Floyd's Trading Blog

G-20 Ends With Little to Show

2011-11-07T04:34:00.000-08:00

The first week the Dow slipped in a slippery battle between support and resistance. Bulls see highs of 12,746, with a potential drop to 11,890 before or AFTER this move; Floyd continues to see whipsaw but upside through December. Now is the time ALWAYS to lock profits when you can. G-20 Ends With Little to Showhttp://online.wsj.com/article/SB10001424052970203804204577017353037510564.htmlDow Snaps Win Streakhttp://online.wsj.com/article/SB10001424052970203804204577017512073206828.html____________________________Economic Calendar:http://www.bloomberg.com/markets/economic-calendar/We are enclosing 4 Dow and and OEX Point and Figure charts showing the bullish % and the area above 50 day and 200 day moving averages. We saw our first slippage this past weekWe are also leading off this week with charts as our conversations this week will be entirely about existing holdings, current recommendations,and where equities now play an even more important roleThe test of our progress is not whet ether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little. FDR(Many Christians will find this socialistic jargon as giving is only IN the Bible, not over sharing)___________________________________________________________________________________ At OEX Options we offer an advanced mentoring service to a limited group at a time. Our approach is legendary in that we have no course, no book, and all is customized to the client. Study: http://www.oexoptions.com/AdvancedMentoring/AM.htmlI find most fascinating a recent subscriber at 20 years of age, my youngest client yet. I require of students that they they a number of psychological tests and also write a letter to me answering a series of questions .This letter has been slightly altered to protect confidentiality, but is presented along with my responses to the client and an analysis if his psychological testing. What AJ is learning about himself is how we teach you to effectively trade.His Letter:"I was born in India, Punjab, on November, 08, 1990. My dad was a farmer; he came to United States in 1999. In 2001 me, my mom, brother, and sister came to the United States. I started school in 6th grade. I didn’t know any English a lot of kids made fun of me and I didn’t know how communicate with them. That motivated me to learn English rapidly. As years progressed I learned the language. I started high school in 2004. On my senior year I took a Pharmacy tech course. I completed my pharmacy tech course, got my licensed, and graduated from high school in June, 2008. Right after high school, I was looking for a job as a pharmacy tech. They were paying about $13 dollars an hour. I thought I would save up and look for a business opportunity. I applied at various place but didn’t get any response from any employers, they were all looking for experienced techs. So, I started working at Subway for part time and started college. I saved about $6,000 dollars and I was looking to invest it." I started searching online for opportunities, while I was doing that, I came across a website that was teaching people how to sell insurance and become an Insurance agent. The fee was $5000 dollars, so I decided to drop college and pursue that career. Andy xxxxx was the fellow, who taught that course. I did some research and started building a relationship with Andy. He really liked me, and he was a good man and still is. I was only 19 years old. While all this is going on, he happened to be starting a company. He wanted me to be part of it and I was really excited and I said yes. The company he started was selling insurance leads to insurance agents. I worked as a Sales rep. Did that for about 4 months wasn’t making and money and the company was failing. He decide to hire a Manger name David xxxxxxxi . I started working with David and built a good relationship. David was a insurance agent as well and on the side he had his own business selling exclusive insurance leads to the top companies who were selling those insurance leads to agents. I wasn’t making any money with the company. David decided to offer me a job. It was from home what I would do was input the insurance leads in the data base of the companies that were selling those leads to the insurance agents. I was making good money about $3,000 dollars a month. I did that for about 7 months. David was also a day trader. He traded crude oil for a living. He got me into trading crude oil. I was really interested and I wanted to do it as well. While I was working for David inputting the insurance leads. He was paying me every 45 days. I trusted him, we had a good relationship and he started teaching me how to trade crude oil. He introduced me to a trading room. I started trading and I lost about $5,000 dollars first. While that happened I talked to David I told him I lost $5000 dollars. He said that’s just the learning huddle. He said he lost about $15,000 dollars when he started. That gave me some hope; I stuck with it and lost another $5000 dollars. While all that is going on David had owed me $8000 dollars. He said he was going pay me the next week and he was going on a vacation for 4th of July. After that day I never heard back from him, he still owes me $8000 dollars till today. I called him, left him voicemail, emails, and still haven’t heard back from till today. Now I’m here writing this letter to you. *What would your Father say about you? My father describes me as a hard worker, responsible, mentally tough, mature, and good money management. If even though I lost a lot of money investing. He still believes i will be successful one day.*What would your Mother say about you? My mother describes me as a loving, caring, takes care of my younger brother and sister. Setting good examples for my brother and sister.*Do you want a physical relationship with a man or a woman? I want a physical relationship with a woman. I am currently single and not looking for a relationship. I think I’m not ready for another relationship. I don’t have the time or the energy. I am really thankful of having a father, mother, brother, sister and my dog to keep me busy right now.*Do you feel denied anything? I don’t feel denied of anything.*If you were seriously going to invest how much money could you manage to obtain, outside of the 2k you have now? If I was seriously going to invest I can manage to obtain whatever I have saved up at the time I am ready to invest. I wish I had more money but I don’t. I can save a lot of money. I don’t like wasting my money on things I don’t need. I don’t go out a lot just because I don’t to want to spend money. If I go out I know I am going to end up spending money.*If you were rich what would you do? If I was rich I would still invest in real estate, business, stocks and etc. I would also give money to charities, help people in need. I rather have a big impact on someone’s like then go spend my money on something I don’t need and make someone a small profit.*What is rich? How much money you make in a year? (What is a lot?) I personally want to be a millionaire first then a billionaire. That’s my goal and a dream. Will I achieve it? I don’t’ know but I will give my 100 percent. I do not want to worry about money, not worrying about paying my bills. Knowing you have a skill to make money anytime. It’s not that I’m greedy I just love watching my account grow. I want to grow my account with smart and sound decisions.*What do you want to be when you are 30 and 40? When I am 30 I want to be successful, hopefully on my way to being a millionaire. I know it’s not that easy to be a millionaire and it’s not going to happen overnight as long as I know I am trying my best at it. I want to get married someday and start a family hopefully when I’m around 30 but I don’t want to get married till I’m not financially satisfied. I want be able to support my family and give my kids a good role model. When I’m 40 hopefully I am a millionaire by then. *Where do you want to live? I want to live here in southern California. I can’t imagine myself moving out of here. I grew up here this is my home. It would be just strange leaving somewhere else.*Who do you hate and why? Who do I hate…..? I don’t hate anyone. If I dislike someone I just completely cut my communications with them and my life goes on.*Who do you tolerate but just barely, and why? I quite don’t understand this question.*Are you worried about your future? Yes, I am worried about my future especially at this point of my life. I think its make or break point of my life. I want to be successful, be able to support my family someday.* Why do you want to trade? As compared to “play the horses”, trade and buy/sell? I want to trade because I am really into it. I am really fascinated by trading. I really want to learn how to trade. I know I will give my 100 percent to learn and get educated about trading. I am willing to do whatever it takes to become a professional trader. I want a skill that I know I can make money anytime and that to me is true freedom.* Do you believe in religion? Which one? How much? How does it influence your life? I do believe in religion. My religion is Sikhism. I grew up with the religion. My parents are very religious we go to temple twice a week, every Wednesday and Sunday. Being a Sikh influenced my beliefs it taught me to help people. We believe there is only one God and all human beings are equal.* If not to above, why?* Do you masturbate? If so, how often a week? If not, why not? I do masturbate about 4-5 times a week. I am still a virgin that’s do to my religion. You’re supposed to be a virgin till marriage.* Are you more attracted to women then men? I am more attracted to women but I would prefer to have men has my friends then women. When you have women as friends it just complicates your friendship with each other. Having male friends I am more comfortable. Having a female companion is a different story. I will have a female companion but male friends.*What is your favorite color? I don’t really have a favorite color. I like anything that goes with the fashion. *When we have a week to do anything, no limit to cost, what would we do, where would we go? If we have a week to do anything and unlimited money. I would go help people in need. I know that today a lot of people live in poverty. What we have Is nothing close to people have in Africa, India, china and etc. I would also help animals in need. A lot of animals are abused, mistreated, and without homes. I want to start an origination with good hearted, genuine people that will help people and animals. In today’s world we need more than one person to make a change. Please answer these questions in as detailed a fashion as you can. I am also enclosing a psychological test. Please complete, score, and send me the results page"AJ utilized a version of a Myers Briggs psychology test that I use and scored a strong ISTJ. ISTJ introverted-sensing-thinking-judgingQuiet Serious Practical Dependable Loyal Steadfast Responsible Sensible Patient Conservative Values hard work and honestyWhat AJ shows me immediately is that has introverted, high work ethic, deep respect and works and thinks. I know already he will be successful and am now ready to start recommending what to do next. Our Core Book Library lisiting on the website lists books Floyd sees as valuable and the first book any of us should read in Tom Dorsey" Point and Figure Charting.For those for more beautiful charts and more deep explanations consider The Definitive Guide to Point and Figure Charting by J. De Plessis.I personally have read Dorsey's book at least 40 times. Much of it is also outlined in the movies in our password protected area.So AJ, you are one wonderful young man with work ethic. I am proud to have you as an immigrant and you are what makes The United States of America._________________________________MOVIE COMING THIS WEEK: MORE ON ILLOGICAL LOGIC. We are receiving huge positive feedback on how to learn to argue with the fundamentally illogical.This week we also will be going over a great number of our existing holdings and buys and sells in equities. It has actually been easier to profit on equities than options with this type of volatility.Prepare soon for a shift in Treasuries and some new option plays, and pay particular attention to our stock lessons this morning.

We Don't Have the Capital to Support Capitalism

2011-10-30T18:21:00.000-07:00

The first trading day in November the Dow has been down 4 of the last 5 years, but up in 2009.We don't have the capital to support capitalism. So the sovereign debt end of the world players speak, and I predict we will have a euro crisis ( in process) that could and should lead to a United States of Europe. Gerhardt Schroder writes in The Christian Science Monitor that the wold order is so shook now that this is likely to occur. Mr. Schroder is the former Chancellor of Germany, and a member of the Nicolas Bergruen Institute 21st Century Council.This is not JIm Cramer, but someone smart. Done right, Sarah Palin fans, we will become a GLOBAL POWER. Click Here for a listing of a number of his articles and thinking. Cheniere Energy just signed a game-changing deal.On Wednesday, the liquefied natural gas (LNG) terminal operator signed an $8 billion deal with international natural gas giant BG Group. The 20-year agreement includes BG exporting natural gas – from the U.S. to Asia and Europe – through Cheniere's Sabine Pass plant in Louisiana.The Sabine Pass is an 850-acre LNG transportation facility. It has a 40-foot ship canal and five tanks capable of storing over 17 billion cubic feet of natural gas. The facility is 90% owned by Cheniere. It's expected to export LNG oversees by 2015.We would and will hold only CHK (Chesapeake Energy and Cheniere Energy (LNG) in the long run core holding to natural gas. This sector has been flat for all too long.Last week all of you lived to go short. Every day at least 5 to 10 subscribers begged me for a put signal, and begged me to explain WHY the market was going up.Because of the negativity in the world conversely few asked what was going on as the market headed to oblivion a few short weeks ago. We also now have proof the Pee Party came in "representing the people", became Pube Puppets and our Congress remains frozen. They came in naive, all having read the Constitution perhaps once, and all believing in Christianity. Overall there is Dow support at 11,398 and resistance at 12,400 area.Over the long term (6 weeks) we see a bull market, perhaps the top for the year.

The Power of Stupid People

2011-10-23T18:28:00.000-07:00

Commentary:NEVER UNDERESTIMATE THE POWER OF STUPID PEOPLE IN LARGE GROUPS. This is one of the most important things I will ever teach you.The History Place - Rise of Hitler: Hitler Runs for Presidenthttp://www.historyplace.com/worldwar2/riseofhitler/runs.htmThis is an interesting article to show you WHY some run for President and why there are certain times in history that someone is elected that it's done on country psychological need, despite the absurdity of the personFrom MP, again. MP is a trader that fought every part of our system, broke every rule and drove me nuts for several years. He persisted in not following the rules, using his religion in stock trading and has now hit his groove. All of his trading methodology is based on Floydian logic. I'm really proud of him."Hey brother..For starters...I want to thank you again for your support and encouragement...our relationship is not only making me a successful trader...but a better husband and Father. I'm learning so much from you and it's all beginning to click..Last night I sold the Euro Dollar at 1.3790 and bought it back at 1.3740 for a quick 50 pips..and then I began my day by buying the euro dollar at 1.3805 and selling at 1.3890 for a solid 85 pips of profit...You know..Jared Martinez from Market Traders Institute insists that if a person can net average 100 pips of profit per week or 400-500 per month...then he or she can become a millionaire...Since July...I've been averaging 100 pips of profit per week..EASILY....Now listen....I'm no where close to being a millionaire...but I'm learning the skills to getting there! And much of what you taught me I have applied to the Forex market..._________________________________________Anyway...I had some errands to run today so I didn't have much time to trade after 10:00-10:30am...But when I saw the DOW hitting 11,760 and the OEX hitting 559 at about 10:15 eastern time...I couldn't resist and bought my Dad the 560 NOV put for 17.40.....I knew this was a key resistance level and I figured she would stall and retrace to at least the 38% fibo level for the day..If the low of the day for the OEX was 549.83 and the high was 559.14...the 38% fibonocci retracement was roughly 555.60...So I bought the put at 17.40 and used my theoretical pricer on my trading platform to see what my option would be worth if the OEX hit the 38 level at 555.60...I was given a range of about 19.40-19.70 at that level...So I put a sell order in for 19.50 and went out to run errands with my daughters..Came back 2 hours later and she was easily filled as price because she actually retraced to the 61.8% level...I could have made another 1.00 per contract but seriously? How do you know? I wasn't even home to watch it...So for me the safest play was the 38% retracement level..especially since I couldn't monitor the computer...So once again...thanks to you...I made my Dad 12% on his money in 2 hours...and I was out doing other things!Total winnings on the year are now up to $19,000...I feel as though I've learned a great gift..your patience with me is finally paying off!!Thank you my friend.Enjoy the weekend." Here''s the trigger points for this coming week: http://www.bloomberg.com/markets/economic-calendar/Here's what the chartists tell us. -- SPY AND DIA MAKE BREAKOUT BIDS -- CONSUMER DISCRETIONARY SECTOR LEADS HIGHER -- STEEL ETF AND AIRLINE ETF FORM FLAG CONSOLIDATIONS -- HOMEBUILDING ETFS GO FROM LAGGARDS TO LEADERS All free governments are managed by the wisdom and folly of people and are far from truly free. We live in a plutocracy, not a democracy.James A. Garfield, 20th President of the U.S.What has stood out most in our successes as a stock and option trading service we'll be repeating again this week, as many of you lost money on sale of "basket stocks" we owned but paralyzed in buying blue chip stocks up and taking back the profits. Study our Dow projections as we've exacted the science of how to trade off the Dow and S/R lines. -- there is a zen to art of trading. Be it.

