From Ecuador

This commentary is being written as Floyd flies to the center of the world, Ecuador.

I am here on business all week, and exploring new business opportunities in an overall South and Central American market that is ready to explode;

In this blog are two homework and participation assignments to help you as a person, and as a trader

The first article is about drugs, prohibitions, and to what extent the human being craves these reliefs and changes to the brain. I have been studying on the government’s work with LSD in the 60’s, both in fright and irony at the tests, and yet what the results of some of these drugs do, and cravings that do not stop.

It appears they worsen with the additional input and stress we put upon ourselves.

So read this article and just think as you read, how far this has gone

1. http://www.huffingtonpost.com/2011/01/23/bath-salts-a-growing-drug-problem_n_812693.html

Now, get more serious. Think from the article above that we have driven ourselves to this need, and it is obvious we are trying to self medicate.

Now read who the rich really are, and the rise of the new global elite. Floyd has been calling these people the “new oligarchs”.

The shift of the money balance of the world is taking place, and ideologies are being

political movements to encourage certain types of capitalism, where the few win.

Read it through and come right back. There are some lessons in this:

2. http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/

3. Take in some of the best and real facts of the market and what is happening:

"Don't be the last bear or last bull standing; let history guide you, be contrary to the crowd, and let the tape tell you when to act"-Jeffrey A. Hirsch

Floyd calls this: Always leave some money on the table.

This is why we sold a tremendous number of positions over the past few weeks, locked in real profit and went to cash from longs.

Blue Chip alerts today will show trades like this:

Our instructions all week for stock and option buys are simple. We will summarize option sales early this week, but recommend NO new buys on any stocks or options until we see the market correct. We'd start buying again at 11,597 down to 11,440.

Teaching day trading stocks and options might help this week, as these signals we sold out on for short term profits, planning to buy back in again on market dips

-leap call-10% profits

-stock-12% profits

-leap call-sold for 13%, re-bought next day at 8.90

-leap call-sold for 21%, will rebuy on dips

- sold for 10 to 13%, will rebuy a later issue on market dip

- sold for 3% profits, and reinvested in long term LLL calls

There were several others we made the same moves with. We are settling for tight 10 to 20% profits on options that are long (past March) and reinvesting.

Other than this we recommend selling options at tight profits, and holding all positions for new buys (stocks, et al) when the market does correct, but not to buy more on the upside swing.

This is sobering:

To manufacture the Kindle, Amazon couldn’t find enough expertise and capacity in the U.S. It headed to Taiwan.

All is not as it appears.

And this is the youtube I wrote of Friday. You must really think as you watch this, as this is how fast it is

http://www.youtube.com/watch?v=cL9Wu2kWwSY

We Had a Great Year

*Facebook raised 1 billion from Goldman clients. Somehow this smells dirty, pre- IPO, and that only the oligarchs can enter.

*”Will small investors ever warn up to stocks again?” It’s the hit line in Barron’s this week babbling about the run away from equities and the hedge funds and professional trainers, having loaded up on U.S. equities with cheap money pumped in the by the Federal Reserve is a classic sign that the individual investor will now begin to heavily invest in equities, as they have been, so that the pros can swoop in, take profits, and screw the investor.

And this will happen, but with lesser impact as the small investor is only sticking his toes in the water. I suspect there is less spare cash, more caution, more paying off of debt, and the market will continue upside throughout the year, with a few strong corrections to allow profit taking.

* The Canadian dollar holds steady against the USD, while the Euro breaks out this past week and surpassed $1.36.

*Of greater interest is that small caps lead much of the growth in 2010, until Oil came bursting up near the end of the year, yet last week we saw GE and the industrials lift the Dow. The Blue Chip Index rose for the 8th week in a row, leading with Google and Warner Music also breaking out. We may be seeing a shift to more large caps in 2011, and predict we will overall see stellar earnings as the restructuring have filled the money coffers.

* The big slime top 10 banks did not have a stellar quarter and all the ongoing slime that comes out about them puts the financial sector, so strong last year, on more even ground. In our Blue Chip option service we own a specific position in relation to large banks and our option we will continue to build inventory on.

* This week we will be reporting on all of our many open options, that are NOT listed on Stockcharts.com, and with the many sales we’ve made we will also be updating our StockCharts holdings.

