
Floyd is on vacation this week and in my travels have met a great number of Americans. As I am "on the road" I"m stopping at gas stations, Mom and Pop diners, and small towns. Most Americans, I believe, don't get it. Perhaps should not even be allowed to vote:) I am seeing 4th of July fireworks displays and great Patriotism comments in hats and T-shirts, but the average Joe buying bottled water, driving SUV's, 50 pounds overweight, and believing "might is power." Very simplistic thinking. These may be the folks that want to drill for oil in the U.S., and open up our strategic oil reserves, as gas for our cars is now high priced.
What says it best may be this: A full semi driving down the road carrying a full load of Hostess Twinkies.
Think of this:
1. A semi using diesel driving state highways carrying a product that has NO food value, and is bad for you and wrapped in plastic. A product that makes you fat.
And we are ready to drill our shores for oil. Perhaps we can waddle to our graves while we bring democracy to the Middle East.
2. My anger here comes from Hampton Inn, the great "value" hotel Hilton chain, where my wife and I stayed a night on our travels. Breakfast is "free" here. There is no food of value, it's all donuts, rolls, microwave waffles, etc, but the value is in FREE, and the place is jammed. Not one product availalbe in the dining room is available in any format but plastic and paper...all food stuffs are served with plastic forks, styroform plates, plastic creamers, butter in tiny little plastic containers.....oil used in every product, all packaged in tiny containers, and thrown away in plastic liners.
And our overweight populace standing in buffet lines for the "free" food, thinking they are "saving money."
This is why oil speculators are leading the market. The manipulation that is occurring around oil prices makes me smile, as there is plenty of supply. It's classic free market manipulation at work and we are driving our own prices up. But, I'll bet many of our population will blame the gas stations for the high price, or the oil companies for record profits, when WE are the reason for the high prices, and we fuel the speculation. Hummers are pretend toys for us, to show our "support of the war", and "pretend soldiers" and SUV's in Florida should be enough to make you smile. 4 wheel drive to the ocean on the flat terrain :)
With yesterday's moves we are now officially in a Bear Market. June was the worst month in the market since the Great Depression. Stocks are off 2.1 trillion this year. The banking sector is in shockwaves from GREED, and lack of controls, and from our government promoting and supporting bad financial moves. Our debt has soared to new highs, our infrastructures are decaying, and our populace is most concerned about "increasing taxes," not even understanding the core issues that have created the economic turmoil we are in.
Hybrid sales for automobiles the Bush Admin has DECREASED tax incentives for purchase in the past 8 years, while allowing tax incentives to buy Hummers. I repeat this often to help show us that there has been clear and manipulated intent here to benefit the few. Halliburton, the no bid company for Iraq of which Cheney was the former CEO, has used their record profits to move their main offices to Dubai.
As we watch bottoms and endless speculation now about the market itself recognize that the rising price of gas has nothing to do with the reality of what the rising price of oil will really do to the U.S.
Tuesday, July 1, 2008
The Market is Always Led by Catalysts
Oil still has nothing to do with the market. The market is always led by catalysts, whether it be the FOMC, oil, or unemployment.
It is now high priced oil, fed by option traders that lead the price, and the never-ending bad news on banks that triggers the downside.
When downside or upside occurs FEAR or GREED then take over the market.
News are just triggers. Cycles are cycles. News or events trigger the cycles.
From a subscriber:
So here I am, completely new to trading (about 4-5 months), and completely confused about what the heck is going on!! ! month ago we were flying high in the mid to upper 12,000's and now people are discussing when we are going to fall into the 10,000's again! I understand that you cannot predict what the market is going to do. I understand that you are teaching us how to develop an edge to trade the market and obtain quick, 20-40% profits. I love your system and I believe in your system. The one thing I am having trouble getting is your DOW projections, the 21 day cycle and how or what affects the market.
I was at the Library with my girls and I found this book, called Pick Winning stocks by J.K Lasser. In the book he speaks about the following:
* That the stock market has become a victim if overselling by market insiders whose primary goal is to drive up prices well beyond their actual worth. Saying that the market has become an overvaluation pyramid-type scheme where the insiders profit the most when the market is overvalued the most. Is our market overvalued right now?