Illogical Logic

2011-10-09T16:38:00.000-07:00

I have steps to our dialogue this week:1. We are entering our 5th week in the same Dow Cycle. Highs are possible as October ends the Dow's "worst six months" and the "correction" occurred. Doomsayers may go back under the rock for the time.2. Today is Columbus Day so the banks and government are closed. For those of you with good minds, please piss on them. The rest of us work. http://www.bloomberg.com/markets/economic-calendar/3. "Even being right 3 or 4 times out of 10 should yield a person a fortune, if he has the sense to cut his losses quickly on the ventures where he has been wrong." - Bernard Baruch4. Money was made so many ways last week I'm still surprised. Many traders day traded stocks (such as MP with his wins for his Dad and himself going in and out of just a few stocks), or in retiring 20% in two weeks in a stock recommendation 5. OEX option trading is harder than it has ever been because the swings are so volatile and huge that premiums and erosion planning vanish. Watch all of our signals during this time period and don't be geared just to an option. Volatility is so extreme that we have to use extreme prudence in any trade.6. "The most successful positions I've taken have been those about which I've been most nervous, but ignored the emotion. Courage is not about begin fearless; courage is about acting appropriately even when you are fearful." - Daniel Turov7. I have learned in trading commodities, or cash derivatives, that the law of supply and demand is first led by the law of cause and effect, not the usual reverse, and commodity futures are more on "money" than supply and demand.8. Nenner believes that Gold cold reach 1700 and Silver 34.00 yet still be in a corrective cycle. Cycles bottom by the end of October. 9. Oil may continue to rally as long as we don't have a close below 81.0010. I believe we are at or near the bottom of this cycle. It appears we've bottomed but we'll watch a day or two and then continue building long positions. As you know Floyd has been buying equities in our existing portfolio for the last 1000 points of drop, insistent the market is being manipulated for short term gain and political plays on the parts of the Pubes. For those of you not clear on Pubes it is my nasty name for pubic hair Republicans that are acting as our leaders. I'm embarrassed right now to be an American, and I do not believe we the either the most powerful country, nor the greatest, on earth. Our hubris amazes me. 11. Natural gas continues a flat cycle. We still like CHK as a good long term Natural Gas play with a CEO that buys into his business and runs it like a complete crook. Chesapeake has a good long term cycle to it.I spent the last two weeks on a great experiment in psychology, human nature and the character-ology of the personality type that "must be right" and to "win" uses a form of logic that is indisputable. I believe this form of logic so frightening, maddening, and damaging that I've been commissioned as a consultant to prepare a study on this type of argument, and I'm beginning an article and lecture series on how "those that must win" (evangelical Bible Thumpers are a perfect example) use a form of logic within their verbal or written argument to you that makes it impossible to respond. It's called Illogical Logic. You'll see several movies on this over the week as its' a clear way how to beat yourself, and beat the market._____________________________________Floyd's Favorite FAQ of the week:"Everything I read on CNBC and in the news shares that the market has no financial strength and that Obama's debt will take the stock market down Why should I trade?"2/3 of the sovereign debt increases that have occurred since 1960 were signed in by Pube Presidents.71% of the current U.S. debt was accumulated by George W. Bush. It is rumored that George is now reading every day. He told 60 minutes last month that he reads the Wall Street Journal. Wow. HIs skills are up, he is reading, but it's Murdoch lies. If one adds amortized debt for increases in existing, NOT NEW, government issues the debt that Obama inherited was 81.3% of our overall debt. The reader is being influenced by illogical logic. Take prudent riskLast but not least I am getting ready right now to BRIBE you. Please be open. For four years our little company of myself, daughter Jenn, the apprentice, and Terry Brown, my partner and webmaster have managed to build one of the top ten Readers's Choice Option Advisory Services (2008 thru 2011) and it's my proudest personal achievement. It is for three reasons:1. Dad is long gone but he would have been proud2. We started with nothing and have built this ourselves3. Traders world wide compliment the unique style and methodology we use. So here's my bribe: -Read the attachment that came that offers you a one year FREE subscription to Stocks and Commodities Magazine merely for subscribing to OEX Options. For those of you that are already paying (not on trials) subscribers your subscriptions are on order and you'll be receiving notification shortly. If you already subscribe I'm sure Stocks and Commodiites will combine your subscriptions.-Find your customer # of the magazine and help to vote OEX in as one of the top ten Readers Choice Options Trading Systems. Here's how: 1. Go to http://traders.com2. Top right there is a box that says 2012 Readers Choice Awards3. Sign in and enter your new subscription # and last name.4. The group Options Trading systems is on page 4 of their website. Vote for us!5. And finally, don't forget, go page 5 and hit submit! SUCCESS! You have really done all of us a favor and you have been bribed. Better yet you get a full year subscription to the best trade magazine Stocks and Commodities in the industry! PLEASE DON'T FORGET TO HELP US. VOTE!! DEADLINE IS DECEMBER 31ST, 2011

Question All Authority

2011-10-02T22:32:00.000-07:00

Commentary: Please log-in to view the movie on the website today for a verbal update on this weekly commentary. And also do the following three things, to learn stock market success:1. Question all authority.2. Question all government, voting facts, and corporate facts. Most are lies.3. Distrust anyone that believes it is harmful to them to let others have more. These are people that have not learned what humanity is. You have no time for them.The chartist point of view: -- OVERSOLD GERMAN STOCKS ARE TRYING TO STABILIZE -- GERMAN ISHARES ARE ALSO TESTING SUPPORT AT THEIR 2010 LOWS -- FOREIGN ETFS INCORPORATE DOLLAR TRENDS AND, IN MY VIEW, ARE BETTER TO CHART -- NASDAQ COMPOSITE STALLS AT 2600 RESISTANCE -- AN OCTOBER DROP COULD LEAD TO MARKET BOTTOM -- FALLING RATES AND RISING VIX ARE HELPING UTILITIES Real Facts: This is my anger and the point of the dialogue we will create this week about illogical logic. This occurs when you are arguing with someone that argues illogically; in the end, you are bound to lose71% of the current U S debt was accumulated during Republican presidential terms. 2/3 of sovereign debt increases have been signed into debt by Republicans since 1960In 1961 the average American corporation paid in 40.5% in taxes vs. 10.5% in 2011.These are examples to show you how you have been mis-led, and how you begin to believe the misleading as the fact when it is the reverse.Another example is to see the illogical person take the real fact and when answering it change the subject. This is called Illogical logic and is an article I'm preparing to share with all of you this week, that I use in my consulting practice.Read this carefully. This is after eight years of Bush creating "Leave no Child a Dime". Ask a teacher what they think is going on with our educational system. In Texas we have re-written the history books already to make it all look good.I am trying to show fair perspective but here's a quote to show just how fucked up we are. I will bet that 98% of the U.S. does not even know what quantitative means or is, and 1% misunderstand it. From an economic standpoint I have seen no other point of view or plan that resolves a forty year problem. Further, from the Pubes or Pea Partiers, I hear nothing. They have told me clearly, and you too, all we are doing wrong.I have yet to see any portion of any plan, of any response. Answering "getting out of debt" is tough for me when they accumulated 71% of it.Here's a sad story: The question was What is an American? The correct and only correct answer is: Someone with a green visa card up to date, a passport, and citizenry in either the U.S. or its territories or Canada.Below I've read a typical "OMG" email. The rest of the linked in group seemed to forget that there is a South, Central and Latin America. When reminded they "did not see this part of the world as "the question asked) WTF) or better, "people all over the world see Americans as U.S. citizens. They do not think of Canada or the other countries.WTF? These people are allowed to vote?LinkedIn Groups...Group: Leadership Think TankDiscussion: Define What is an American.A USA american is the sucker who will never have the retirement or any other benefits he was promised his entire working life. He is being cheatred out of them by the very polititions he elected to protect and serve him. They have been paid too much graft for the last 100 years to care at all of the people who put them in power these warnings were even made public in the 1930,s by Jimmy Stewart. Today your future is being stolen from you by devalueing the country thru this new thing called Quantitative easing which is stealing your savings and purchasing power as fast as it can, not only in US but Europe as well. The major american corperation that has stolen the very life blood of that once great country now reside worldwide keeping their ever growing assets outside the country that nurtured their growth and they bled to it's last breadth. I truly feel sorry for americans for they are too stupid to even know what is happening to them.Floyd: this is illogical logic. There is no proof, validation, or economic back up. Just a theory. And he blames the politicians. Please remember it is YOU as an American that voted for George Bush twice. I blame Americans, not politicians. We are what we decide.We are close to doing the same thing again. This man blames "who" for this. He has no idea that the banks almost all closed the first week of Obama being in office. Long after Paulson had given his friends all the 785 billion FAST before the term was up.For those of you that would like to get past lobbying and want the tax answer: legalize pot.Read more at http://bit.ly/mOQGZ6This is reverse logic. The liquor companies lobby against this, as do the "religious right". We miss a mighty tax revenue in the name of absolutism and prohibition which of course fails-- STOCKS SHOW LOTS OF MOVEMENT AND NO REAL CHANGE -- DECLINE IN ADX REFLECTS LACK OF TREND IN SPY -- XLK AND XLY FAIL AT KEY RETRACEMENTS -- RETAILERS HOLD THE KEY TO XLY -- NYSE AD VOLUME LINE BREAKS AUGUST LOW -- AROON DOWN TRIGGERS BEARISH SIGNAL IN NY COMPOSITE

A Love Letter

2011-09-17T18:14:00.000-07:00

The week after September triple witching the Dow has been down 16 of the last 20; this could be proven true as we reached market tops Friday and hesitated OR could be a good trick to see the market fool us and hit new highs before correcting.To all those telling me that the USD was being ruined by President Obama please stick your fingers in your mouth and go back to economics school.The USD is only one method of currency, and all currencies change value throughout time, including Gold and Silver.2 out of 3 of the debt ceiling elevations that have been signed into law by Republicans have been 2 out of 3. Funny how what is happening now is SO different.Another incredibly profitable OEX week. As always, when I pick so well for an extended period of time I become much more prudent and risk conscious. The market will also beat you; not you the market. It is what it is teaching you.Economic Calendar: The FOMC talks this weekhttp://www.bloomberg.com/markets/economic-calendar/The chartists comment on last week: -- CONSUMER DISCRETIONARY SPDR RUNS INTO RESISTANCE -- NASDAQ AD LINE HITS NEW LOW AS NYSE AD LINE BOUNCES -- BIG TECHS LIFT NASDAQ AD VOLUME LINE -- BANKS WEIGH ON NYSE AD VOLUME LINE -- CUMULATIVE NET NEW HIGHS LINES REMAIN WEAK Track Record Three Weeks: We have had only one losing trade in three weeks on the OEX. Many traders have been able to trade two or three times a day.We have traded contrarian to the market most of this time.Friday ended right at our resistance line of 12,540 with many subscribers to now "reverse" and make money as the market corrects. Greed is a flag here, as we read Dow projections and note that there is possibility of more upside, and the U.S. seems a bit less concerned about the Euro, for the moment.A serious love letter and what it means to you:"First off I want to apologize for the length of my letter, I just felt very compelled to write to you.I have been trading since the early 90s - at times very much full-time, and at times very sporadically. I've lost my shirt. I've had moments of wonderful success, only to give it back again. I have spent tens of thousands of dollars on training. I even started to look at my emotions, but ultimately couldn't get passed the fear and greed, glued to my screen tick-by-tick, even if my trades were position trades.In parallel, I have been on a spiritual journey for as long as I can remember (who isn't ultimately). But at some point I began to experience a deep shift. I began toexperience - and therefore know deep down - that I am the creator of my reality. Not an influencer...not a mere participant...but the direct creator of my experience. And the more I "clean" beliefs and emotions that no longer server me, the more I experience what I truly want.And this is how I re-connected with you and your extraordinary work. I say "re-connected" because I was an OEX Options subscriber a few years ago, but was still so deep in unconscious / emotionally-driven creation that I just didn't see the wisdom of your work. I was a subscriber for probably a month or two. But I re-connected with your service after a series of contemplations on freedom, ease and abundance: how to live my life in great abundance, great freedom, great joy. And your face popped up in my consciousness. I immediately searched my email archives (I no longer wait when I have such insights), signed up for your free trial and started trading on a virtual account (I don't have a dime to trade with at the moment).I can hardly believe the result: not only have I increased my $1M+ virtual portfolio by 40% in just over 2 weeks, but more importantly, I have accomplished this in virtual calmness. And the rare moments of fear and greed were met with a keen realization that these feelings no longer serve me: they are opportunities to further embrace and clean my negative emotions.I always had the hope that I could make a living trading...now I know it's absolutely possible, especially with the wisdom you offer. I know that with you trading can be as much a spiritual journey as a material celebration of our divine nature. I no longer separate these two "realms" and I have chosen to consciously live out my life this way. The funny thing is that I recently stated out loud that I wanted to meet individuals who consciously embraced this point of view. When I watched your introductory video on your homepage, I smiled broadly when you said that you are a zen buddhist. I knew then that my re-connecting with you was a direct answer to my request.Every moment of everyday I now focus on the following vision: I AM trading a $100,000 account, easily living off a portion of this steadily growing trading account. I see myself as an apprentice in your advanced mentoring program, continuing my journey to learn about myself and grow as the creator that I AM. I see this vision manifesting immediately.I am honoured to have come to discover you and your work, and I look forward to continuing my journey with you."Very Sincerely,Marc-Elliott XXXXXXXXXI share with pride the letter from Marc-Elliott XXXX as it is why I am here. I do not need to have this service to make money. Many of you must wonder that? If he's so good why does he teach others and not just get rich?For other services I can't speak, and it's why our service is really geared to floor and market maker traders blended with the new trader because my perspective is unique in the market. I want to teach, to show that a rock is not hard, that we only know what we know, that we are lied to more than told the truth by all authority, and that organized religion should be immediately distrusted.My goal is to see you "beat yourself' as the game is not about how much you know about a stock or option, but how much you know about you.

Jefferson Was a Ponzi Schemer

2011-09-11T13:05:00.000-07:00

Commentary: I have much to comment on and share, as I think we are at a pivotal point in the market and the world. As not much is truly 'in order", neither are my first stream of consciousness trader thoughts to you:We are becoming manics. The input is overwhelming us. The url link is a long and scholarly article that I will not decipher for you; I believe it important you find your own conclusions.MAGAZINE | August 21, 2011Do You Suffer From Decision Fatigue?By JOHN TIERNEYThe very act of making decisions depletes our ability to make them well. So how do we navigate a world of endless choice?Copyright 2011 The New York Times Company | Privacy PolicyEach week another trigger catapults us directionally, but with such a magnetic changing bias the argument for more downside becomes clear to the doomsday's, and the bulls continue to think we have one of the best equity buying times since World War II and that equities will outpace bonds in a growth period, long lasting enough just to make everyone think it is all fine.And then a massive market crash.That's one theory.But another theory, which I've heard ad nauseum from many of you is the USD had become powerless under Obama and the USD had become worthless. During which time I tried to teach:a. No currency is real or lasting, any valuation of emotion can change. The USD did not demise under Obama, Bush had done a fine job destroying the dollar earlier, and it's part of our economic crisis.And, to the doomsayers sharing with me there would be one world currency (there might be, and the Euro may fall), and the USD would not be it !!!!, well, okay, it doesn't really matter, but the USD is at all time highs. All the dooms day false facts I have heard thrown, may I throw right back. Our worthless dollar is the most valued of instruments.Question Authority.b. The USD is only a derivative instrument and the value of any "paper currency", product, or "gold", is really just what the public will pay for it.c. It is meaningless, unless a derivative trader, to even care what currency leads, as long as one knows which will lead. We care about valuations and our ability to buy, spend, and borrow, NOT about who is the most powerful (Russia).___________I constantly refer to false facts. As you review the Dow projections above here's a fact that will help us understand what I call "illogical logic".in 2008 the Dow lost 504 points before the Triple witching of that week. Now 500 points seems nothing; but make note Friday is triple witching expiryEveryone loves Thomas Jefferson, the great statesman. Please do your history to learn the real facts, but : "banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling on a larger scale.Jefferson began banking in the U.S. and was a Ponzi schemer. Check the facts. Not the glorified history books.

I Made Money

2011-09-05T21:06:00.001-07:00

"Hi Floyd,
I made money on a signal you gave EVERY day last week on the OEX, averaging 21 to 36%. I additionally made 28% on my sale again of the October GLD call, and sold out all my long term treasuries for an overall 18% return, principal increase by price and interest rate.
I did almost the same with you last week and have made money consistently with you after 60 months of Advanced Mentoring.

At the beginning of Advanced Mentoring I screwed up and started trading and I did not trade the bias you told me, wrong as I thought it was, but traded the bias I heard from Kramer, CNBC, and in the news. I lost 36k, and this is when I joined Advanced Mentoring.

My investment in Advanced Mentoring (http://www.oexoptions.com/AdvancedMentoring/AM.html) shocked me, as it is expensive and you are very blunt, very focused, and are a clearly liberal and argumentative. You have not made me a cynic, nor do I think you are, but I you have made me learn to the core of my being where I have been falsely taught all of these years. There is no doubt for why you and your company are so well known.
You teach, care, and focus me. I am proud to be your student."

George J, Seattle, Wa"

_________________________________

I teach trading stocks and options so that I may teach myself each day what I have already learned, but could easily forget. This daily alert is how I trade stocks, options, currencies, and "think about the market."
I teach because I am a psychologist and enjoy seeing the human mind open up.
I teach because it stops me from making my own mistakes.
That should answer: Why do I trade?

"Make sure you have a jester because people in high places are seldom told the truth." - Radio caller to President George Bush.
I am that jester. You need me to help you see where you are lied to and how gullibility is so easily spread in the Murdoch nation.
__________________________________

The day after Labor Day historically the Dow has been UP 13 of the last 16, with major jumps in 1997 and 1998.

Gold At an Edge

2011-08-28T20:00:00.000-07:00

Things look better, the market began to rebound, and we were able to profit EVERY day on our call recommendations this week. Gold also hit the sweet spot twice and we were able to profit 40 to 50% on the same October Gold option in a 7 day period.

We see so many intraday reversals, all on "trigger news:" short term cycles may be up but we see a long term count, or cycle showing weekly cycles bottoming in October.

