Friday, July 13, 2012

Educational links to Buy/Write and Option Spreads

from Morrisse on BCBD

a worthwhile webinar recording for someone interested in the Buy/Write option strategy of increasing your income using options……Costas Bocelli
Here's your link to the presentation ...

or the Seven option spreads for bulls, bears, and everyone in between webinar…that was shown this week

Seven Option Spreads for Bulls, Bears, and Everyone In Between

I though t both of these presentations wheree excellent….
have some fun with these butttt they do take some time..

Trade rules from Dennis Gartman

On the Friday after Thanksgiving, he publishes his "Rules of Trading," adding to them as wisdom increases. Here is today's list:
1. Never, under any circumstance add to a losing position.... ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!

2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.

3. Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of
mental capital.

4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is "low." Nor can we know what price is "high." Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed "cheap" many times along the way.

5. In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident; it is not, and it is a lesson learned too late by far too many.

6. "Markets can remain illogical longer than you or I can remain solvent," according to our good friend, Dr. A. Gary Shilling. Illogic often reigns and markets are enormously inefficient despite what the academics believe.

7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds... they shall carry us
higher than shall lesser ones.

8. Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect "gaps" in our nearly thirty years of watching markets; when they happen (especially in stocks) they are usually very important.

9. Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when tradingpoorly. In "good times," even errors are profitable; in "bad times" even the most well researched trades go awry. This is the nature of trading; accept it.

10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market's technicals. When we do, then, and only then, can we or should we, trade.

11. Respect "outside reversals" after extended bull or bear runs. Reversal days on the charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and respect even more "weekly" and "monthly," reversals.

12. Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.

13. Respect and embrace the very normal 50-62% retracements that take prices back to major trends. If a trade is missed, wait patiently for the market to retrace. Far more often than not, retracements happen... just as we are about to give up hope that they shall not.

14. An understanding of mass psychology is often more important than an understanding of economics. Markets are driven by human beings making human errors and also making super-human insights.

15. Establish initial positions on strength in bull markets and on weakness in bear markets. The first "addition" should also be added on strength as the market shows the trend to be working. Henceforth, subsequent additions are to be added on retracements.

16. Bear markets are more violent than are bull markets and so also are their retracements.

17. Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are "right" only 30% of the time, as long as our losses are small and our profits are large.

18. The market is the sum total of the wisdom ... and the ignorance...of all of those who deal in it; and we dare not argue with the market's wisdom. If we learn nothing more than this we've learned much indeed.

19. Do more of that which is working and less of that which is not: If a market is strong, buy more; if a market is weak, sell more. New highs are to be bought; new lows sold.

20. The hard trade is the right trade: If it is easy to sell, don't; and if it is easy to buy, don't. Do the trade that is hard to do and that which the crowd finds objectionable. Peter Steidelmeyer taught us this twenty five years ago and it holds truer now than then.

21. There is never one cockroach! This is the "winning" new rule submitted by our friend, Tom Powell.

22. All rules are meant to be broken: The trick is knowing when... and how infrequently this rule may be invoked!

TSA new duties

TSA = Tomato Survellience Agency

People using cash for transaction and people growing their own food are now being considered “home grown terrorists” since they are hurting US businesses that are improving the world through genetic modification, fertilizers, and pesticides.      Although the HGT’s will not be prosecuted criminally, they will be taxed at market rate plus 20%.   

Accordingly, Obama has authorized the TSA to enter peoples home gardens without warrant and at any time in order to measure the crop production, taking measurements of the circumference of tomatoes, for example.    This will then autogenerate a tax invoice which will result in a direct debit from the customers accounts.   

Should the accounts fall below zero, a warning letter will be issued requiring the customer to immediately bring to the TSA gold or silver coinage to cover the market value of crops plus the 20% industry profit stranded cost, plus a 30% fee for precious metal handling.   This must be completed within 5 working days, or the TSA will confiscate the passports of everyone in the house, including any twin brothers or sisters  that may live anywhere in the US or in any country kowtowing to the TSA beatdown.

Future advance to save the taxpayer money will use low flying drones to collect HGT crop production value, using a Goldman Sachs produced algorithm to calculate eventual market value of tilled land and actual crops detected, and autogenerate a tax bill.     Obama calculates that this will save the American Taxpayer over 7.8 Billion per year, while protecting US Corporations and foreign corporations which provide campaign contributions.   

Obama gloated “It’s another Win, Win, Win public private partnership using technology to increase our freedom and the American way of life”

Welcome to the New World Disorder ™ making sure that American Corporations are safe from sovereign individuals.

Pimping the Fed, Fast Money with no Brakes

Heh! Does that thing have a Hemi?