* For Blue Chip subscribers the best way to keep up with the speed or day trades of Floyd’s option moves, with many self - repeating is to archive your daily Blue Chip alerts, and actually track with stockcharts.com and your own “Shifty Fifty” list

* I grew up a student of Wyckoff. One of the greatest traders, teacher, and theorizer Wyckoff sold a sold license to my Father, and Wyckoff Associates began, one of the first financial newletters with “taped” lectures by my Dad to his subscribers. I am doing the same thing, by internet and You Tube, and by having short videos online.

* From my childhood my Father taught me to learn, chart and study 50 stocks/bonds. When selling them, leave them and focus on who you own, then leading back to the same stock sold, and through point and figure charting see where it is in the cycle. We study fundamentals, the mood of the “common man,” and the cycle of things.

* For those of that read these alerts, you can learn to make a living buying and selling options by using and studying all the material on these award winning sites.

It’s actually quite cool, we’ve become world known in 7 years, award winning, and remain Terry in California running our web business, my daughter Jenn writing the alerts in the evening from Floyd’s calculations and formulas while sitting in her apartment in Southern Florida.

* And cynical Floyd, the now 60 entrepreneur with hands in several businesses, teaching the OEX and stock trading to actually sit down and make myself do the analysis. So many friends would see my pre market alert concept, how I limit news input, trust no facts, and have a general argument with the concept that free enterprise could work.

This is the story of who we are and how we began. Most traders are writing in with average returns from their Blue Chip trading at 38-57%, with an average at 44%.

We had a great year.

OEX traders it’s much more difficult to ascertain percent profits because so many of our subscribers are trading within different overall styles, from day trading, to watching the stock and trading for tight ranges, or the longer term holder. We have found the OEX and S&P indices harder to trade, with less volume, in 2010, despite the profitability of our trades.

Our system works with any stock. It’s just learning to fall in love with the stock, then the option, learning it’s nuances and cycles. We’ll be teaching more of that this year.

Despite Upside Market Continues to Struggle

*The first trading day of January expiration week the Dow has been up 13 of the last 18, and was particularly “solid” in 2010

*The January expiration week, however, has been horrible since 1999, and the Dow has been down big 8 of the last 11 years.

*January expiration day the Dow has been down 10 of the last 12 with big losses.

*”Experience is helpful, but it is judgment that matters”.-General Colin Powell

*”The political problem of mankind is to combine three things:

1. Economic efficiency

2. Social Justice

3. Individual liberty”

John Maynard Keynes, British Economist

*”If we did all the things we are capable of doing, we would literally astound ourselves”

*We see, despite all upside and hitting 2008 highs, a market that continues to struggle, and is in the midst of a short term cycle high this week, which marks well with historical facts of the week.

At the same time a strong, almost forceful euphoria has built and an approach of 12,000 may be necessary for a true trigger reaction. We would see any Dow close below 11,600 as a sell signal from longs. This means, except for core accounts, the greatest caution should be in place. Lows on the S&P below 1264 and the Nasdaq below 2263 will announce a longer bearish turnaround.

*Gold should cycle low this coming week, and silver thereafter. There could be, now or later, one more move to test the highs, but we’re suspicious of too much upside.

We have sold our entire positions in GLD, SLV, GLTR, and CEF-all core holdings in gold and silver NEAR market tops. It is our goal to NEVER sell at a market top, but to always leave some money on the table for the higher risk player.

We will reenter precious metals as the sector cycles shift.

Just Follow the Rules

Futures were up, and the market hit theoretical Dow tops of 11,822. As you view our Dow projections, which have been identical for two market weeks now, it will look obvious we are approaching tops and that a correction will come.

Each day this week our call trade has made more money, for the day traders, and for those who bought Monday and just held. Our put as a hedge has lost again, but the sum of the parts outway any loss.

Two buys have been made to the put. Follow each rule to the open signal listing and there may be one more profit in this week's trading.

We are slowly seeing a market shift, but as it shifts, it reverts again. The contrarians now argue the euphoria is actually bad for the market and the true bulls think we'll create a new bubble to 13,000.

And earnings are out.

Just follow the rules. You'll miss a trade or two, but you also can buy and hold, make note, and note just day trade for a buck. Those that held the call from the Monday buy had some excellent returns.