This means the "upside" we had from our shellacking this past month will only bring us the same old highs, and not near the highs we had reached.

Gold we see as "at an edge." As long as it doesn't close below 1736 (note close, not intraday swings) and if silver does not close below 39.40 precious metals are still in full gun and spirit and we don see any "top" being reach until perhaps the third week in September.

Our theoretical Dow projections were so uncanny this week that we hit almost each support and resistance line, and traders were able to make a living all week trading our OEX symbol or a stock. Remember, Dow projections work for the whole market and our pivot point calculators provided to you also work perfectly in short term or day trading a stock.

Study only a few stocks, no more than 50. Become expert at fewer than ten. This is pure Wyckoff, and we as traders seem unable to stop reading of new "great trades," or earnings reports.

if you have not learned by now that financial statements and earnings reports, audits and financial reviews can and often are completely falsified you have missed it all.

But how the stock is doing to me, or even what the stock is, is far less important ( as are most of the technicals) than the PNF on the chart and the long term cycle.

Ex: Oil looks on a downward cycle in down until November or early December according to the cycles. We would be testing lows at 82.20.

XOM is, as an example, only a few weeks from being a nice long term buy that we later buy options on.

Currency traders: we are often playing the Euro in Advanced Mentoring, and we are just beginning to follow more the Canadian dollar; we may be in a position to go long on this currency within weeks.

News Triggers

2011-08-22T11:36:00.000-07:00

*Historically the end of August has been stronger the last 7 years.

*Grundy said, "A small businessman is one whose business is not a "successful one".

*When everybody thinks alike, everyone is likely to be wrong

Let's start with a PNF chartist showing us how he sees what could have been our lowest low, or could be,and whether it is over or not".

Hello Floyd, the lowest we can take the weekly percentage P & F chart on StockCharts is .31% i know its hindsight but there what looks to be a fairly strong S & R back in April at the 10856-10590 area... Can look to at that and let me know your thoughts.. I feel if that bring down the weekly chart to the lowest percentage might give us stronger S and R lines compared to the Daily... See attached and let me know your thoughts...
-Thank you Derek

Effectively Derek has taught himself the Fibonacci retracement, in which we went to the lowest levels, something few of us thought, and brought up back, short term or not, to our 2008 lows.

There is something very wrong with our financial thinking and pledges when the market came from where it did to where it went. What is inherently different three months ago than today?

What news triggers OR market movers influence the market and we don't seem to even know it, or it happens faster than we can see, we are entering a new era.

We lead this week's commentary with two jobs:

1. Updating our charts to sold what sold at trailing stop loss.

2. Listing Dow Charts in PNF format, attached, to help you see where the market is.

Let's do that after this debacle before we even begin to analyze why.

I am surprisingly succinct and it's because I want a few more days of absorption; there is much on why our world economy is as it is, and solutions that are not just Keynesian.

When Michelle Bachmann is really a front runner I am now watching the news in almost a study of belief that she could even be considered. The plan is in place, the conspiracists say, as any President can be a puppet.

We will be much more detailed in thought to you this week when necessary.

Reader Disgust Series

2011-08-15T03:43:00.000-07:00

Commentary: Each week I try to pull a Reader Disgust series of articles. I pull these to read not to make any point, or to hone in, but to provide focus on reality. More and more our world lives in a sense of unreality. These articles are an important part of our commentary. As each Monday we send a more lengthy alert and commentary for the week the articles we pick are not filler, or just there to fill space. They are part of what I write.

THE RICH GET RICHER
http://www.huffingtonpost.com/2011/08/04/irs-incomes_n_918458.html

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Even though 7 trillion in wealth has vanished because of the housing collapse, we see further declines ahead. The Bernanke Bubble, as we used to call it, began around 1997; thusly prices could fall to 1997 records, another 30 or 40%.

If we examine the demographic situation, we can clearly see that the baby boomers, born between 1037 and 1961, have moved beyond their peak spending years of 46 to 50. They are no longer buying big cars, furniture, and exuberant Chinese drywall McMansions. And because of a birth rate from 1961-1981, the human beings who normally would be the buyers of the McMansions simply do not exist.

Not until 2023 should we truly see a low in U.S. real estate, as real estate seems to follow a clear 17 year old cycle. 2006+17=2023

What we are witnessing is nothing more than a generational shift in spending. The credit collapse will continue, as less spending by baby boomers means less demand and less demand means deflation.

I take this even further thinking the DEBT debacle merely exposed what has been going on nation by nation, all over the world, over the past 50 years; Keynesian economics is simple. Make more than you spend and you can borrow up to your ass. And it's what has been done.

He's also right: "stop revenue so that it exceeds projected debt and earnings" and debt will begin a cyclical decline that will only be righted by either "write off" or increase in earnings.

Why this country does not put WPA programs in, and who is stopping it (assuredly it is being leveraged out) astounds me. Simply use the government dollars to create jobs, "fix America", help us feel like a team and produce enough revenue to allow no debt ceiling.

Double whopper please, extra cheese.

________________________________________________________________________

99% of all analysts, traders, quantitative projections and stock technicians did not "catch" that the knife was gong to fall.
Many of us for months have said things about needs for change or improvement, but it was while Buffet was actually speaking and sharing the equity market was safe, and a bargain (and he's right) that the market fell another 500 points.

You don't need the history. More of our blood was spilled buying and selling stocks and bonds than ever before

________________________________________________________________________

You also do not need the facts of how fast, how deep, and ugly it was, but here's a few more pieces of Reader's Disgust to help you fathom:

1. There is a reason that Congress is paralyzed. You'll read my opinions later
Bernanke Seizes Day to Lower Bond Yields as Congress Shirks

Aug. 12 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke’s flattening of bond yields may be just the push investors and companies need to take risks with their cash.

The Fed’s decision this week to keep its benchmark interest rate near zero through mid-2013 sent five-year Treasury yields as low as 0.82 percent, below the 2.21 percent two-year rate before the collapse of Lehman Brothers Holdings Inc. in 2008. Lower returns on the safest investments will spur equities purchases, said David Kelly of JPMorgan Funds.

“The Fed’s making it extremely painful not to take on some risk,” said Kelly, who helps oversee $408 billion as chief market strategist for the New York-based firm. “People will tend to push money into equities.”

Bernanke and his colleagues acted days after a deal to raise the debt ceiling and reduce federal budget deficits failed to avert a cut to the nation’s AAA credit rating by Standard & Poor’s. The central bank’s decision, and a signal it’s willing to take further action, helped spur a rally in U.S. stocks from an 11-month low.

“This is aimed at encouraging people to leverage up, with the knowledge that their borrowing costs will likely be very low for a long period of time,” said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey.

The Standard & Poor’s 500 Index rose 0.5 percent to 1,178.81 in New York today, extending yesterday’s 4.6 percent gain.

Declining returns on savings accounts and certificates of deposit may encourage consumers and corporations that have been hoarding cash to start investing it, JPMorgan’s Kelly said.

Buying Back Stock

“The lower yields are, the more these companies are going to have an incentive to either invest directly in the stock market or even simpler, just buy back their own stock,” he said. “The incentive for a clear-thinking CEO must be huge.”

Companies stockpiled a record $1.9 trillion in cash in the first three months of 2011, according to the Fed data from June. Bank of New York Mellon, the world’s largest custodial bank, said Aug. 4 it will begin to charge institutional clients for “extraordinarily high” cash deposits to stem a flight of capital into the safety of bank deposits.

Americans saved 5.4 percent of their disposable income in June, the Commerce Department said this month. That’s up from a 5 percent rate in May and is the highest since September 2010. It was 1.5 percent in 2005, the lowest since at least 1959, amid the housing boom and 3.1 percent economic growth.

Certificates of Deposit

Savers are getting average interest rates on 6-month certificates of deposit this week of 0.58 percent nationwide, down from 0.60 percent last week, according to Bankrate.com. Rates on one-year CDs fell this week to 0.86 percent, while 5- year CDs fetched 2.04 percent.

The Fed said it would keep its target for overnight loans among banks at a record low for at least two years to support a recovery that’s “considerably slower” than anticipated.

Two-year Treasury yields have become the equivalent of short-term bills, with rates declining to 0.187 percent, about the same as the average yield on three-month bills over the past three years.

“The Fed has vindicated its power over the term structure of interest rates by being clear about the expected path of short-term rates,” said Peter Fisher, head of fixed income at BlackRock Inc., the world’s biggest asset management firm, who was markets chief at the Federal Reserve Bank of New York from 1994 to 2001. “It does encourage those looking for returns to look in credit assets and then further out the yield curve.”

Yields on investment-grade corporate debt average 2.01 percentage points higher than comparable Treasuries, according to data from Bank of America Merrill Lynch.

Operation Twist

The Fed’s action is reminiscent of a joint action with the Treasury Department known as Operation Twist intended to pull the nation out of a recession in 1960-1961. The Fed purchased longer-dated Treasury bonds and sold short-term bills in a bid to flatten the yield curve.

One difference, according to Fisher: Bernanke is trying to create very low short-term rates, while Operation Twist was focused on reducing longer-term borrowing costs.

The Fed’s action this week may also have another purpose, said Marvin Goodfriend, an economics professor at Carnegie Mellon University in Pittsburgh.

“It is mainly a signal that the Fed will do more, including buying government bonds, if the Fed believes the economy needs it,” said Goodfriend, a former research director at the Richmond Fed. The Fed in June ended a $600 billion bond- purchase program.

2. The swings took place for hedge and money market makers and was part of a conspiracy to prove the Democrats are incapable. We believe it was manipulated.
U.S. Stocks Slide for Third Week on Concern Over Europe, Economy

Aug. 13 (Bloomberg) -- U.S. stocks fell for a third straight week, including the biggest one-day drop since 2008, as Standard & Poor’s reduction of the nation’s credit rating and Europe’s debt crisis fueled concern the economy will falter.

The S&P 500 pared its slump in the last two days of the week as government data showed jobless claims unexpectedly decreased and retail sales improved. Bank of America Corp. plunged 12 percent, the worst performing stock in the Dow Jones Industrial Average. Walt Disney Co. sank 5.9 percent after posting disappointing third-quarter studio revenue. For-profit educator DeVry Inc. lost 23 percent, the largest drop in the S&P 500, after it said new undergraduate enrollment fell.

The S&P 500 lost 1.7 percent to 1,178.81 in the five days ended Aug. 12, capping a week of record swings. The Dow fell 175.59 points, or 1.5 percent, to 11,269.02. Both gauges have fallen for three straight weeks.

“Investors are going to have to get accustomed to above- normal volatility,” Leo Grohowski, chief investment officer for BNY Mellon Wealth Management in Boston, said in a telephone interview. The firm oversees $171 billion. “Economic uncertainty is going to continue to outweigh the good news from company fundamentals. We’re all hostage to the news flow out.”

About $6.8 trillion was wiped off the value of global equity markets from July 26 through Aug. 11 as Europe’s debt crisis deepened and investors speculated the economy may contract. The swings in U.S. equities this week were unprecedented in the history of the American stock market, according to data compiled by Birinyi Associates Inc., Bloomberg and Howard Silverblatt, senior index analyst at S&P.

Record Swings

The S&P 500 plunged 6.7 percent on Aug. 8, its biggest slump since December 2008, in the first trading session after the U.S. was stripped of its AAA credit rating at S&P. The index rebounded 4.7 percent the next day after the Federal Reserve said it will leave its benchmark interest rate at a record low through at least the middle of 2013. The gauge then fell 4.4 percent on Aug. 10 and rebounded 4.6 percent the next day.

Never before has the S&P 500 reversed moves that large in each session over a four-day period, the data show. This week’s trading also marked the first time the Dow moved more than 400 points either up or down for four days in a row.

“This week was unnerving,” said Channing Smith, a money manager at Capital Advisors in Tulsa, Oklahoma. The firm manages $920 million. “The large price swings are indicative of uncertainty in the markets, but we haven’t panicked. Our clients haven’t panicked. We used the market sell-off to go in and buy high-quality stocks. The economy is very sluggish and growth is below-trend but it’s still positive.”

Losses Pared

The S&P 500 rallied 5.2 percent in the final two days of the week, its biggest back-to-back gain since March 2009, as economic reports showed first-time applications for jobless benefits decreased 7,000 in the week ended Aug. 6 and retail sales increased the most in fourth months.

The Chicago Board Options Exchange Volatility Index, which is known as the VIX and measures the cost of using options as insurance against declines in the S&P 500, climbed 14 percent to 36.36 this week. The index surged 50 percent on Aug. 8, its biggest one-day gain since February 2007.

The rout in global markets spurred some Wall Street strategists and investors to revise their outlooks on equities and the economic recovery. Goldman Sachs Group Inc. cut its 2011 target for the S&P 500 on Aug. 5, while Laszlo Birinyi, one of the first investors to recommend buying when the bull market began in 2009, said his forecast for the benchmark equity index was “shaky.”

‘Uncertainty and Fear’

David Kostin, the New York-based equity strategist at Goldman, lowered his estimate for the S&P 500 to 1,400 at year end from 1,450. “Uncertainty and fear trump fundamentals and valuations,” Kostin wrote in a note. He said a recession is not “the most probable outcome in 2012.”

Birinyi, of Westport, Connecticut-based research firm Birinyi Associates Inc., wrote in an Aug. 9 note, “The bull market is intact, and while our ‘target’ of 1,450 in mid-2012 is admittedly a bit shaky, our more important conclusion that a rational, disciplined portfolio can attain a 10 percent plus return in 2011 is not.”

Birinyi also said financial companies are unlikely to outperform as the rally continues. Bank shares declined the most out of 24 groups in the S&P 500 this week, losing 1.6 percent, amid concern the European sovereign-debt crisis will threaten profits.

Banks Slump

Bank of America sank 12 percent to $7.19. American International Group Inc. disclosed plans this week to sue the Charlotte, North Carolina-based bank over allegedly faulty mortgages. The firm’s plunge in share prices over the past week stoked concern it may need to raise capital. Chief Executive Officer Brian T. Moynihan said on a conference call hosted by mutual fund manager Bruce Berkowitz that the biggest U.S. lender is being buoyed by conditions that are better than they’ve been since the credit crisis.

Citigroup Inc. retreated 11 percent to $29.85. JPMorgan Chase & Co. slumped 4.5 percent to $35.91. American Express Co. lost 4.9 percent to $44.89. Comerica Inc. decreased 16 percent to $24.41, the second-biggest decline in the S&P 500 this week.

Disney, the world’s largest theme-park company, slid 5.9 percent to $33.09 amid concern that slowing consumer spending and rising costs at the ESPN sports network may crimp profit growth. The Burbank, California-based company posted third- quarter studio revenue of $1.62 billion, compared with the average analyst estimate of $1.83 billion.

DeVry, AOL

DeVry Inc. fell 23 percent to $44.49. New summer enrollment dropped 26 percent to 15,566 from 20,935 a year earlier, the Downers Grove, Illinois-based company said.

AOL Inc. tumbled 27 percent, the most since it was spun off from Time Warner Inc. in November 2009, to $11.78. The Internet company reported on Aug. 9 a second-quarter loss and an 8.4 percent drop in sales. The New York-based company trimmed its weekly loss two days later, rising 12 percent, after announcing it authorized a $250 million stock buyback.

Speculation the economic slowdown will worsen has overshadowed better-than-estimated profit by companies. Per- share earnings increased 17 percent among the S&P 500 companies that have released quarterly results since July 11, according to data compiled by Bloomberg. About three-quarters of the companies have topped the average analyst profit forecast, the data show.

Cisco Systems Inc. rallied 7 percent to $15.99, the biggest jump in the Dow. The world’s biggest maker of networking equipment reported profit was 40 cents a share in the fiscal fourth quarter, beating the 38-cent average estimate by analysts, according to Bloomberg data.

“This is an exceptional buying opportunity for U.S. equities,” Barry Knapp, the New York-based head of U.S. equity strategy at Barclays Plc, said on a conference call this week. “The incoming data is going to be better, which is going to serve to stabilize the macroeconomic outlook and set the stage for a reversal in equity markets.”

3. S & P lowers our rating, others don't, and now is analyzing their analysis. This was purposed histrionics and pandemonium.
SEC Said to Scrutinize S&P Math, Possible Leaks of U.S. Rating

Aug. 13 (Bloomberg) -- The Securities and Exchange Commission is reviewing the method Standard & Poor’s used to cut the U.S.’s credit rating and whether the firm properly protected the confidential decision, according to a person with direct knowledge of the matter.