Funny how the Fed is now pimping themselves as the savior of the stock market.    Egotistical pat on the back?  Or just a primer for the Dem incumbent election year run?    Justification for QE, perhaps.

This article from "Fast Money"--still can't believe they continue to use that name.

Market Savior? Stocks Might Be 50% Lower Without Fed

Published: Thursday, 12 Jul 2012 | 3:15 PM ET
Text Size
By: John Melloy
Executive Producer, Fast Money & Halftime

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A report from the Federal Reserve Bank of New York suggests that the bulk of equity returns for more than a decade are due to actions by the US central bank.
NYSE Traders
NYSE Traders

Theoretically, the S&P 500 [.SPX  1349.95    15.19  (+1.14%)   ] would be more than 50 percent lower—at the 600 level—if the bullish price action preceding Fed announcements was excluded, the study showed.
Posted on the New York Fed’s web site Wednesday, the study sought out to explain why equities receive such a high premium over less risky assets such as bonds.
What they found was that the Federal Reserve [cnbc explains] has had an outsized impact on equities relative to other asset classes


Trying to convince people that raping the currency that they have most of their savings in is actually good for you.  

TLT looks tasty for a short soon.

Thursday, July 12, 2012

Long Cable, Short HOG

Cable is my own work, and swimming upstream will be a short HOG (BPT idea, great H&S)

We called for short FIRE also and that it working nicely, big retrace right now mid day.

Volatility Ratios

One of my former "secret indicators"
This one deserves 5 minutes of study.
You don't want to be on the wrong side of  this spikes, however, trouble is we had a stealth combo spike up spike down that is clear on the candle charts.

 Corn is playing classic shenanighans after a parabolic move

Of course the news story is drought destroys corn crops in US, aka Grapes of Wrath Redeux

Wednesday, July 11, 2012

Fire in the Hole!

This is the FIRE backtest on the Bernoulli 133 channel line.   The Bernoulli system I use is unique and projects prices into the future.   Similar to a Camarilla however, Bernoulli also recognizes that prices move in channels of various timeframes.    TO SUM IT UP -- the flash crash was a ping of the B133, the B133 backtest is an especially powerful signal.

FIRE did the ping (and watch they often come back for a double if I got in short AFTER the backtest, I would certainly have my stop above the Bernoulli like nothing more than to have smart guys catch the move properly, get into profits, "protect profits" with a tight stop, and then go back to the same resistance line to wipe out the smart guys....then the smart guy stare like deer in headlights while the real move downward commences.    THEN 2 of 3 days later, the smart guys stinging from missing the move, jump in, and whammo....big retrace for another even bigger stop out.   

Moral---Dont be a "smart guy"

HT Classic Indicators

Fear Factor, 78 Fibo retrace on Fear and now ....more fear? These patterns certainly allow for it. However, the cumulative up down volume pattern have had 4 mostly down days now, although the advance decline issues has tried to claw back up on 2 of those days. It is odd to 4 sell volume days in a row, even odder to get 5, so may be that says we are due for relief rally of sorts.
Tasty short FIRE
Originally a BPT watchlist
Asset class total says that stealth QE is working although slowing somewhat
DVN looks perfect for a long, bought more calls on that dip into the egg
From a guest, dont fight this mini Egg of Doom, however, the measured move could be over.
Volatility on Steroids -  it like to meander around between the yellow lines, sometimes for many months before launching up in a big scary move, this work the same as VIX just better and less directly manipulated.

Tuesday, July 10, 2012

Fundamentally Speaking -- a Bubble in Tragedy

Wouldn't it be nice to go a full year without yet another World Record Disaster?

2008/2009 Greatest Financial Crisis

2010 Gulf Oil Spill

2011 Fukushima

2012 ?   Will the Liebor Grand Thievery outpace even the Euro Debacle

Monday, July 9, 2012

Grains and stuff

Looks like alot of grains Corm, Soybean, Wheat have likely put in a blow off or Doji type of top.

Lots of longs could get caught deer in the headlights on this one.   

Not following the fundamentals closely, just that super hot spell may be getting relief.   Whatever, the charts speak on their own.

Stopped out of Cable long, just barely, did not go back in, had too many "all the same bets"

FIRE is a nice short on BPT watchlist.    Sign up for BPT using link on right, one nice quick trade pays for the whole year of membership.

Sunday, July 8, 2012

DVN Looks Great unless Mad-Max world appears

Long Gold and Cable, Short Bucky and Corn

Oil and Bernoulli

Oil and its Bernoulli Channel (long term)

Green is the B100, the main channel
The yellow is the B133, usually the bounce point for minor "expeditions" from the main channel

The Salmon color line is the B4343 (its complicated) but often functions a catch line, to "catch" a false break