The Famous First Week is Over

The famous first week is over. This is supposed to define the projections for the Dow and the market for a year. Got any ideas?

We had great burst up at Monday opening, followed by days of slight whipsaw downward, but never crossed any key lines.

Let’s study our economic calendar for the upcoming week first:

http://noir.bloomberg.com/markets/ecalendar/index.html

Our holding in TIPS we recommend continuing purchase. The government under Bushy spent 3 years deciding if there even was a recession, or when it began, so we suspect that Bubbles Bernanke will have as tough a time understanding deflation and what leads to inflation. Always remember, all these guys on our monetary boards have never worked, except as professors or bankers. Professors do not know the reality of the market, only the theory, and bankers know the reality of the market, their way only.

The best way to analyze this is to look at the historical data of the last few weeks, the low volume and the highs and lows of the market.

To both the OEX and Blue Chip trader Floyd has one simple rule he works from:

Analyze prior day Open, Low, High, and Close. Keep your analysis to the historical patterns of where the market ended, not just the gyrations of the day.

Historical Price Data: $INDU

Dow Jones Industrial Average ($INDU) DAILY bars

Day Date Open High Low Close Volume

=== =========== ========== ========== ========== ========== ===========

Fri 07-Jan-2011 11696.8600 11726.9400 11599.6800 11674.7600 1157085824

Thu 06-Jan-2011 11716.9300 11736.7400 11667.4600 11697.3100 1004811904

Wed 05-Jan-2011 11688.6100 11742.6800 11652.8900 11722.8900 922302272

Tue 04-Jan-2011 11670.9000 11698.2200 11635.7400 11691.1800 918602816

Mon 03-Jan-2011 11577.4300 11711.4700 11577.3500 11670.7500 919851520

Fri 31-Dec-2010 11569.3300 11597.4100 11530.3200 11577.5100 327053792

Thu 30-Dec-2010 11585.3000 11594.3800 11551.9300 11569.7100 344135488

Wed 29-Dec-2010 11572.7400 11625.0000 11572.6600 11585.3800 356986208

Tue 28-Dec-2010 11554.8000 11591.1300 11541.1400 11575.5400 451611392

Mon 27-Dec-2010 11572.8100 11573.1900 11518.4400 11555.0300 402863392

Thu 23-Dec-2010 11559.1100 11580.8400 11542.6200 11573.4900 502196992

Wed 22-Dec-2010 11532.1700 11566.9900 11528.0800 11559.4900 678702528

Tue 21-Dec-2010 11478.3600 11549.1200 11478.2900 11533.1600 619990016

Mon 20-Dec-2010 11491.3000 11517.0700 11442.6800 11478.1300 598926912

Floyd doubts we will pass 12,000 without a more substantive correction, but that correction will be consolidative and profit taking, and lead us up the same settings.

We have had extraordinary success with our options this week. Remember we buy many long or leap options, but then day trade the long expiry.

We made up to 25% in RIG, APPL, and several other call recommendations, and were able to re-buy again at our first price.

Gold and Silver are going to take a vacation and we believe correct. We have sold all of our long positions fully to lock profits and will re-buy again within a few weeks for what we think will be a higher and faster run up for these commodities no later than March.

Right now everyone is being corrective /fearful/conservative of a bubble and it’s time to let these commodities breathe.

As trader Alan brought me to a number of rare earth stocks we’ve had some extraordinatry gains in recent weeks, and even left too much money on the table for some of these 140% in a day gains.

RIG made us good call option money and we’ll buy it again when oil moves even lower, and RIG will benefit as oil companies work to find new oil.

We remain strong on XLF, and are now watching for entry to some healthcare leader besides JNJ and SNY, as we think healthcare will prosper and that after a few more handslaps the greedy top banks will beat the system again and make great money.

Charles Nenner Research-market guru:

“Sell NASDAQ at 22220 as a stop; sell S&P500 1251.”

Floyd research:

Take profits off the table no higher than theoretical Dow 11876. Be preparedto re-enter near 10,200 or higher. Long term holdings can simply be added to, but for those momentum traders, BE SURE TO LEAVE SOME MONEY on the table.

Please make fun of everything. It puts perspective to value.