SEC inspectors are examining S&P’s policies for conducting such analyses and whether those procedures were followed when the New York-based firm downgraded the U.S.’s credit rating Aug. 5, said the person, who declined to be identified because the inquiry isn’t public.

S&P’s downgrade of the U.S. for the first time triggered an equity rout that wiped about $6.8 trillion from the value of global stocks from July 26 to Aug. 11. U.S. officials have said the downgrade was based on a flawed analysis which overstated U.S. debt by about $2 trillion, while S&P said the discrepancy doesn’t change projections that the U.S. debt-to-gross domestic product ratio will probably continue to rise in the next decade.

The rating company lowered the nation’s AAA grade to AA+ after warning on July 14 that it would reduce the ranking in the absence of a credible plan to decrease deficits even if the nation’s $14.3 trillion debt limit were lifted.

The decision was at odds with the other two main ratings companies, Moody’s Investors Service and Fitch Ratings, which both said the U.S. continues to deserve the top credit rating.

Possible Leaks

SEC staff are also looking into whether certain market participants learned of the downgrade before its announcement. The inquiry, which is in preliminary stages, may not result in a referral to the SEC’s enforcement division, the person said.

Ed Sweeney, an S&P spokesman, said the firm doesn’t discuss specific interactions it has with regulators.

“S&P takes its confidential information and securities trading policies, and the related securities regulation, very seriously,” Sweeney said in a statement. “Our policies prohibit analysts or rating committee members from trading and holding securities or options of the companies or governments they rate.”

Sweeney said the firm has “long-standing policies and procedures in place” to protect confidential information. Sweeney also said the firm had previously indicated in a July statement that there was a chance of a downgrade.

S&P “published several reports and broadly communicated our views regarding the potential impact on other fixed-income securities,” the statement said.

‘Market Turmoil’

The rating downgrade added to concern about prospects for the global economy as Europe’s debt crisis deepened. U.S. stocks fell for a third straight week, with the S&P 500 losing 1.7 percent to 1,178.81 in the five days ended Aug. 12, capping a week of record swings.

Treasuries rose, with ten-year yields falling as much as 52 basis points this week, the most since December 2008, and signaling the lower rating hasn’t reduced confidence in the nation’s creditworthiness. The yield declined nine basis points to 2.26 percent as of 5:02 p.m. yesterday in New York, according to Bloomberg Bond Trader prices.

The downgrade followed an Aug. 2 agreement among U.S. lawmakers to raise the nation’s debt ceiling and put in place a plan to enforce $2.4 trillion in spending reductions over the next 10 years, less than the $4 trillion that S&P had said it preferred. The political wrangling that preceded the debt pact was also a concern, S&P said.

The “debate this year has highlighted a degree of uncertainty over the political policymaking process which we think is incompatible with the AAA rating,” S&P analyst David Beers said on an Aug. 6 conference call with reporters.

‘Quadruple A’

Former Treasury Secretary Henry Paulson said he would invest in U.S. government securities before other sovereign debt even though the nation’s political process isn’t working as well as it could be.

“Our political process, our government, hasn’t been working at a AAA level,” Paulson, 65, said on Aug. 11. “I would take U.S. Treasuries over other sovereign debt, other AAA sovereign debt, any day of the week. That’s not to say we don’t have important issues to deal with in this country.”

Warren Buffett also criticized the rating company’s decision, saying the U.S. merits a “quadruple A” rating, in an interview with Betty Liu of Bloomberg Television.

‘Some Spine’

Bill Gross, manager of the world’s biggest bond mutual fund, said on Aug. 7 that S&P “demonstrated some spine.” The manager of Pimco Total Return Fund has said that Treasuries are unattractive because yields don’t offer enough compensation for the risk of inflation.

Still, U.S. bonds remain in demand at a time when Europe’s sovereign debt crisis threatens to spread to Italy and Spain from Greece, Ireland and Portugal. The Treasury’s Aug. 9 auction of $32 billion in three-year notes attracted $3.29 in bids for each dollar of debt sold. Indirect bidders, the class that includes foreign central banks, bought 47.9 percent of the issue, the most since May 2010.

4. The European debt crisis, and the devaluing of currencies, has the pee partiers thinking our "sovereign debt" is some big deal (it is only if use it against ourselves), yet we buy Gold and Silver and worry about our own USD.
It makes it worse:

European Bank Troubles Demonstrate Cost of Uncertainty: View

Aug. 12 (Bloomberg) -- Financial markets’ growing concern about the state of European banks exposes a reality that the political theater in the U.S. had obscured: The euro area’s debt troubles are probably the single largest threat to the global economy.

The share prices of European banks, and in particular France’s Societe Generale SA, have plunged in recent days as investors speculate that the banks could be facing investment losses and difficulties borrowing money. SocGen has denied the rumors, but the nature and veracity of the specific concerns is almost secondary.

European leaders have created a fertile ground for panic by failing to dispel the main uncertainty: How they will resolve the financial troubles of strapped euro-area governments, how much banks holding the governments’ bonds stand to lose as a result, and whether the banks can be bailed out.

Investors’ dark view demonstrates how costly uncertainty can be. Consider, for example, the market value of bank equity compared with how much the banks say they’re worth in their financial statements.

As of Thursday, SocGen’s market value stood at only 52 percent of tangible common equity, suggesting that investors think it will need about 16 billion euros ($22.8 billion) in fresh capital to cover losses, according to data compiled by Bloomberg. For a group of 31 European banks, the market-to- tangible-equity ratio was just under 70 percent, implying they collectively face losses that would require some 137 billion euros ($195.1 billion) in capital to offset.

Money-Market Funds

European bank troubles matter for the U.S. and the rest of the world, in part because the money-market funds in which millions of U.S. households keep their savings have invested heavily in European bank debt. Trouble at money-market funds would disrupt the short-term lending markets on which U.S. companies depend to pay suppliers and their own workers. Much as after the Lehman Brothers Holdings Inc. bankruptcy, the resulting credit freeze could force companies to slash production and fire workers, triggering a sharp recession in the world’s largest economy.

Ideally, Europe would conduct stress tests showing exactly how much banks can lose and immediately announce how they will raise the necessary capital, much as the U.S. did in 2009. But no stress test can be credible until European leaders own up to the fact that some governments can’t pay all their debts, define the losses investors will take and put a system in place to guarantee the debts that can be paid.

As Bloomberg View has advocated, the best route to clarity -- and stability -- would be for all the governments of the euro area to issue new bonds guaranteed by a unified finance ministry with taxation power. Investors would exchange the debt of individual governments for the euro bonds, probably at discount rates that would erase some of the debt at the investors’ expense. The remaining sovereign debt would be sustainable. Banks and investors would know the extent of their losses.

It won’t be pretty, but ultimately the bloodletting will have to happen.

You have read enough to now let Floyd up on his soapbox to share with you how we continue to try to destroy our own world:

1. As Roubini stated, "nothing was fundamentally different than three months before. It appeared we would hit a boundary and massive lots were sold, to later be bought, by less than 10 hedge funds." "This appeared to be a "massive short" with a falsified upside to rape anyone near by trying to trade".

2. As Nenner stated" The market is certainly not good, but it is not this bad. We are seeing political turmoil in the U.S., and manipulated games, control the price of assets.

3. As Floyd believes: The Republican Party, since the day Obama was elected, have worked for four years to do nothing but make sure he is not re-elected and that the massive changes he has tried to lead through are all stymied.
Republicans do not want to tax the rich, but tax the middle class more. The goal is to eliminate the middle class so they can quit wasting time fighting and explaining. The poor are under their control.

I stand aghast while I see sold social (not socialistic) programs be attempted. The entire FDR/Truman WPA program now being pushed by some Republicans is right yet fully ignored and destroyed as a bill year 1.

We have a small group of men and mean women that lead this party, and thusly even the party is so stupid they aren't guilty trying hard to create a world council for oligarchs.

This I believe

_____________________________

I also have faith at some point the American people have enough smarts to throw the pee partiers out (originally hired by the Pubsters and now backing up and messing up some of the Republican fascists plans. I name call was purpose. These people do not want to allow a majority in control and they can actually make people believe that the Democrats want to take money from the rich and give it to the poor, NOT what is being proposed.

____________________________________________________

The Violent Selloff

2011-08-07T16:22:00.000-07:00

Commentary: Let us begin the most violent week in recent market history. Both of the attached Bloomberg articles summarize well:
Making Sense Of Thursday's Violent Market Selloff

and

THE RICH GET RICHER

http://www.huffingtonpost.com/2011/08/04/irs-incomes_n_918458.html

Historically August has been the worst Do month from 11988 to 2005, but was up the last 4 years.

And for today: The average man is always waiting for something to happen to him instead of setting to work to make things happen. For one person who dreams of making 500000 lbs, a hundred people dream of being left 50,000 pounds.-AA Milne, author of Winnie The Pooh

_______________________________
Market makers speculate in large blocks using computer algorithms to buy 10000 options in Apple so that they can sell proportionately the same proportionate number of contracts; they electronically manipulate the market
__________________________________________

*The world is not in any form of balance and in down cycles, this is bad news. The market was fully invested when this happened, showing that not many believed or saw what was to occur.
*If the S$P bottoms near 1139 or the Nasdaq near 2200 we'll continue in weekly negative cycles for several weeks, with only the chance of a bounce.
General Projections: Gold is only showing weakness, in spite of a negative cycle, but is only a sell cycle at 1625; Silver continues to hold up. It's a sell signal if it closes below 39.

SEPT crude his 86.50. It may short term bounce but even oil looks as if it down.

We have taken profit in the past week in all our U.S. Bonds. Let's use Nennner:
30 year-tops at 142 could hit 148
10 year-tops at 132.20, could hit 134
5 year upside to 124

Natural Gas remains just an overall short term crap investment. It can't break it's own pattern.

_________________________________________________________
Quite simply we have shit in our own shit. And walked all over the stuff for years, beginning to even think that plastic purses were worth $600. And that the same rich people, that we are making richer.

I will take me sometime to overcome what we have done too ourselves as a nation. There is little to say but to begin to regroup, and to wonder who did it to us.

Take especially prudent risk.

At Times I am Ashamed of Us

2011-08-01T08:28:00.000-07:00

From Trader MP:
How are you my friend?

long time no speak....

I just came across this article and had to throw it your way..

I honestly cannot take anything that this man writes about as having any value..and he is a noble prize winner? What a joke!!

To honestly think that the price of gold today has any relation to Glenn Beck is complete lunacy...

This guy ALMOST sounds as foolish as Bernanke the other day when he said that "gold is NOT money..."

Can you believe Bernanke actually said that?

Anyway..your boy Krugman is at his finest here!

Honestly...how can anyone actually give this man any credibility after a brief article like this?

http://krugman.blogs.nytimes.com/2011/07/19/the-glenn-beck-debeers-connection/
My response:

I agree
Bernanke is dead right
Krugman gets the game
Most don't

We will worldwide live in printed money
And deficit limits will be ignored

Nothing the republicans have said has even made sense
I was hopeful when Obama and boehner met privately

This is all about how far the bankers do it

Read krugman books not lines from a section

Murdoch. Hmmm fox news and the wan and barrons

Listen to understand. Not to be understood.
MP Responds:
seriously...
I mean seriously...

how can you possibly say that Gold and silver are NOT money...

What is "money?"
And my final response:
Whatever value is put on something. At one time long ago it was beads, later precious stones, than precious metals. Money is not real. This is my point for all the time. We put value on something that doesn't exist.
We created the term and value for money.
Learn this and you'll trade like a hawk.

Thanks for allowing me my first "non input" week off; no email, phone, data projections or charts.

My only input was the reading of propagandist Murdoch's Wall Street Journal, and the occasional news.

Last week followed the the same cycle wave on the Dow within a point and figure chart as have the last 6 weeks, and we have remained in the same trade range. We exited last week near to the bottom of that cycle, with a market completely hypnotized by our debt ceiling.

_________________________________________________________________________
Whenever you learn that money itself is not real you will have mastered the market.

We actually have the layman, you and I, reading or watching Murdoch TV or press, or listening to news input and believing false facts. And the parties are playing games right to the end to the end to influence their members.

I am embarrassed often to admit I live in the U.S. (I know I will receive some bumpersticker now "If you don't love the USA, leave it," and I also know this person will be able to vote also.)

So, like me or not:
*The Republicans, led by the Pee Party, are being ridiculous assholes, and NONE of the things they are demanding (even if it all passes) will ever truly STAY in reality. It may start that way, but it won't last.
*The Democrats (Obama) is playing a true war game just as he did with Osama, and will not blink.
Any compromise will truly be "win" for Obama, although it may cost him the election.

*Bush lowered taxes and we have not raised them. So why aren't there more jobs? Wasn't that what he said?

*Why are the rich getting richer? Corporations doing magnificent, with massive amounts of cash?

*Why do we as people not see the oligarchs are praying for the Republicans, as it creates more serfs, and makes them richer.

It's why I had to take a week off. I hate stupidity and this is stupid.
_________________________________________________________________________

I am unable to argue with illogic. "The Republicans stopped the speed train money, so we'll save 5 billion." "We have to quit giving to people, and make them get on their own."
And I am afraid I will say something so angry that subscribers will leave, so instead I left.

Good luck with how you interpret this all. You have been lied to for so many years

_________________________________________________________________________

A diluted bill will pass. The market is already prepared. I believe the Pee Party will finally pee on themselves and destroy much of their own party. And that Obama will pass most of what he needs. And that the market will go up substantially, within whipsaw, near and even above our market tops.

Our risk will be a play only to the call, to an August issue, with two buys, no butterfly or straddle hedge, and a winner/loser takes all.

We believe the entire concept of the deficit is false and should be eliminated.

Nor do we believe any foreign entity, already close to default themselves, allow such foolishness.

Just say it aloud and you know: Michelle Bachman could actually be President.

At times I am ashamed of us, fat, greedy, and ignorant.

Bubbles to Business

2011-07-24T10:34:00.000-07:00

Even though Floyd and family are basking in a quiet island paradise this week and you will NOT be receiving daily alerts with his commentary, I could not help but to allow my weekly rambles. So, first, on bubbles:

The New Life Cycles of a Company

Dr. Adizes is one of the world's leading experts on organizational performance and change. TEGLLC, the parent company that owns OEX and BCO Options is a full service consulting company that has used his seven- step cycle of how an organization performs in various stages in all of our business development and restructuring programs.

With "bubbles" to business becoming more frequent, note that they follow the same predictable cycle. With a "bubble" (Internet, social networking, etc.), however, and there are four (4) stages:

1. Conceptual Stage- In a bubble companies are formed and consumers show high interest in the product or service.
Recent examples of “bubble euphoria” are Facebook, Pandora, Linked In, and the variety of social networking platforms.
In the latter portion of the conceptual stage users begin to truly accept the new technology. They incorporate the technology into their daily life and become avid users as well as often becoming "evangelists" for the technology.

2. Hypergrowth Stage-By now consumers are fully on board and investors begin to take notice. Here is where IPO's are hatched, and the money raised is then plowed into new growth initiatives. Here's where investors can make the most money, and also the period where skeptics are the most vocal.

3. Maturation Stage-This is when companies begin to see market saturation and growth levels out. Profit growth does not contract, but growth levels turn to more normal rates of return. Companies are actually more stable at this stage, but it's more dangerous in investing as stocks are trading with high multiples while growth is much slower than it has been in the past.
This is the bubble. Investors typically pay premium prices for non-premium stocks.

4. Contraction/Completion Stage-During this final stage pure cutthroat capitalism comes into play. Prices are driven lower, and profit margins are crimped. Now investors begin to realize that they are paying a premium price for a not-so-premium company. This is the period where we see earnings expectations drop and price multiples decline, and where we see more investors "fight" that this is occurring and lose all of their gains.

One Question: The stock you own in the bubble: What stage is it at?

Traders were able to sell their January 2013 AAPL Call for between 40% and 80%.
When we first bought this long-term call AAPL dropped 23.4%. Many traders doubled their position, and our recommendation. If they held thru July 20th their returns were between 40 and 80%.

For any of you that own a Microsoft based product as compared to Apple I would love to know what it does that an Apple cannot do? I wonder when companies receive 91% positive consumer rankings, as Apple does, while Microsoft receives a 31% rating, why someone would not change?
It is much like question of “what is in the Constitution”? How many of us have actually read it? This clearly relates to illogic, the Floydian defined condition where despite facts nothing changes. People misinterpret the obvious, believe it is real, and defend a position.
Pee partiers come to mind.

We need not fear that China will pull up its’ stakes in our debt. They are our largest single creditor, are fearful of what we do but have little choice but to buy, continue to buy, hold, and grumble. This is the ultimate “too big to fail” global relationship.

