Method of the Market

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

or

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

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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

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.