* He mentions a very secretive group known as the Working Group on Financial Markets, made up of investment industry and government people, who would be in just the right position to rescue the market whenever it is poised to retreat or substantially collapse...also knows as The "Plunge Protection Team." Basically indicating that the market is manipulated by people both on the way up and on the way down.
* He mentions our credit crisis, our over-spending, and our lack of savings as a country. This formula only leads to complete financial ruin...which is where our country is headed...in the not-so-distant future (how much time do you think?).
Floyd-This is the stuff I write of each week, and he sounds like me. The PPT is a well known group, many traders believe they exist.
I believe right now it is Bush and team trying to hold the market up for the Republicans to have a chance to win in November.
The market is always manipulated. Everything he says is true, but it's been going on for years. We deserve all that is happening to us, but it's likely that the market will turn up when least expected, as the recent downturn has gone on too long. If this is unable to be "held", however, we will simply enter a recessionary longer term period, and puts will lead our recommendations. Much depends upon this week and next.
Even in a recessionary period there will be exhaustive gaps up. There always are.
The bottom line is that he is basically saying, "All is not as it appears!" And that we are in serious trouble. Which echoes what you teach as well. I guess the major questions I have are the following:
1. What really controls the market?
Institutional traders.
2. Do you even know who are the powers that be and what dictates their decisions?
Fear and greed. It is not a conspiracy, but simply market manipulators. It is critical traders do not begin believing that conspirators control the market. This is much like saying that Bush planned 9/11. Many believe this, and it's hogwash. It's simply normal events taking over, and now the USD and price of oil that couple with subprime losses that never seem to stop being exposed.
3. One month ago you were certain that we were staying in the 12,000's. Now we are heading towards the 10,000's. Looking back, was there something you may have overlooked? Is there something we can watch out for in the future to help us recognize in advance what is going to occur? Did the point and figure charting indicate a potential drop of this magnitude?
No, this is much like in January when the drop became precipitious on news, and triggered back. The difference now is that oil is building it's own bubble. All bubbles burst. Two years ago no one could see housing and interest rates as a bubble, and it's now obvious. Oil may not burst for some time, but something will burst. Shorts may soon lose if the market rebounds just as longs are losing now.
Let me tell you Floyd...I am with you and your system all the way. I'm just completely baffled that we had a drop of this magnitude over the course of a month and could not see it coming. I was wondering if we can do something to prepare for the next one (or potential bull run).
Typically, no. I sold out all our BCO stocks at 14,100, predicting a longer term downtrend, and was right. I missed this last leg down, over a two week period. I"ll miss things like this again. The end of the world is not near, and the market will not collapse.
3 to 6 month projections are not possible at any point in time for option trading, but are for stocks. We entered Gold and Silver and TIPS in BCO about a year ago, and are doing great. We sold short puts on banking 6 months ago and hit it right.
Bernanke followed Bushy on the USD (which is how oil is valued) and it's now caught up with us. Greenspan led this years ago with his "easy money." We are now caught up in what was done before.
If McCain is elected we will have a worldwide depression, as he will change nothing and the dollar will fall more, as oil is controlled by floor traders. McCain is a supply side economics politician, ready to stay in Iraq for 100 years. Someone has to pay for this. We are paying for it now. Communist China holds our debts.
Today's moves, which we detail within our Dow projections and open signals, DID allow profits for both of our recommendations, but profit taking must be fast and tight, as the market moved bi-directionally twice around 580. We need 100 points of upside that holds to show any changes to the market that can show a shift to bias.
Oil at 142.00 did not trigger more negative downside, an interesting note in a market that has had catalyst and trigger.
It is now high priced oil, fed by option traders that lead the price, and the never-ending bad news on banks that triggers the downside.
When downside or upside occurs FEAR or GREED then take over the market.
News are just triggers. Cycles are cycles. News or events trigger the cycles.
From a subscriber:
So here I am, completely new to trading (about 4-5 months), and completely confused about what the heck is going on!! ! month ago we were flying high in the mid to upper 12,000's and now people are discussing when we are going to fall into the 10,000's again! I understand that you cannot predict what the market is going to do. I understand that you are teaching us how to develop an edge to trade the market and obtain quick, 20-40% profits. I love your system and I believe in your system. The one thing I am having trouble getting is your DOW projections, the 21 day cycle and how or what affects the market.