Illogical Logic

2011-07-16T14:28:00.000-07:00

Commentary: We are a company taken over by MBA's. It is the baby boomers, hot to trot with the big business degrees, that have categorically taken a supply and demand/cause and effect based economy world wide and have systematically taken industry and manufacture not first in the line.

The more I read of Madoff the more I see that MBA logic purveyed a sense of illogical logic, a Floyian term for where something that makes no sense is explained by the water in a glass jar and that there will always be.

Madoff traded fake large blocks of OEX Options for profits. There were no such options being sold in this volume and no one checked. He said "somone has to pay for being stupid" and sinner that he is I smile.

The facts weren't checked. And if they had been, or if they were being, it was through illogical logical.

We have been living on what is not real, thusly buying what we have created that is falsely real, and the very jobs we scream for we have taken away from ourselves.

Do I Not Love Myself?

2011-07-10T17:03:00.000-07:00

We all know about yet another week of massive whipsaw, all within our Dow Projections, and profitable for us on all trades we made in the OEX.

We all know Floyd has been laying low on new stocks or options for Blue Chip Options, preferring to buy more of certain issues on the down stroke. A great example in our Jan2013 AAPL call when dropped 24% after our first buy. I bought twice as many, lowered my cost, and just sold the position for a 40% sale.

Most traders never follow I buy LEAPS not just to hold them, but also to buy them on the down stroke, if I see the are ripe again for an upstroke.

Often we speak of Richard D. Wyckoff, the famed trader that my Dad, with Wyckoff Associates, Inc. was the sole licensee of. I grew up studying Wyckoff, and continue to highly recommend Charting the Stock Market: The Wyckoff Way.

Jack Huston, President of Stocks and Commodities Magazine but the actual writers edited this book were two young men that worked for my Dad when I was growing up. They know their stuff. The following website is from another Wyckoff student and worth your reading

http://www.readtheticker.com/Pages/Blog1.aspx?65tf=267_wyckoff-20-for-the-21-first-century-2011-07

Then, for those of you that follow and study the internet portion of technology - a great article on what some of these companies are and will

http://online.barrons.com/article/SB50001424053111903404604576405802487034120.html

________________________________________________________________

A subscriber this week wrote me a lengthy email crying out for help, which I’ll simply paraphrase.

“-Do I not love myself? I fail at this trading no matter how hard I try. Am I setting myself up for failure, or how can I stop myself”

I gave this Advanced Mentoring subscriber my point of view and he sent it to a friend, a clinical psychologist who specializes in sports medicine, and our subscriber sent both his commentary, and mine, and here is how his Dr. responded:

“Well written emails to Floyd that clearly capture your dilemma. I read a great chapter recently in a sport psych book titled “Try Easier”. The thought behind it is that when we try too hard (as you reference with regard to baseball… and perhaps the market too?), our performance actually suffers. The suggestion is to back off a little bit (go at 90% intensity instead of 100%) and you actually perform better. Physiologically when we try harder it’s like stepping on the gas and brake at the same time… our muscles work against each other.

One thing that needs to change is/are your expectations of yourself. Perfectionism, in all its forms, is nothing but a set-up for disappointment. Unless you have complete control over all aspects of the situation, it’s difficult to expect everything to go your way or as planned. In sport and trading, so much of it is beyond your control. All you can do is decide when to get in and when to get out, what happens in between is uncontrollable, therefore not worth focusing on or trying to control. You will drive yourself nuts trying to control the uncontrollable.

Question… to what degree are you influenced by being perceived by others as a “successful trader”. Do you want to be able to tell people that you scored big and out-smarted the market. Somehow, this matters?? Truth is, nobody cares one way or the other. I believe people would be just as impressed hearing you made $100/day for 10 consecutive days rather than scoring a $1000 trade on 1 day.

The difference between you and I is that you have a lot more riding on the market than I do. The other way to say that is I am less dependent on making $$$ in the market and see whatever I make as gravy… I don’t NEED to make money there, I would like to, but don’t need to. For you I think it might be different. There is a pressure there to make some money… not sure if it’s self-imposed or what, but it’s like you have to win big or it’s all for naught. The joy can come from executing you plan precisely, not whether it nets you 2K or 5K. The gains will add up…if you let them!!!”

This psychologist has it spot on, and each of you should print this and frame it.

The primary failures I see in traders that I work with is that “they expect too much money” and are waiting for “more”, only to see it all erode.

Our success has come from:

1. Trade by rules

2. Never make too much money. Be happy with small 20 and 30% earnings most of the time. There is no place else in the world you can earn 20 or 30% on money invested, sometimes several times a day, with your only overhead being cash.

3. Not listening to talking heads, news, or predictions. Studying only the FACTS.

Here’s an example: last night (7/7/11) ABC interviewed Maria Bartirimoro.

http://en.wikipedia.org/wiki/Maria_Bartiromo (Really read about her background)

Cute, able to articulate well, and after the question “is it likely that we will repeat a second full recession because of the high unemployment figures, and struggling economy. Maria, probably making a million a year for her opinion, very articulately points out from a chartists perspective that “yes, it is indeed possible”….she then gives a few reasons….and looks very serious as she says “Americans must be prudent at this stage”.

Please excuse me while I climb up the soapbox and respond:

What the fuck? Any child could tell us the market could go up or down and that things look bad so they could get worse. And another child, taught only to see that we have returned the stock market from lows never seen before 4 year ago to near 13,000.

I sit there seething because I can see Joe and Jill at home listening to that smart financial lady telling them that everything could be worse.

Pure unadulterated histrionics. Perhaps Maria even suffers from:

What is histrionic personality disorder?

Histrionic personality disorder is one of a group of conditions called dramatic personality disorders. People with these disorders have intense, unstable emotions and distorted self-images. For people with histrionic personality disorder, their self-esteem depends on the approval of others and does not arise from a true feeling of self-worth. They have an overwhelming desire to be noticed, and often behave dramatically or inappropriately to get attention. The word histrionic means “dramatic or theatrical.”

This disorder is more common in women than in men and usually is evident by early adulthood.[1]

My point is that we believe what we read or are told, and it soon becomes true.

Mass mesmerism: mes·mer·ize

[mez-muh-rahyz, mes-] Show IPA

–verb (used with object), -ized, -iz·ing.

1.

to hypnotize.

2.

to spellbind; fascinate.

3.

to compel by fascination[2]

Study real facts. Maria is cute, but she does not even have the educational background, so noted, to be making these statements.

[1] Wikipedia-Cleveland Clinic

[2] Dictionary.com

Two Weeks Ago, the World Was Ending

2011-07-04T13:20:00.000-07:00

Two weeks ago the world was ending. We had dropped below 12,746, the Fib retracement line, and all the indicators (that we chose to read to Michelle Bachmann style) pointed us to massive downsides on Greek debt, the end of the Euro, ad nauseum.

We at OEX and BCO were buying calls on the OEX and adding to our longer term Blue Chip calls, and ignoring the doomsayers. To be fair to those that promote conspiracy and see “the inevitable occurring” because we have sinned (what most doomsayers choose to be, we published an excellent article by Porter Stanberry, owner and purveyor of many different financial newsletters, and very well regarded.

This leads to an Advanced Mentoring student, my friend MP, who suffers from the pain that “all this sinning” must lead us to the end of the world, and all that he has studied proves we are on the long lost track.

An excellent example of illogical logic, the basis of much thinking:

*Fact: no paper currency has ever held up in the world. All have fallen and collapsed. This is absolutely true.

*Alternative fact, often forgotten: Nothing else (precious metal, diamonds, or beads) has held up either. Every form of value we have created has been destroyed at one time of another.

So, here’s MP on Friday:

________________________________________________________________

“Also.How much stock do you put into that Porter Stansberry article? The doom and gloom guy? Talking about the Euro not being here in 6 months and that we are gonna have a worse crash than we did in 2008?

And lastly...you keep mentioning silver being manipulate in the "short term" b/c of solar panels.

What do you mean "short term?" 1-2 years? Eventually when and if these currencies collapse...there is no way "they" are gonna keep silver down...people will buy it and take physical delivery of it...

The markets won't be able to stop it.that's just what I think”

And from Floyd in return:

You create conspiracy and conjecture. You are assuming many things

1. Nothing had changed when the market dropped a 1000 points, so why would you think it would change when the market went up?

2. We own a MOAR basket that owns Italy and Spain. These were the worst performing ETF’s of 2010 and we bought them with the two top performers. The world will not let Italy and Spain disintegrate. Here’s why: If you have been to Newark or Trenton, NJ you might agree that they are sad blights of landscape on our society. Italy is my favorite country in the world; filled with great fashion, true history, great food and people. Something will change

3. Nothing is legit. The drop wasn't legit; it's just the cycle of the market. We seem to believe the negative in the U.S right now, but not the positive

4. The experts have no idea what is going to occur in one month. The IMF guy that was in trouble for the sex thing; I’ll bet he's the next President of France and the woman put in IMF is to support him. The experts don't say this. It’s got a high likelihood

Read experts, not papers, not TV. Intellectual thinking helps one through the “fuzz of inarticulate journalism”. And the journalists are NOT at fault. They report what they see, and Murdoch tells them what they can print or announce. This you should be worried about.

Method of the Market

2011-06-25T04:17:00.000-07:00

Please work through this commentary on all of the sides of the stock market, and the spiritual and dramatically world changing event occurring in the Nano second. There is no idea of the input we receive in bytes and that reality to some seems secondary to what we are living.

First Trader Alan, our Dice Roll Basket founder sent me one of the most exciting and spiritual videos I’ve ever seen, so let’s start the “method of the market” with this:

A must see video:

www.flixxy.com

http://www.flixxy.com/bear-animal-nature-film.htm

The markets have ‘almost broken” down many days now, always to be led by a savior, Friday being one of the most brilliant economic and political blows made, using the oil reserves, and controlling the false pricing that permeate what we do.

Friday’s oil move will not be seen to full effect for months but is an economic answer that doesn’t add to our deficit (what people are falsely concerned about).

Chartists were interesting in how they see the lagging indicators of the day:

-- THURSDAY'S LATE STOCK BOUNCE KEEPS 200-DAY LINES INTACT

-- NASDAQ ACHIEVES UPSIDE REVERSAL

-- DAILY MACD LINES ARE TURNING POSITIVE

--FINANCE SECTOR LEADS THE MARKET LOWER

-- MATERIALS SPDR FIRMS AT SUPPORT

-- TECHNOLOGY SPDR TESTS DOUBLE TOP SUPPORT

-- ENERGY SPDR FALLS WITHIN WEDGE

-- MARKING KEY RESISTANCE FOR THE DOLLAR BULLISH ETF

-- 13-WEEK TBILL YIELD FALLS TO 2008 LEVELS

___________________________________________________________

In this game, the market can keep pitching, but you don't have to swing. You can stand there with the bat on your shoulder for six months until you get a fat pitch."-Warren Buffet

As the market hovers at the 000’s there is growing bad news, risk to the upside, but a very strong that some event or “news” triggers a move up. Funds have now sold out for the quarter, locked profits and we are at our near a superb place to buy in stocks and bonds, and all of our portfolios. We remain up as of 7/3/11 27.45% in stocks and bonds, NOT including dividends or capital gains (most of our recommendations reward with dividend).

We hold all long term 2013 stock options right now, all down, and all traders should use either the 20 or 25% trailing stop loss model, OR the PnF support and resistance model.

Things great or things right in the crapper.

S&P over 1300

Nasdaq above 2280

Dow above 12190

Each triggers general buy signals, but gains may be less than 400 to 500 points at high risk.

A Market Collapse Without Fundamental Change

2011-06-12T09:54:00.000-07:00

Monday of Triple Witching Week, Dow Down 8 of Last 13. Last week, an almost 1000 point drop from market highs, and a market that closed below 12,000. I repeat: what is fundamentally different than three months ago, and the answer is easy: NOTHING >> we knew about the economic woes, the overall unemployment issues, the fact the Greeks are worse with faking numbers than even we are, and Obama, again to blame (we must NEVER blame ourselves) drops from an 81% approval rating (we love KILLING), to just under 50% (we want to keep everything and bear no loss or pain). What is different is this:
1. We need to be afraid, and this provides a good trigger.
2. Market makers are forcing a massive sell off to lock in good profits for the quarter and earnings reports. At a point when fear is growing the most they will stampede us back to high numbers. Or, as the pessimists say, "the economy is not fixed," and the reality of this truly stupid statement allows market indicators this week to truly shudder the market. Either could happen
And with just how bad I've done for you in two trades recently letters like this from Ted B help me know what it's all about. Two weeks ago we made money 4 of 5 days on calls as the puts took over, and suddenly had our first stop loss Friday, and have an open position that traders are fearful about.
The truth be told: there will be times you do lose money trading stocks and options.

Much of our services, now combined, is a typical hodgepodge of Floydian articles and movies, in no order of coherence. We'll try to be helpful this week outlining how we work from several systems. Letters like the one below from "Ted" are the only reason I do this.

"Hi Floyd,

I think that you are, simply, the best.

A professor once stated that he intentionally put all the cookies (subject information) on the bottom shelf (methodically presented and easy to grasp), so all could reach them. I remember his statement, but I also, remember and use most everything he taught me. If there is anything better for a teacher to hear, then I don't know.

As someone that has traded for almost thirty years, spent unknown thousands, and in times past - lost more than you confessed, I believe my opinion is educated, derived by critical observation, and validated by experience.

However, you know my opinion is just an opinion to another trader, but to a teacher, its more. So, teacher, I believe you are the Professor of Trading. Your method of teaching is equal to your method of trading. And, its greatly appreciated.

I've been wanting - when I had the time - to ask you about Puts.

You do not always make use of Puts in a down cycle because,..... . I think I know, in part -

1) because the natural movement is, up, and the Call accelerates quickly, thereby making it possible to reach the profit target even in a downward market swing, (on the bumps), and
2) because the market makers are pushing to move the market, up - not down, and
3) more open interest and volume, and
4) or 1) if all the above is incorrect.

Lastly, sometimes I wonder if you and I are living on the same planet. Its a good thing to get your comments of current events. Stimulating one to critical thought and/or dialog is very beneficial, and I am glad you do this. I do not consider myself a Democrat, Republican, Libertarian, Progressive, Independent, or anything else. I have and will vote for any of them based on integrity (if that's possible with a politician), ability, and agenda. I cannot say that I am a conservative, liberal, socialist, etc., but because it comes down to the two rich major parties, we are forced to compromise, every time.

I find it very difficult to believe that you believe, that nothing has change - I think you said - from three months ago. What? Floyd I know that you know how long it takes the people as a whole, to respond, intelligently. Don't laugh, I come corporate America, and I have learned first hand that when upper management under estimates the masses, you will fail. They are intelligent, but so slow to respond - which is another subject that I could write a book about.

Educated and responsible people have reached their saturation level - that's what has changed.

When it comes to the trading world, I have yet to talk to another trader since August 2010 that does not believe this market is being totally manipulated - its insanity. They stole your money, used it to run up the market and profited by your money on the way up, and are very near to profiting on the way down, and you don't get your money back.

You're right, its not President Obama's creation, but he will, more than likely, be blamed.

I listen to your thoughts and then I listen to these, http://www.fourwinds10.com/siterun_data/government/new_world_order/news.php?q=1307665750 what is it, a man should believe,
or this, if you're up to it, http://alcuinbramerton.blogspot.com/2010/10/world-global-settlement-funds.html.

Thanks Professor - all to stimulate - respectfully and appreciative to you, Floyd.

Ted"

The market collapse has occurred without fundamental reasons for change, and I believe we are dealing with a politically and hedge fund sell off on shorts. No major changes in the economic fundamentals, folks, so my little conspiracy based mind begins whirling.

The facts however we list well below in our Dow Projections and economic calendar, which is heavy with news this week.

When the S&P closes above 1287 we will see optimism. Watch the NASDAQ at 2340 down to 1266, and the Dow at the Fibonacci edge of 11,746.

Two Testimonials

2011-05-30T09:16:00.000-07:00

Two OEX Testimonials explain perfectly how our system works. Read them carefully as these men are successfully becoming traders:

“I realize now I don't have to hit a home run every trade. I gained $1700.00 this week targeting 10 and 20%. I will keep greed out of my trading decisions. I have also employ risk control, money management, and position size. I am keeping a trading journal of the good the bad and the ugly. I think the light bulb finally click onto think you have had everything I needed right in front of me.

One week doesn't change a lifestyle but I am in it to win it.”

