Following the Rules

The market struggled with real reality yesterday, as economic and job reports, Bernanke explanation, brokerages....all of it became a bit more "real" to traders.
The April640P hit tops of 17.20, and was sold profitably. Many day traded this position.

The April655C was available for up to 1.00 per contract profits.
Some Advanced Mentoring students also traded the April630C for up to 3.00 profits intraday.

The actual signal is much less important than following the rules. This is the hardest rule we teach. The following testimonial from trader BD from Delaware I'm most proud of, as I have watched this trader truly develop in his skills. Read carefully, and learn from him:

"Floyd: Sold my remaining 620 put inventory @ 7.50 for a solid 1.70 profit on top of yesterdays solid profits. Had buy orders for 655 calls ready for 50 @ 2.00, 50 @ 2.10, 100 @ 1.70.

Filled both the 2 & 2.1 early. Let the market come to me, instead of chasing. As soon as the buy orders were filled, I had sell orders in place for 2.5 & 2.7. Filled while I was at the store. I'm getting much better at taking what the market will give and not expecting more.

Another solid day. If I could only guarantee $5k every day, I'd be a professional trader; 2 of 4 days this week >$5k/day. I didn't even trade Tuesday. Maybe in a year or two.

Thanks Floyd, I'm proud of myself.

One of the most important things I've learned from your literature is the psychology behind the trade. I my recent trading, last month or so, I don't recall getting excited about a money making trade or anxious about being down, keepin' it humble. This is consistent with my making profits, haven't had a loser in over a month. I also reread your fruit/option inventory analogy every day. Keepin' it simple. Each day I go into a trade only thinking about what the market will give today, not that I have to take out $500 or $5000. I'm sold on your Dow Projections and use the OEX resistance and support for confirmation. You da man.. "

Do NOT build any optimism about our economy. Emperor Bush and cronies are trying hard to stablize what is truly the worst situation economically since the Great Depression, and they will fail. They were part of the problem, and continue to be.
One of Floyd's financial idols is George Soros, the billionaire investor. Read carefully below, with helpful Floydian comments throughout:)

Soros Sees Additional Market Declines After Temporary Reprieve


April 3 (Bloomberg) -- Billionaire George Soros called the current financial crisis the worst since the Great Depression and said markets will fall more this year after a brief rebound. Floyd-dead right

``We had a good bottom,'' Soros said yesterday in an interview in New York, referring to the rally in stocks and the dollar after JPMorgan Chase & Co.agreed to buy Bear Stearns Cos. on March 17. ``This will probably not prove to be the final bottom,'' he said, adding the rebound may last six weeks to three months as the U.S. moves closer to a recession. Floyd-I believe we are in a recession, which will worsen over a 7 month period, with periods UP.

Last summer, worried about market disruptions that started with risingsubprime-mortgage defaults, Soros, 77, returned to a more active role in managing the $17 billion Quantum Endowment Fund, whose profits pay for his philanthropic projects. Quantum returned an average of 30 percent a year before Soros started using outside managers in 2000 for much of his money.

He also decided to write a book, his 10th, ``The New Paradigm for Financial Markets'' (Public Affairs, 2008). Released today online, the book explains the causes of the current meltdown, a crisis he says has been in the making since 1980, and the trades he put in place this year to protect his wealth, much of it in Quantum. Floyd-Soros is a financial contrarian and genius. He understands economics.

Soros has bet on declines in the dollar, 10-year Treasuries and U.S. and European stocks. He expected foreign currencies to rise, as well as Chinese and Indian equities. The latter bet helped Quantum return 32 percent in 2007. Quantum's returns this year have ranged from up 3 percent to down 3 percent.

`Heightened Uncertainty'

The euro has climbed 7.5 percent against the dollar this year and the Japanese yen has gained 9.1 percent. These and other currencies may continue to strengthen, he said.

``There is an increasing unwillingness to hold dollars, though there's a lack of suitable alternatives,'' he said. ``It's a period of heightened uncertainty.''

Because the dollar has been rendered nearly worthless.-Floyd

Federal Reserve officials dropped their benchmark interest rate 2 percentage points this year to 2.25 percent, and Soros doesn't see that they can lower the rate much further, given the weak dollar.

``We are close to the limit,'' he said.

As for his wagers on developing markets, Soros hasn't abandoned his holdings in India, even with the 22 percent drop in the benchmark Indian index this year.

``The fundamentals remain good,'' he said. He is less certain about what will happen to Chinese H shares, which trade in Hong Kong.

Credit-Default Swaps

Credit default swaps -- a way to bet on the creditworthiness of a company -- may be the next crisis area because the market is unregulated, and it's impossible to know whether counterparties can meet their obligations in the event of a bond default. The market has a notional value of about $45 trillion -- or about half the total wealth of U.S. households.

Soros recommends the creation of an exchange with a sound capital structure and strict margin requirements, where current and future contracts could be traded.

The cause of the current troubles dates back to 1980, when U.S. PresidentRonald Reagan and U.K. Prime Minister Margaret Thatcher came to power, Soros said. It was during this time that borrowing ballooned and regulation of banks and financial markets became less stringent. These leaders, Soros said, believed that markets are self-correcting, meaning that if prices get out of whack, they will eventually revert to historical norms. Instead, this laissez-faire attitude created the current housing bubble, which in turn led to the seizing up of credit markets and the demise of Bear Stearns, Soros said.

Read the above carefully. This is what Floyd argues from the soapbox on regularly....supply side economics is a Republican smoke screen, with no proof or validity. No comments on Democrats here, but a huge criticism of Reagan, Bush I, and "tough boy" Georgie...each has made the wealthy richer in corporations and top earners, and each has dramatically affected the economy long term. All FACTS prove this, all rhetoric is typically what the average voter believes (lower taxes, "let the markets decide", thinking)-Floyd

To avoid a super-bubble in the future, Soros said banks must control their own borrowing. They must also curtail lending to clients such as hedge funds by demanding greater collateral and margin requirements on loans."