I was at the Library with my girls and I found this book, called Pick Winning stocks by J.K Lasser. In the book he speaks about the following:
* That the stock market has become a victim if overselling by market insiders whose primary goal is to drive up prices well beyond their actual worth. Saying that the market has become an overvaluation pyramid-type scheme where the insiders profit the most when the market is overvalued the most. Is our market overvalued right now?
* He mentions a very secretive group known as the Working Group on Financial Markets, made up of investment industry and government people, who would be in just the right position to rescue the market whenever it is poised to retreat or substantially collapse...also knows as The "Plunge Protection Team." Basically indicating that the market is manipulated by people both on the way up and on the way down.
* He mentions our credit crisis, our over-spending, and our lack of savings as a country. This formula only leads to complete financial ruin...which is where our country is headed...in the not-so-distant future (how much time do you think?).
Floyd-This is the stuff I write of each week, and he sounds like me. The PPT is a well known group, many traders believe they exist.
I believe right now it is Bush and team trying to hold the market up for the Republicans to have a chance to win in November.
The market is always manipulated. Everything he says is true, but it's been going on for years. We deserve all that is happening to us, but it's likely that the market will turn up when least expected, as the recent downturn has gone on too long. If this is unable to be "held", however, we will simply enter a recessionary longer term period, and puts will lead our recommendations. Much depends upon this week and next.
Even in a recessionary period there will be exhaustive gaps up. There always are.
The bottom line is that he is basically saying, "All is not as it appears!" And that we are in serious trouble. Which echoes what you teach as well. I guess the major questions I have are the following:
1. What really controls the market?
Institutional traders.
2. Do you even know who are the powers that be and what dictates their decisions?
Fear and greed. It is not a conspiracy, but simply market manipulators. It is critical traders do not begin believing that conspirators control the market. This is much like saying that Bush planned 9/11. Many believe this, and it's hogwash. It's simply normal events taking over, and now the USD and price of oil that couple with subprime losses that never seem to stop being exposed.
3. One month ago you were certain that we were staying in the 12,000's. Now we are heading towards the 10,000's. Looking back, was there something you may have overlooked? Is there something we can watch out for in the future to help us recognize in advance what is going to occur? Did the point and figure charting indicate a potential drop of this magnitude?
No, this is much like in January when the drop became precipitious on news, and triggered back. The difference now is that oil is building it's own bubble. All bubbles burst. Two years ago no one could see housing and interest rates as a bubble, and it's now obvious. Oil may not burst for some time, but something will burst. Shorts may soon lose if the market rebounds just as longs are losing now.
Let me tell you Floyd...I am with you and your system all the way. I'm just completely baffled that we had a drop of this magnitude over the course of a month and could not see it coming. I was wondering if we can do something to prepare for the next one (or potential bull run).
Typically, no. I sold out all our BCO stocks at 14,100, predicting a longer term downtrend, and was right. I missed this last leg down, over a two week period. I"ll miss things like this again. The end of the world is not near, and the market will not collapse.
3 to 6 month projections are not possible at any point in time for option trading, but are for stocks. We entered Gold and Silver and TIPS in BCO about a year ago, and are doing great. We sold short puts on banking 6 months ago and hit it right.
Bernanke followed Bushy on the USD (which is how oil is valued) and it's now caught up with us. Greenspan led this years ago with his "easy money." We are now caught up in what was done before.
If McCain is elected we will have a worldwide depression, as he will change nothing and the dollar will fall more, as oil is controlled by floor traders. McCain is a supply side economics politician, ready to stay in Iraq for 100 years. Someone has to pay for this. We are paying for it now. Communist China holds our debts.
Today's moves, which we detail within our Dow projections and open signals, DID allow profits for both of our recommendations, but profit taking must be fast and tight, as the market moved bi-directionally twice around 580. We need 100 points of upside that holds to show any changes to the market that can show a shift to bias.
Oil at 142.00 did not trigger more negative downside, an interesting note in a market that has had catalyst and trigger.
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