“Floyd,

I sold all of the contracts for a profit of $1 each contract and I am walking away with a cool $8000 in a week. Frankly, I did not know how to trade today with the futures staying mildly up but the commodities staying up as well. So I decided to stay conservative and sold during the first half hour as the Dow was closer to R1. I was not sure if it will go past R1 but apparently it did. I still have to make simple adjustments as to how I am trading and clarity is only getting better. This is not possible without your valuable service and help. It is amazing with your position on a call when the market has only somewhat stayed down the whole week but yet so many people seemed to have made money including me ;)

Thanks,

LK

Market Study

Gold mining stocks will grow the most with any upswing to precious metals, and we already have a holding in Canadian Exchange Fund and a long-term call in SLW for silver.

GDX is a buy and hold. Close eyes. Please note this chart was prepared on 5/22/11. How is the stock performing?

How Heavy is a Glass of Water

2011-05-22T14:01:00.000-07:00

This next article is schmaltzy stuff. I bow as I pro-offer it as truly it says it all and should be lessons we learn.

Just A glass of water

A young lady confidently walked around the room while leading and explaining stress management to an audience; with a raised

glass of water, and everyone knew she was going to ask the ultimate question, 'half empty or half full?'..... She fooled them all...

“How heavy is this glass of water?” she inquired with a smile.

Answers called out ranged from 8 oz. to 20 oz.

She replied, "The absolute weight doesn't matter. It depends on how long I hold it. If I hold it for a minute, that's not a problem.

If I hold it for an hour, I'll have an ache in my right arm. If I hold it for a day, you'll have to call an ambulance. In each case it's the same weight,

but the longer I hold it, the heavier it becomes." She continued, "and that's the way it is with stress. If we carry our burdens all the time sooner or later, as the burden becomes increasingly heavy, we won't be able to carry on."

"As with the glass of water, you have to put it down for a while and rest before holding it again. When we're refreshed, we can carry on with the burden - holding stress longer and better each time practiced. So, as early in the evening as you can, put all your burdens down.

Don't carry them through the evening and into the night... pick them up tomorrow. Whatever burdens you're carrying now, let them down for a moment. Relax, pick them up later after you've rested. Life is short.

Enjoy it and the now 'supposed' stress that you've conquered!"

1 * Accept the fact that some days you're the pigeon, and some days you're the statue!

2 * Always keep your words soft and sweet, just in case you have to eat them.

3 * Always read stuff that will make you look good if you die in the middle of it.

4 * Drive carefully... It's not only cars that can be recalled by their Maker.

5 * If you can't be kind, at least have the decency to be vague

6 * If you lend someone $20 and never see that person again, it was probably worth it..

7 * It may be that your sole purpose in life is simply to serve as a warning to others.

8 * Never buy a car you can't push.

9 * Never put both feet in your mouth at the same time, because then you won't have a leg to stand on.

10 * Nobody cares if you can't dance well. Just get up and dance.

11 * Since it's the early worm that gets eaten by the bird, sleep late.

12 * The second mouse gets the cheese.

13 * When everything's coming your way, you're in the wrong lane.

14 * Birthdays are good for you. The more you have, the longer you live.

15 * You may be only one person in the world, but you may also be the world to one person.

16 * Some mistakes are too much fun to make only once.

17 * We could learn a lot from crayons. Some are sharp, some are pretty and some are dull. Some have weird names and all are different colors, but they all have to live in the same box.

18 * A truly happy person is one who can enjoy the scenery on a detour.

19 * Have an awesome day and know that someone has thought about you today.

20 * It was me, your friend!

*Save the earth..... It's the only planet with chocolate

There are basics to what we teach. Learn your Dow projections. Study the economic calendar, watch futures, don’t ask for to much admit into your mind…

Study each morning within the alert the economic calendar

http://www.bloomberg.com/markets/economic-calendar/

Use this in conjunction with analyzing futures as often as you can while “our world is closed”; the world market is still going on.

We are re-allocating already within some of our open “baskets” and you’ll note when we are increasing certain stocks. It’ up to you to keep track of your basket, from how you first traded it, but each basket we hold are just part of our overall recommended portfolio.

All options remain open. We need strong movement to show profits, but have investments in key companies.

We are re-entering our Proctor and Gamble 2013 Call.

29% profits in a few months, we turned it, and are ready to invest again. This could be a long-term hold with added commitment.

Welcome to our new “mix” of trading disciplines and effective method to have subscribers interested in truly learning, or being mentored thru the Zen of the market.

Money Bags

2011-05-15T13:25:00.000-07:00

Huge lessons learned by advanced mentoring trainer MP we publish to show you progression:

“I just had one of those "Ah Hah" moments today where I actually executed a trade like clockwork...

I demonstrated everything you teach in the last 48 hours.

Yesterday...I could have entered to the call...but I waited because the move down was pretty heavy. I was not anxious to get in knowing that I might miss a move...but I was OK with that...

today...because of all my practice and because of all your lessons...I was able to "breathe" with the market..beginning at 4.30 am with the futures...Because of your DOW projections and my practice using support/resistance...and my experience "tracking" price. I was able to enter at the perfect time..

Again...because of your projections...and profit taking rules...I knew exactly where my target was...

After I sold out with a 24% gain..right BEFORE the top....(while staying home with my girls, cooking lunch and playing hide and go seek)...I just sat back and almost teared up thinking..."I just made more money in four hours than some people do in a week..."

I thought of that book I'm reading...Nickel and Dimed (almost finished by the way)...and how hard people work for $70-$80 per day...(BEFORE TAXES)...and I just took more money home in 4 hours then hard working teens and ADULTS make busting their ass all week long in crappy work conditions...

I was with my kids all day in a very comfortable home doing practically nothing but clicking my computer mouse..and just hanging with my family..

It doesn't seem fair...but I realize that I've worked very hard to get to this point...and I expect it to continue...I just need to keep perspective like this so pride, arrogance and greed stays in check...

I believe I have been blessed with a gift...and you are a big part of that..

Thanks brother.”

MP is my favorite subscriber. He is a fundamental Christian, a libertarian, and a conspiracy thinker. I believe in all faiths until they preach to me, am a Zen Buddhist, and am also a conspiracy thinker. MP and I argue all the time, for years, in emails, and we have both learned from one another.

Remember there are only three of us that run OEX and BCO services so we are not the spiffy group that updates signals hourly.

If our many articles, videos and ability to work by email with Floyd are truly educating you we hope you are learning enough to “trade by oneself”.

"Markets are constantly in a sense of uncertainty and flux, and money is made by discounting the obvious and betting on the unexpected"-George Soros

Floyd has a fascination with numbers, hence the study of geometry and math with W.D. Gann, and my use of Fibonacci.

Here’s math to help us simplistically see what patterns can do:

“Money bags"
  This year, July has 5 Fridays, 5 Saturdays and 5 Sundays. This happens once every 823 years. This is called money bags. So, forward this to your friends and money will arrive within 4 days (Based on Chinese Feng Shui.) The one who does not forward.....will be without money.   
Kinda interesting - read on!!!   
This year we're going to experience four unusual dates.  1/1/11, 1/11/11, 11/1/11, 11/11/11 and that's not all...  Take the last two digits of the year in which you were born - now add the age you will be this year, the results will be 111 for everyone in the whole world. This is the year of the Money!!!   The proverb goes that if you send this to eight good friends. Money will appear in next four days as it is explained in Chinese FENGSHUI.  Those who don't continue the chain won't receive....... It’s a mystery, but it’s worth a try. “

We have all received mail chains like this. There is significance in this cycle, however, and more proof of Fibonacci cycles

The Monday After Mother's Day

2011-05-08T11:14:00.000-07:00

We will lead again this weekend with our ongoing experiment in Floydian Movies on trading for the week, so be sure to view the movie in the password protected area of the Blue Chip Website. www.bluechipoptions.com

For OEX subscribers we highly recommend you also subscribe to this service for three reasons:

*Our commentary on Monday is much more detailed, discusses current holdings, market trends and projections and new stock and option trades. Blue Chip carries the methodology of much of our OEX system to stock market and option trading.

Market conditions for the OEX over the past 6 months have been harder to trade than any time since we first began trading the OEX over 12 years ago, because volatility shifts dramatically and volume on the index exchange has lessened dramatically as market maker traders have shifted to other vehicles.

Having both subscriptions is a minor expense for the gain you can receive on just one option.

______________________________________________________________________

The Monday after Mothers Day the Dow has been up 12 of the last 15 years.We will lead again this weekend with our ongoing experiment in Floydian Movies on trading for the week, so be sure to view the movie in the password protected area of the Blue Chip Website. www.bluechipoptions.com

For OEX subscribers we highly recommend you also subscribe to this service for three reasons:

Having both subscriptions is a minor expense for the gain you can receive on just one option.

______________________________________________________________________

The Monday after Mothers Day the Dow has been up 12 of the last 15 years.

Overall, the market remains with a bullish overtone, despite correcting in Gold and Silver as we predicted. Silver was the largest correction from 50 to 34. If we see Gold close below 1469 it may have more to correct.

However, we believe most professional investors have moved to equities, and that the retail investors are those still “betting” on I shares GLD and SLV.

In our Blue Chip complete commentary we share what instruments for precious metals we would be investing in, and plan to.

We also see Oil stabilizing by the middle of June near 95, a reasonable price to allow market trading and not crash all markets. Remember, oil is fully manipulated not by supply and demand but by commodity traders.

And a few F.A.Q.s that come up often to help you learn:

1. What makes the traders that “win” with you do so? What traits do they show?

They learn to see that nothing is black or white.

They stop listening to the knowledgeable, or reading the columnists

They follow the system rules 100%

2. What makes the traders that “churn” out of your system leave, especially those on the 30-day free trials?

-The churners are first those that think they will learn everything in 30 days.

-They seldom read or watch the movies available online, and instead just start trading off the daily alert, and lose their ass

-Typically they enter learning with the prejudices of what they have learned or read, and are not ever believers that most facts are false, that the market is manipulated, or that one is actually “poker trading” against another in bid/ask.

3. What does the average full time trader with your OEX system earn annually?

First it’s illegal for me to answer this, much like franchisors can only offer ranges

Second, it depends on the risk to reward ratio the trader has. Conservative traders make less, but longer. Risk oriented traders make larger amounts, with great chances of losing

4. How long does it take to learn to trade options?

One should “virtual paper trade at least 90 days”; typically it takes one year to learn to trade options.

5. What is the single greatest mistake you see new traders make?

They move too fast. Not enough study, the need to trade (instant gratification) and if they do well they move even faster. There’s really two reasons though; the new traders that don’t make it usually take NO time to study our articles, movies or charts

6. You have traded for many years. What is your best quality in trading?

-My best quality is my learned intuition about the market. I listen to almost no one and keep all the noise out of my trading.

-I have a gambler personality and am a high-risk trader. At times I haven’t stopped fast enough when on a good run

7. If you were going to learn just one thing to trade, what would it be?

-Point and Figure Charting

Have a great week trading. If you are subscriber to the Blue Chip (www.bluechipoptions.com) service, this commentary will continue with a movie and more specifics about stocks and option trading for the week.

Inverted Head and Shoulders Pattern

2011-04-29T20:57:00.000-07:00

I’ve spent last week in California meeting with other financial analysts and giving lectures on my views of the market and how politics and market manipulators and makers control the market.

The market is in an inverted head and shoulders pattern and actually has the potential for more upside, yet tips on fragile ground.

Several patterns for you to observe:

*When the market goes up, gold and silver go down. They are moving in conjunction now, and confusing chartists and technicians.

*Gold and silver are typically held as hedges against the USD. Many analysts, including myself, believe the worthless USD could truly shift ground, and although still truly worthless, may dramatically increase in value.

: Another sign of a bottom in the greenback: Longtime and well-respected dollar bulls are throwing in the towel. Having feared a "deflation" that would have seen the dollar's purchasing power grow, many analysts now realize the next crisis will be inflationary – meaning a collapse in the dollar's purchasing power.

And finally… perhaps most ominously… one of the world's greatest investors, Jeremy Grantham, the head of GMO, recently published a long document explaining why "this time is different" and the value of the dollar will not revert back towards the mean. The world, he says, is facing a Malthusian crisis – "peak everything."”-Stanberry and Associates

* Both Gold and Silver, which we read about ad nauseum, are technically due for a correction. We exited all precious metal positions at 1440 to 1476 for Gold and 42.00 for silver. It is our goal TO ALWAYS LEAVE MONEY ON THE TABLE FOR SOMEONE ELSE. NEVER SELL AT THE TOP, BUT NEAR THE TOP.

We’re very pleased with our decision.

Short term (6 months) we are bullish to the U.S.and global markets and have invested our Blue Chip portfolio very aggressively and have shown some truly marvelous returns in both stocks and options.

Good earnings, good money reports, and good political controls (the elimination of idiots like Trump telling us Obama is not a an American, or Huckabee telling us he is “too worldly” perhaps helping people realize there truly are some idiots trying to lead us.

Call profits were difficult last week, as the market opened up and stayed up, but any traders that paid prior day close or higher were able to profit each day of last week.

Please remember, our system and rules are unlike most. We are flexible to the market and recognize we must adjust slightly, as long as we are within the basics of our system

We have been resistant to entry to the put, often to the chagrin of our subscribers determined to see downside, as it should occur. Typically puts return less profits and requires second buys and we remain on the sidelines with a put purchase YET.

In fact we will open the market this week with no new OEX Option signal, as we want to watch technicals.

Separately in our Blue Chip Option “movie of the week” where Floyd speaks of market conditions in general (available only to BCO subscribers) we predict where we see market conditions heading. Sign up for this service and round out our trading at www.bluechipoptions.com

As you read Monday’s OEX alert we are standing sentry at the gates waiting to see what mood swings take place.

Remember, there is always a chance to buy and to make a profit, and even more chances to buy and have a loss, all because we want to trade.

A Critical Juncture

2011-04-24T22:31:00.000-07:00

The stock market is at a critical juncture, and we are relying here on technicals, not fundamentals. What we’ve seen occur this past two trading weeks is leading to an important movement to the market.

First, from KeyDates.com

“The S&P ran into resistance just below the February 18 high, traded sideways in early April, then fell into the April 18 turning date. The rally off the April 18 low has formed what appears to be an island reversal on the daily chart, with a gap down on Monday morning and a gap up this morning. If these gaps remain unfilled, we could have a very bullish situation, one that might surprise most traders. The next few days should tell us whether this analysis is correct. The S&P needs to exceed its February 18 high for the bulls to have the upper hand.

The April 26 turning date comes next week, one day prior to the next FOMC interest rate announcement, due on April 27. April 27 also marks the first time Fed Chairman Bernanke will hold a press conference following the FOMC meeting. We may see volatility during that timeframe”

And next, some commentary from chartists:

“-- NEW DOLLAR DOWNLEG MAY BE STARTING FROM BEARISH TRIANGLE

-- THAT BENEFITS STOCKS AS WELL AS COMMODITIES

-- THE FALLING DOLLAR ALSO GIVES AN ADDED BOOST TO FOREIGN SHARES”

The FOMC announcement Wednesday should be surrounded by volatility, as the market watches Bernanke and his responses to quantitative easing, what he says about Standard and Poor’s lowering our debt rating.

This week we’ve tried a new approach to our combined OEX/BCO commentary, with Floyd making a lengthy movie of his commentary for the week. The URL link for this movie, in its test phase, will be found in the BCO alert for Monday.

Here’s a summary of a few of Floyd’s number projections:

-We are now long the QQQ’s with options as it closed about 2350.

-We think the S&P has an upside price of target of 1349; if it breaks this it could gap up to 1400.

-This is all occurring because of the inverted head and shoulder formation we’ve been discussing.

-We agree with Charles Nenner Research that the NASDAQ looks strong, but be watchful at 2385, where we are now long on calls on the QQQ, which could lead to a NASDAQ close above 2450

-And what we’ll show you in our Dow projections is most key. If the market can hold up and close above 12,540 there is high potential of reaching 12,746 and then 12,880 before any correction.

We see a 70% potential of this happening and a 30% probability that the market will first correct again and take us back to 12,540 area.

Floyd has a rule of thumb to always sell for big profits too early and “to leave money on the table”.

We sold Gold at 1446 and Silver at 43.00, and it’s since continued its upward ride. We expected to see a mild correction before more upside, but we now hang our heads as gold and silver appear on a buy signal. Gold may hesitate 1540, and now that its’ hit the magic 1500 mark, a close below 1495 will be a warning signal.

We see more upside in Silver and would rather be long there first, as Gold cycles still show potential weakness until mid May. If we hit 1540 on gold we’ll be very bullish.

We have already begun to build small inventory in SLV and CEF.