Question all facts, and all presumptions. Lead a life of only trying to listen and contribute.

Keeping Your Shoes Tidy

2011 off to an overly bullish bump up. Arthur HIll, with Stock Charts, says:

-- QQQQ AND IWM BREAK DECEMBER CONSOLIDATIONS
-- HANG SENG BREAKS WEDGE RESISTANCE
-- SENTIMENT INDICATORS SHOWING EXCESSIVE BULLISHNESS
-- PUT/CALL RATIO BOUNCES FROM BULLISH EXTREME
-- VOLATILITY INDICES STILL TRENDING LOWER

All of these are signs of a market that either won't stop, or is just about to hit a top and begin a short term correction. It's anyone's bet.

We were not able to gain entry to our call position yesterday because of the market opening so high, and with futures showing 100 points up at opening it was also not prudent to

even consider the put. We'll try again today with both of the same signals.

Note how close we are to our Dow tops. 11,846 to 11,950 are huge resistance areas that should "slow the market," if anything can.

And as those Republicans get to work solving the problems the Democrats created (it's like a fairy tale nightmare from Fox) a nice letter from a subscriber that, like I, travels overseas, and can see the differences:

On a recent trip overseas, as I passed through security at the airport, I was met by 15 shoe shiners. Immediately, I noticed the difference in the way each one conducted business.

In America, most of the shoe shiners wait for a customer to sit down. Some may make a motion and ask, “Would you like your shoes shined?” I’ve always wondered why they ask this question. They know the response is either “yes” or “no.” The question only gives a 50% chance of success. Not very good odds for shoe shiners.

But in this particular airport every shoe shiner ran over to get my attention. “I can make your shoes new again.” “Come sit with me for five minutes and you won’t regret it.” But one shoe shiner stood out. He said, “My name is Adu and I love to shine shoes!” That was my man because he genuinely loved his job (no matter how trivial to others). He spoke to me through the entire experience. He was friendly and gave me tips on keeping my shoes tidy. In the end, I gave him a tip much larger than the price of the shine. Why? Because he turned something boring into a memorable experience. If I ever find myself in that airport again and Adu is still there I will gladly wait for him if I need to.

I feel certain the other men could shine shoes just as good or maybe even better, but Adu had a childlike spirit and love for what he does. His passion was contagious and he was a joy to be around-his personality shines above his competition. Adu loves what he does and treats every day as if it was his first day on the job. That’s his key to success. Do you love your job and have the same amount of excitement for it today as you did your first day? How bright are you shining today?"

Happy New Year 2011

For Monday, January 3^rd, 2011

Happy New Year. Despite all the bad news, the constant finger pointing, the Tea Party, the Republican refusal to compromise, Afghanistan, and the stalemate in vote, all covered by greed, we had a good year. And Sarah Palin had a boob job.

Dow +11%

Gold +28

Oil Futures +13%

Cotton Futures+89%

10 Year Treasury +7.7%

Volatility Index -19%

Natural Gas Futures-222%

Shanghai Composite- -16%

*Small cap stocks had the highest returns in 2010, and we were well positioned in our holdings. Our Dremain fund is up 28% and our numerous shot term buys and sells have hit 44% returns.

*We hold WMT, RIG, AAPL, CAT, and PG all as long term options. Continue to hold these, and to day trade them for any good profit, as there will be times to buy again.

· As euphoria abounds, there are some warning signs, and as usual, we will not see them. Greed will blind us.

· Short interest is minimal.

· VIX is at true lows

· People are borrowing more on margin to trade again

· We’ve had 17 weeks of upside

· Every part of corporate America has benefited, except small business

· Job loss has equaled export growth. We’ve hurt people to make money.

· Consensus of bullish sentiment is at all time highs.

“It makes the contrarian shiver in his bones. To continue this outstanding economic improvement things must really fire on all cylinders, and food costs up, gas rising, will hold consumer confidence steady at best.

Contrarians will tell you that 2011 will be the reverse of 2010; decent economic growth, but a disappointing showing by the stock market. That’s what most people do not expect right now; precisely why investors should be worried about it happening.

Many technical analysts do not believe the argument that the cash that has been supposedly on the sidelines will be a steady source of fuel for an equity rally.

This is the first full week”back”, and the week that supposedly proves if the market will be up for a year.