By June Crude could reach 116. The market in oil, as with all commodities, is 50% outside of supply and demand and cause and effect, but all based on trader games and market makers leading markets. Obama may think he can stop this, but this is the natural law of option trading from beads 1000’s of years of years ago. Electronic manipulation now puts market makers fully in charge

In Blue Chip we are overinvested and plan no new buys this week. I’ll report on outstanding options and holdings that we are “watching” for our profits, or ready to reinvest again in

And yes, for those of you that ask:

1. We have fucked our sovereign debt, but so has every country in the world.

2. The house of cards of paper currency will somehow adjust to forgive debt, to practice a global valuation, and we see a return to the Gold standard.

False Facts: The Republicans lower debt and lower taxes. The Democrats raise debt and taxes. To yet again teach empirical facts please prove this to me as a summary of the past years.

All is never as it appears, but how we see it.

Be Well

Floyd at OEX and BCO

May 25^th, 2011

Market Basket Trading

2011-04-17T10:23:00.000-07:00

Market Basket Trading

We will be introducing more market basket trading over the next few months. Within a market basket the trader invests equal $’s in each position, or does so by % allocation, and holds in a basket.

The stocks can be bought and sold individually, but at Blue Chip we typically hold the basket for sale as a basket.

As an example of how we trade we invested $2500.00 4/8 in the total of the basket below, invested another $2500.00 on market lows 4/13, and now hold a small position of $5000.00 in a basket of the following stocks, with no stop loss:

2012 Brand Basket

NOTE: WE will NOT list any baskets in our Stock Charts portfolio to make it manageable. These are all baskets you can create your own Stock Charts portfolios (if subscribers) to set up your own point and figure charting analysis.

This week we will be introducing three new market baskets for traders. One is from our friend Trader Alan, who invests in breakouts and higher risk speculative plays. We’ve done well with his recommendations and his work brings new dimensions to our style of speculative trading:

Trader Alan’s Dice Roll Basket

THIS BASKET WILL BE LISTED IN OUR BLUE CHIP ALERT Subscribers Alert early this week

With this fund we recommend an equal dollar valuation, meaning pick a dollar amount for the basket investment, and invest equally in each position. Later you can add, sell, and change exposures, but we would start here by dollar valuation

NOTE: WE will NOT list any baskets in our Stock Charts portfolio to make it manageable. These are all baskets you can create your own Stock Charts portfolios (if subscribers) to set up your own point and figure charting analysis.

Michael O’Higgins, head of the O’Higgins Asset Management Group in Miami and the famed creator of the Dogs of the Dow basket created the next basket.

The Dogs of the Dow is based on the premise that one year’s worst performers of the “dogs of the Dow” could become more often than not the next year’s big winners. It’s proved steadily correct.

His new approach, tested since 1995, is called the MOAR Basket, standing for the Dogs of the World, or the Michael O’Higgins Absolute Return Fund.

After every losing year by the Dogs of the World he takes 5% points from each of the other categories and over weights the dogs, again playing the odds that they will outperform. If and when the stocks rebound he brings the equity portion of the portfolio to normal in 15%% point increases.

Using this technique since 1996 MOAR would have appreciably outperformed every major stock index, long and intermediate term bonds, gold and cash and inflation and done so with ONLY ONE DOWN YEAR.

This is a percentage allocated basket:

THE BASKETS will be shown each day in our Blue Chip alerts this week, for our subscribing base. Mr. O’Higgins is hard to argue with, as his famous Dogs of the Dow has worked famously, and we think his thinking of Dogs of the World will be an excellent hedge against turbulent markets

NOTE: WE will NOT list any baskets in our Stock Charts portfolio to make it manageable. These are all baskets you can create your own Stock Charts portfolios (if subscribers) to set up your own point and figure charting analysis.

Make note this is a 4-day trading week. If investing in baskets, start in small increments (Fidelity Brokerage requires only $2000.00) to create a basket, and build equity regularly in buys into the baskets.

Good trading, and please shoot me if Donald Trump becomes President, as we have become then not an ignorant nation, as I see us, but truly a stupid nation, and I’ll be moving out.

The Long Weaks

2011-04-11T07:54:00.000-07:00

If Gold is going to be the new reserve currency (it will be), and all paper currency will value around Gold, then Gold should go higher. However, we believe if gold is going to go substantially higher, which we believe, it will more than likely stage a decline first in an attempt to wash out what we traders call "the long weaks". "The long weaks" are those individual traders that have just bought along with the craze, and worry every day when to sell.

We believe this shake out must occur. We sold all Gold, Silver positions at 1440 earlier this year, and have missed only the last few weeks moves to 1480, as otherwise the Gold market held steady with no higher moves than 1440. Silver, on the other hand, also due for correction, just hit tops of $40.00.

Use a stop loss on silver, if you hold it, if it closes below 38.50. You might at that time consider a May or June ITM put on SLV and take 20% profits. GLD will give a sell signal below 1417, but also has potential to rise to 1580 before any correction.

If GLD shakes out many people that have banked great successes, sold nothing, and have no sense of cynicism will lose a great amount of their “paper gain assets”.

We find it most interesting that we are having to utilize moving averages, put and call ratios, big block transactions, sentiment indicators, PnF weekly and annual charts, and less on price action in a market like this.

For those of us that believe in sunspots and moon cycles, the plant Mercury is in retrograde for the next two week. Historically we can see a sudden drop with a market on upswing during Mercury retrograde and then another return to new highs.

And a question from a Blue Chip trader on why some of more volatile recommendations on rare earth or unique commodity stocks, that have brought us great profits, and made us also gasp with fast losses, the question was “what underlying fundamental could have an IPO drop 50% in a three day period?”

The answer is first that many IPO’s go through shakeouts, and Ned Miller, one of our students in small caps/day traders, best answers the second answer…

“As for the negative write-upon ______. we've seen this game played dozens of times in the past month... The short sellers take massive positions in a small China-based stock. Then, the editor writes a negative report about the company – and sends it to every financial blog he can think of. Some writers don't disclose their company for fear of a lawsuit. Others go as far as to hire small law firms to file suits against these companies within a week of publishing their report.   Once the report is published on blogs, the stock begins to tank. The fear is enough to push these small stocks (which have little institutional ownership) down in excess of 25% in a day.”

Small stocks are the highest risk and highest gain trades. You must expect to return 136% in a week, or to lose 50% in the same time. There are no fundamentals or charts that show manipulation.

Several comments are appropriate for Floyd during these trying times:

-The Pee Party does not have a clue and no money will be saved over the long term

-Despite what any of us may think of Obama, the GOP has yet to give a plan (don’t spend money is enough to kill me, as they were the fucders that first spent the money from a zero deficit and it was okay”), or a candidate that would give me the comfort that they could represent us to the world.

-And yes, Mr. Huckabee, we want a worldly view President. We live in the world, not the U.S.A. That thinking is our core problem.

We as Americans think ours is the best and only way. Most of us have never even left our own counties or states.

I fear us most for our ignorance and prejudice.

Enjoy Life NOW... It has an Expiration Date

2011-04-03T16:59:00.000-07:00

Famed trader Jesse Livermore said, "It was never my thinking that made the big money for me. It was always my sitting. Got that. My sitting tight"

Anonymous said, “The stock market is that creation of man which humbles him the most.”

“Sell stocks whenever the market is 30% higher than a year ago” -Eugene Brody

Several weeks ago I issued a challenge: Give me six empirical facts.

I heard nothing from anyone that wrote that was empirically based, which was my lesson to teach, until Advanced Mentoring student

Congrats. Your first 6 are correct. Here they were:

Scientific Empirical facts...

Water vaporizes into steam.

Planets revolve around stars in elliptical orbits.

The gravitational pull of an object is directly related to its mass...

Fire needs oxygen to burn....

Plants need CO2 in order to conduct photosynthesis...

Then he said:

“Market related empirical facts...

All fiat currencies eventually fail or collapse...

Gold is a hedge against inflation because it maintains its purchasing power over time...

Market related empirical facts...

All fiat currencies eventually fail or collapse...

The stock related is not. Flat currencies may change name, but many have survived. Argentina in 80's the peso went under, Ecuador in 2000's also, both moved to USD

Gold we only know historically, as with flat currencies, to eras in which we began tracking history so it is not empirical, but I agree:)

__________________________________________

And again from MP, a video and story worthy of your learning:

Read the story BEFORE you watch the video...

http://www.youtube.com/watch?v=hnOPu0_YWhw

Please read to the end...

THE SITUATION

In Washington, DC, at a Metro Station, on a cold January morning in 2007,

this man with a violin played six Bach pieces for about 45 minutes. During

that time, approximately 2,000 people went through the station, most of

them on their way to work. After about 3 minutes, a middle-aged man

noticed that there was a musician playing. He slowed his pace and stopped

for a few seconds, and then he hurried on to meet his schedule.

About 4 minutes later:

The violinist received his first dollar. A woman threw money in the hat

and, without stopping, continued to walk.

At 6 minutes:

A young man leaned against the wall to listen to him, then looked at his

watch and started to walk again.

At 10 minutes:

A 3-year old boy stopped, but his mother tugged him along hurriedly. The

kid stopped to look at the violinist again, but the mother pushed hard and

the child continued to walk, turning his head the whole time. This action

was repeated by several other children, but every parent - without

exception - forced their children to move on quickly.

At 45 minutes:

The musician played continuously. Only 6 people stopped and listened for a

short while. About 20 gave money but continued to walk at their normal

pace. The man collected a total of $32.

After 1 hour:

He finished playing and silence took over. No one noticed and no one

applauded. There was no recognition at all.

No one knew this, but the violinist was Joshua Bell, one of the greatest

musicians in the world. He played one of the most intricate pieces ever

written, with a violin worth $3.5 million dollars. Two days before, Joshua

Bell sold-out a theater in Boston where the seats averaged $100 each to sit

and listen to him play the same music.

This is a true story. Joshua Bell, playing incognito in the D.C. Metro

Station, was organized by the Washington Post as part of a social

experiment about perception, taste and people's priorities.

This experiment raised several questions:

*In a commonplace environment, at an inappropriate hour, do we perceive

beauty?

*If so, do we stop to appreciate it?

*Do we recognize talent in an unexpected context?

One possible conclusion reached from this experiment could be this:

If we do not have a moment to stop and listen to one of the best musicians

in the world, playing some of the finest music ever written, with one of

the most beautiful instruments ever made . . ..

How many other things are we missing as we rush through life?

Enjoy life NOW .. it has an expiration date

A Cup of Coffee

2011-03-26T08:06:00.000-07:00

Before we discuss the whipsaw that allowed profit 4 of 5 days in our OEX trading, and before we discuss the disruptions of Middle East due to social networking, or the horrors that have hit Japan, let’s gain perspective about our government. This article helps explain how we utilize firearms illegally to gain footholds, and the mighty Greed that is rampant:

http://www.rollingstone.com/politics/news/the-stoner-arms-dealers-20110316?page=6

When we discuss world events we need clear perspectives on the environment.

We all know the GOP and PEE Party idiots who say “drill baby drill” and that there is no world catastrophe environmentally, and those of us with vision know these views to be funded by the oligarchs that make us want to believe nothing is wrong. So, an empirical fact:

A Cup Of Coffee
It takes 37 gallons of water to make a cup of coffee.

Many of our citizenry want to cut government spending and waste. Most of these poor folks have no idea what “little things we cut” (like education, or our new distaste that it is unions that have caused all the problems, so here’s an infrastructural question:

“Nearly 30% of nuclear plants in the U.S. fail to report equipment flaws that could pose safety risks, the NRC said.”

Of great interest: last week I challenged readers to provide me with an empirical fact. I must be making progress in my teachings of “most facts are false”, as I did not receive one comment on an empirical fact. I challenge you again to produce an empirical fact and let me share it with our readers.

“Floyd, 25% of Detroit is gone because of what unions did to raise the cost of the American car.

The real fact: American carmakers refused to trend to the future, kept making big, fat cars, invested poorly, have now taken most pension pools away, and only recently have begun making cars of quality.

I know that until 2009 the vast majority of American cars were just shit. I rented them every week, and would come home to my foreign cars and just shake my head. We just made shitty cars and did it to ourselves

Trader JS and I have been studying the true value of the USD, and the true price of Gold/Silver. The results are frightening:

This chart I found tonight confirms my Gold/Silver/Greenback theory. If you take the $50.00 dollar (face value) 1oz. gold Eagle in my formula and divide it by $7,500 you get a completely worthless Greenback. (.006)

Based on today’s Gold/Silver ratio, which is approx. 38, that would put silver at approx. $200 per oz. if gold were $7500. If you take the $1.00 (face value) 1oz silver Eagle and divide it by $200 you get a worthless Greenback again (.005)

That chart assumes we have the gold in Ft. Knox to back the dollar. Ron Paul has been trying unsuccessfully to get legislation passed to audit the gold, which has not been done since 1974, coincidently one year after we went off the gold standard. Paul thinks that we don’t have a fraction of what is claimed. Neither do I.

Money is a Construed Value Commodity

2011-03-19T08:52:00.000-07:00

Japan and the deficit.

What will happen to all the talk of deficit and budget cuts when we as a country fund Japan, to whom we are the largest debtors with Treasuries. All of the talk, all of "Obama from Kenya, a socialist, or a Muslin", and the breaking of unions is all to rip apart government and stop the waste.

Pee partiers sleeping on their couches in the House and Senate, the reform of America.... hmmm, the devastation is overwhelming and our repayment of debt by giving them money, and this deficit will soon have to be Cheney's famous "deficits don't matter) have to be true. Cheney was right, if the economy grew and equities gained value. It's pure Keynesian thinking and to a large part it's become reality that will be, a perpetual house of cards

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Money must be understood. It is a “construed value” commodity, only

worth the value that we put on it.

Most Americans never understand this. All third world countries do.

The Gold/Silver/Greenback Ratio- A Floydian Point of View

The US Government is trying to tell us that the US Dollar("greenback") is only worth between .028 cents & .035 cents adjusted for true inflation. Take three instruments of US legal tender, 1) a one dollar bill.("greenback") 2) a 1oz. silver Eagle(face value $1.00) and 3) a 1oz. gold Eagle(face value $50).

All three are legal tender in the US. All are recognized, backed and printed or minted by the US government and backed by the US Federal Reserve for ONLY their face value.

If you want to buy a $1.00 "greenback" from the Fed, it will cost you $1.00 or 100 pennies.

If you want to buy a $1.00 1oz. silver Eagle from the Fed, it will cost you 35 "greenbacks".

If you want to buy a $50.00 1oz. gold Eagle from the Fed, it will cost you 1,400 "greenbacks".

$1.00 silver Eagle divided by 35 greenbacks = $.02857142

$50.00 gold Eagle divided by 1,400 greenbacks = $.0357142

It will tell you what your greenback is worth adjusted for TRUE inflation since we went off the gold standard in 1973.

OEX Options Won Again

2011-03-13T10:42:00.000-07:00

WE won again. For the fourth year we were listed as one of the top 5 option advisory services READERS Choice Award for 2011.

We competed with thinkorswim.com, tradestation.com and optionetics.

Huge companies.

And little old OEX Options won again!

_______________________________________________________

Study the economic calendar for the week every day before market opening:

http://www.bloomberg.com/markets/economic-calendar/

__________________________________________________________________________

Today in our Blue Chip Alert we are recommending a great new stock issue, internationally based. Consider a full subscription at: www.bluechipoptions.com

“Money will always flow towards opportunity and there is an abundance of that in America. Our best days lie ahead”

Warren Buffet, commenting on his plans to make major capital investments in the U.S.

“Americans are not paying off debt so much as banks are forgiving it; banks do so as they know their lies have been exposed. Much of our debt will be paid off by the banks, now caught in their own money laundering game.”

Warren Buffet

“The liberals in this country have bankrupted us and we are headed to economic calamity”

Rush Limbaugh, the idiot half of Amerika actually believe

And I must climb on the soapbox. Obviously our youthful country, many citizens who have never even left the state they live in, are again being influenced, just as the stock market by:

1. False facts. “82% of the deficit has occurred since Obama took office”, from Murdoch’s Fox News. The fact is the reverse; 18% of the deficit has occurred since Obama took office.

2. Irrational thinking: There is no doubt that America will rise to the effort to provide monetary and humanitarian aid to our largest ally, Japan. Not a thought will be mentioned of the billions that will be added to our deficit.

3. At the same time we will take away union bargaining rights in many states, cut public services, not fix our infrastructure. None of it will work and our core services will suffer. The deficit we’ve created will continue to blossom:

a. Libertarians will say free enterprise will solve this. Business owners such as myself argue there is no such thing as free enterprise.

b. Republicans, led by Rove and Limbaugh and the like, will infiltrate us with TV newsbytes blaming liberals for raising the deficit.

c. Sarah Palin, with an IQ of 98, but great looking legs and new tits, has a 20% chance of becoming our next President.

d. The “liberal free press” is secretly (obviously as no one seems to know it) owned by archconservatives R. Murdoch and a conglomeration of right-wingers, neocons that have created Comcast. There really is no “liberal newspaper or TV", except for a few low circulation or high brow intellectual magazines. There is no liberal free press. We have falsified our own facts.

4. In the coming days the market will be tougher to navigate. It will make the decision whether to break apart of this consolidation, or break down and get a good correction. If a good correction occurs the talking heads will begin babbling “economic breakdown”, “ false economy bolstered hopes”, and these are the same people that over the last few months bolstered the market up. Thusly, they are not incorrect perhaps in their statements, but they are liars.

5. Only when we see there is “no black and white” and that “white does not always have to win” will we begin as people to understand our souls, and what we have done to our earth and ourselves.

The 120-Year Cycle

2011-03-06T15:02:00.000-08:00

"To me, the "tape: is the final arbiter of any investment decision. I have a cardinal rule. Never fight the tape"-Martin Zweig

1990 was a very volatile year, with wide price swings. 1990 + a Fibonacci 21 years = 2011. This Fibonacci time count, as well as the peak of the 6-year cycle that is due soon, suggest that 2011 will be a volatile year. The political upheaval in the Middle East has been blamed as a fundamental reason for the volatility in oil, gold, and stocks. Is it oil or just Fibonacci time counts and natural cycles? Subscribers who remember my discussion of the 120-year cycle in past letters should not be too surprised at the events in both the Middle East and in state capitol buildings around the country. As you may recall, the 120-year cycle is both a revolution cycle and a depression and renewal cycle. When the cycle turned in the late 1700's, it created both an economic depression and the American and French Revolutions. Most people are unaware that the economic depression of the early 1780's almost destroyed the new American Republic. And what of France? It was an economic depression that resulted in the overthrow of King Louis XVI and Queen Marie Antoinette.

One hundred and twenty years later, an economic depression nearly bankrupted the United States Treasury in 1896. The stock market crash of 1893-94 resulted in a depression that caused riots in the major American cities. And both Cuba and the Philippines revolted against Spanish colonialism, culminating in the Spanish-American War of 1898. Today, we are seeing tremendous political upheaval in the Middle East. Amazingly, the American media is not telling people that the Middle East upheaval is primarily a result of poor economic conditions. Central bank easy-money policies have caused rampant food inflation in third-world countries. In addition, jobs are scarce and rents are exorbitant.

Now, in the early 21st century, we are not immune to the cycles of the universe. The 120-year cycle is alive and well -- and it is beginning to exert enormous pressure on political and economic conditions. What we are witnessing in the Middle East -- and around the United States -- is only the beginning of historic melodrama that will outlive us all in the pages of history.

"Whatever method you use to pick stocks...your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed. It isn't the head but the stomach that determines the fate of the stock picker"-Peter Lynch

The facts are unimportant. It’s what they are perceived to be that determines the course of events.

Most empirical facts cannot even be proven.

This is the Floydian Rule: A rock is not hard.

Higher Growth Could Mean Our Debt Worries are for Nothing by Stephen Gandel

http://www.time.com/time/magazine/article/0,9171,2055183,00.html

Gold and Silver:

1. We believe Gold is ready for a breakdown, short term, and remains near or at its high. We are completely out of Gold for the short term.

2. Silver hit our high of 34.50. If it closes below 33.50 we see silver also breaking down, for the short term

Our traders exited Gold at 1386 to 14.10, and should have exited Silver at 34.50. Our Silver long term leap was sold for up to 65% profits, two week hold

We will not, and have not gone short in the market. Any breakdown, and one could occur this week, we believe to be short term, and if the market hits 11,740 in downturn we would ADD to any existing long-term core position

Oil we believe could top at 107, perhaps this week.

Historically our recent upside has lasted over 205 days, one of the longest on record.

Oil at All Time Highs

2011-02-28T08:07:00.000-08:00

WE begin with a full market week, in a world in turmoil, and oil at all time highs. The youth are speaking in the Middle EAST, nothing to do with Emperor Bush and his invasion of Iraq and claim that mass slaughter would lead to democracy.

Instead social networking creates a communication world in which the vast majority of the dictator led worlds say WTF? and why are there no jobs and no rights, while our dictators distort our reality,and steal our money.

We live in a world in which now the Pee Party and GOP claim credit for the greatest economic turnaround in history led by President Obama, and in a world in which 54% of the U.S. population believe that Stephen King wrote Moby Dick.

A friend of mine shared that in dictatorships they are often accepted and aided by an uneducated people and Floyd counters that this is also true in Amerika where we have union busting thought of as “stopping greed” when instead it is a GOP trick to cut union support so that they can take over the White House and restore their world order in the next election.

And we live in a world where the massive economic cuts being requested now are the very economic expansions led by the Republicans that now push for cutting the deficits that they created.

Last week was our first “slow trading week” for the OEX in months, because of the whipsaw that began questioning market upside, but in which we held above 12,000 by week end, and bullish percentages stayed high.

It's All Timing

2011-02-20T12:38:00.000-08:00

Our level 3 and Advanced Mentoring students are given 6 books to read that Floyd believes explain and detail the market. Our favorite book , because it is written by protégés of my Father as the sole licensee of Richard D. Wyckoff, the famed Wall Street Trader is: Charting the Stock Market: The Wyckoff Method

New Level 3 subscriber Derek B summarizes this book well below. We request detailed book reports from our Level 3 and Advanced Mentoring students, to prove to themselves what they gathered. Derek B did a superb job, and we thought his summary appropriate to your studies:

“Wyckoff did not listen to the BS from broker offices, news, tips, earning reports, rumors, etc.… He taught how to be a detective uncovering the forces behind price and volume fluctuations as well as intercepting stocks when the charts show them at their most profitable stages. The 3 charts that Wyckoff used were the line chart, P&F, and his very own wave chart, used to uncover motives of large investors that were capable of moving and manipulating the market. Wyckoff studied the “bread crumbs” left behind. These charts are used in very specific ways and must be followed accordingly in order for the Wyckoff Method to be effective. The line chart is used to determine the direction of the price and the most opportune time for buying. The P&F charting is used to determine the distance the stock will move (points). The Wave chart is a leading indicator of how the market/sector will travel. The wave chart provides subtle clues of how the market is “turning/reacting” before it does.

(This part of the book had a lot to do with “reading” the overall market, big help with OEX trading)

When we study the market our ultimate goal is to accurately determine when the current trends will change and what type of change (i.e. short term, intermediate, and long term waves). Supply, demand, and trading volume are extremely important aspects of the Wyckoff Method (WM).

The Bear Market Correction sprouts towards the end of a declining market when traders lose hope that the decline was short lived and temporary, while others were attempting to buy on the way down “timing” the market for a quick rebound and was unsuccessful. In any instance the traders begin selling off their high priced stocks feeding fuel into the beginning of a selling climax (I am anxious to witness my first selling climax). The climax begins with a sudden spike in volume while the price range widens followed by a closing near the low. The savvy trader buys at the end of the climax and awaits the rebound; the rebound will show volume dips while price range jumps. This move gives the impression of a quick rebound taken back by the Bulls but in actuality it is setting up for the most critical aspect of the Bear Market Correction, the secondary reaction. The market may pull back and stabilize at the original selling climax with shrinking volume providing evidence that selling has dried up and buying power has moved back into the market. The other outcome after a secondary reaction is the selling (supply) is to much for the market to handle prices will fall lower then the initial selling climax extreme low suggesting a new and further decline. When the selling does subside a solid conformation of a reversal is when prices break the technical rally (rebound).

Bull Market Correction is not the exact opposite of a Bear Market Correction. The Bear market is for the investors needing to pick up stocks at a lower price. The Bull Market Correction is hidden selling by the big players. They attempt to maintain a high price while dumping their holdings. The large operators must not allow the prices to fall to low where the average Joe Shmo will unload his position but maintain some hope in the market until they are down selling off their position. The issue with the Bull Correction is determining how far down the correction will go once the large operators are done selling off and the public beings to panic. The “correction” could become a turning point and move into a down market. Wyckoff mentions standing on the sideline waiting for the dust to settle because of the magnitude of uncertainty. When prices start to rise halfway to previous highs but volume fails to increase this clue tells the savvy trader that buying is maxed out and the larger operators are biding up the price and will being dumping their position time to go short and rake in the Benjamin’s J.

The distance of a Reactions can also provided the strength of the market/trend. A normal reaction is half the distance of an advance. If the reaction is less then half of the advance the market is strong and will likely to climb from the “weak” reaction. If the reaction is greater then half the trend maybe fading does not expect a large bounce. The opposite for a decline

Wyckoff’s method is a very logical one. He believes in finding a weak stock/sector within a Bull market waiting for the trend to reverse and go short. And following a strong stock during a down market waiting for the Bulls to take over and go long on that stock. I like many people believed that buying a beat up stock in a down market would produce more returns when the market turns Bull then a stock that maintained stability in a bull market. This is not the case.

For the most part the market is being manipulated on a daily/weekly basis, so understanding the stages of a manipulators campaigns will further prepare a trader towards insight on future moves. Wyckoff explains a 4-stage process: accumulation, marking up, distribution, and marking down. The accumulation process happens when the stock/market begins to consolidate and congest with low volume (this may happen over several days or weeks). The marking up process begins when the manipulator allows or pushes the price up with increasing volume along with plateaus during the process. The third stage is distribution, the manipulator begins to buy and sell during consolidations giving the appearance that the stock is ready to move further upwards, once the public begins to buy into it he sells his shares and prepares for the downturn. Marking down is the final stage where the operator shorts the stock and watches it naturally fall back down (having supply and demand take over). These manipulators use the market as their personal ATM machine, I can’t blame them only follow their moves and pick up the breadcrumbs.

Volume is the great validator of price movement along with a great indicator of what the future has in story. Wyckoff mentions numerous scenarios throughout the book showing how important price and volume are when used together. He explains the “signs” of turning points, strong markets, weak markets, etc.… all greatly revolving around price and volume.

Students of the Wyckoff method/Floyd method must develop and hone their own trading styles. These methods are teaching tools and help one develop the proper skills to become a successful trader. Paper trading has helped me immensely when entering and exiting positions and seeing where I rushed or did not enter in when the signs were clearly there. Hindsight does have its advantages when learning and paper trading.

Wyckoff and Dorsey both follow the same underlying foundation in regards to their methods: supply and demand. And cause and effect. While Wyckoff does not rely on the same tools as Dorsey they both rely heavily on the P&F charts along with sector rotation, strong stocks within bear markets, weak stocks within bull markets waiting for the reversal, and studying the overall trend of the market. The more I learn the more I realize this is not rock science. That being said I look back to what I knew last November and what I know now and realize that knowledge is power in the market. Though it has only been a couple months I feel like I know 10 times the amount of information I did before I started and wondered how I ever thought I has ready to through money at the market. I still have a lot to learn but what I have learned has maybe me a better trader/person.” Derek B

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The money is all being falsified, and the economy responded to the stimulus. In reality, all of Obamas radical financial moves were not radical as much as shrewd and astute. The economy is showing true strength, the commercial real estate market is up, banks are not bankrupt, and car companies have paid off loans.

The actual deficit can never be paid off. This happened almost 2 years before Obama, based on Social Security and Medicaid, and his added deficits would have stimulated.

We elected Pee Party and GOP because GOP stalemated all, and the game was for him to gain no power. They gained the power back, but could take no credit for what has actually happened.

It's all timing. As usual, America was patient.

Soon I can see the GOP saying Iraq was what brought democracy to the Middle East.

Thanks for letting me babble.

I’ll Be Fine Until I'm Not

2011-02-13T13:01:00.000-08:00

The fall of the Egypt regime should not be viewed with optimism, nor that with the fall of the regime in Tunisia will be a slow conversion to democracy. This is wishful thinking.

The chaos that reigns with nations that have not lived without dictatorship in many years, or ever leads to other opportunities, and believe me, they are preparing.

The option to democracy spreading is either continued chaos, or a slow overtaking of these nations by radical Islam.

Do not believe that everything will work out for democracy.

Things are not as they appear.

As a trader I would like to teach the best knowledge I know to you in one sentence:

I’ll be fine until I’m not.

Fear and Greed control our emotion, and supply and demand are created by cause and effect, and this creates the stock market.

Learn this around pivot points and support and resistance lines and you’ve got half of it. Watch Dow tops and bottoms in our projections to review 30 of the top 100 stocks.

Trade with rules. Do not break the rules. Expect losses. Have enough capital to make losses up with wins, which to date we are running at 8.75 to 1, meaning we’ve mostly been dead right.

____________________________________________________________________________________________

As trade ranging continues, however, we are more held with constraint, neither bull nor bear, as oil, which we had thought to correct prior to Egypt, may now lead to higher highs and even more inflation.

Gold holds at a resistance line, in slight correction, and we believe will move less slowly up that Silver. SLV we would option, and have, as it held at 29.30, and will sell at near 32.00, where SLV may top.

Otherwise we will stay out of the Gold and Silver markets.

In our Blue Chip service we have a large number of open options, and many of our traders have been very successful in day trading one and two LEAPS, and buying again on dips. We always suggest taking some profits on options at 33%, even if you believe there is much room ahead.

Study PNF to see where support and resistance lines lead, and remember that our pivot point and support and resistance calculators, and even the count of the stock can be used in option trading also.

Explain Hain and Tyco has been the question of the week.

Why would old Floyd pick stocks that are “staid” or “flat”.

1. They are undervalued.

2. Tyco has had image problems with the slime Kowalski, now in jail that they have handled poorly in PR, as the new CEO has done a magnificent turn around and we believe we’re by a great value stock with long term potential.

3. Hain is simple. Floyd is a student of Carl Icahn and his turnarounds. Icahn is the ultimate risk taker, and Icahn stocks are like the old Wild West. We believe he has taken a sizeable interest in Hain with his normal methodology with his normal work with top restructuring CEOS, consultants that detail where and how to change, and executes to a strong plan.

These are long-term holdings, using a 25% trailing stop.

As for new trades this week we will have none in Blue Chip.

We have too many holdings and its’ time to just day trade and hold our various positions while the market considers changing sectors, and whether to defy odds and continue upside, or to fall to our Dow lows on fear of oil and the lack of knowledge of what is going to happen.

As if we knew

Be Well, Do, Good, Show Compassion:

Floyd at BCO and OEX

Copper Hit An All Time High of $10,000

2011-02-07T17:10:00.000-08:00

Floyd was in Ecuador last week on business and pleasure. Internet even at fine hotels was sometimes hard to work with, and little English language based television. The Miami Herald Intl Version was the only U.S. based paper, and abridged

The news of Egypt was not as “large there”.

Every citizen is paid a minimum of $264.00 a month, and to most this is their only income.

From a distance I watched our market struggle at the 12,000 mark, with the very same reasons we’ve struggled in a trade range since hitting market tops.

Bears believe we are at the top for the year. Some believe we have been in a bear market rally since the March 2009 low.

Quantitative easing has occurred twice, yet Europe and other countries have supported it less. This means we may not do it again based on watching the commodity markets generally receding. If you have followed Blue Chip you’ve sold out of your gold and silver holdings long before the drop, and wait now to see if we see another surge. Meanwhile, Copper hit $10,000, and all time record on Friday. Copper looks to a chartist as if it topping, and it is a strong indicator typically of what and when commodities lower.

FEAR and GREED rule the market. We’ve always seen VIX as an excellent strategist for us to show when complacency begins sleeping with greed, and we begin to expect the market to move higher.

From Floyd’s perspectives we may have a few more weeks or months, but will have two corrections, the first minor (11,597 area) with a burst up, followed with what could be a major correction for Obama to deal with just as things get right.

But for the OEX day trader, and the shorter term of our Blue Chip traders we’ve had simply some extraordinary weeks. In our BCO alerts this week we will not only share new recommendations, but also share how we were able to actually short term trade from Ecuador, viewing the market only once a day, and receive 20 to 55% returns on a number of picks.

From Ecuador

2011-01-30T13:28:00.000-08:00

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

2011-01-25T10:54:00.000-08:00

*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

2011-01-18T12:00:00.000-08:00

*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

2011-01-12T18:13:00.000-08:00

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

2011-01-09T17:18:00.000-08:00

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

2011-01-04T18:08:00.000-08:00

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?"