Taking a moment...

I just wanted to take a moment and reflect on my outlook on the markets. First off, I do not mean to be discouraging, or "doom and gloom", regarding the average trader or market guru (or proclaimed guru). Statistics show that the vast majority entering the markets, looking for wealth and prosperity, come to a harsh realization sooner or later. Some lose quickly and vow to never return, some lose over a period of time and wash out, others lose small fortunes before discovering some of the keys that lead them to navigating the market to some degree of success. Very few people are cut out for this profession. Yes, this is a profession. Please do not expect to pick up a few books, browse them over the weekend, and gun at the markets ready to slay some dragons. Smoke, mirrors, lies, and deciet are abundant regarding the financial markets. I am not here to discourage anyone, but I am not going to sugar-coat anything either.

The recent economy, with loss of employment and hope for many, has some individuals turning toward the markets as a last hope, or on a revengeful vendeta. Collect your thoughts, if you are looking for either of these things, just save the money. The markets are no place for emotions, nor revenge. You would not expect to attend your first medical seminar and attempt surgery the following day, respect the profession, and treat it as such. Under most cases, emotion renders biases to speculation, in my opinion, markets are no place for that either. Yes, we need speculators, but only a handfull of people are actually going to gather any wisdom from the things I speak. I am not going to stop those hell bent on contributing their coin.

At what point do people say "enough is enough"? When do you throw in the towel? The American dream of wealth and prosperity is alive in most of us, a dream every person chases and so few find. On one hand, I try to help all those I can, for I have been in your shoes and would have really appreciated some perspective myself. On the other hand, I hope more contributors are entering the markets to contribute to my well being and the well being of others who support the markets. This is a profession where the most well informed survive. You need to absorb and question every piece of information you receive, evaluate its true worth, and ultimately discard the majority of it as worthless information.

Here are a few questions to ponder over the weekend.

Markets are rhythmic. Why? If markets respond to news and world events, what kind of precision is required to move thousands of financial instruments lock-step with one another? Does everyone, in every trading pit, in every exchange, all listen to CNBC? And base trillion dollar trades off the way a certain individual hesitates or stutters while answering a question? Don't let good common sense escape you.

In every televised picture of a trading pit, what do you see on the screens which adorn every wall and half the air space within the room? I'll make this one multiple choice.

A. CNBC
B. Jim Cramer
C. Numbers
D. Nickelodeon

Why?

Does anyone walk around in the pit with a "world news Bat phone"?

The markets, world-wide, move in precision rythmic motions, would a common language need to be spoken through this information to achieve this? How could it not?

Enough for tonight, have fun!

Market Regulation...

Many of my readers know my reasoning behind the presence of market regulating entities. This is not only a theory, but I can prove it by the price action of any charted security, ETF, Index, Future, or currency. Let me take things a step further and explain how these regulated vehicles are affected within a market such as this.

The markets, systemically, are very similiar to the human body in nature. When endangered, or under "system shock", the body will shunt circulation from the peripheral areas of the body to the core life sustaining organs. This includes the heart and lungs, even the brain is sacrificed, for the body does not care if you are brain dead, as long as you are breathing!

The markets first line of support, under normal conditions, is the ongoing speculative battle of the general market participant. This includes you, hedge funds, brokers, etc... When general market bias leans to far in one direction, or the other, the regulating forces start getting involved. They keep things in check, allowing the forces of the market to move in a controlled fashion. If market participant perceptions get skewed too far in one direction, they will set things straight.

These regulating entities can also get caught off guard, by not alloting capital to control the move, or other ways of turning the market are unsuccessful (news, rumors, etc). If one of these entities are forced to cut losses, the market as a whole, needs to absorb the additional load. Other entities step in to help control (it is of benefit to them, they are not just doing it as a favor). When capital gets stretched to the outer boundaries, amongst all these entities as a whole, they begin to shunt capital to the core market areas, assuring a full on meltdown does not happen.

A meltdown to this extend has never happenend in the history of the markets, and if it ever did, your puts and shorts are not going to pay out either, the country would most likely fall under Marshal Law at that point. The major market indices are fully supported now, and have been through this entire decline and all declines of the past. ETFs also fall into this catagory for the most part, they are very liquid and require pretty strict regulation themselves. Outlying securities will be the most impacted, they will see extreme moves without compensatory counter-moves. They WILL compensate, but the capital utilized for its support is more scarce and has to be utilized with a little more precision. A security does not extend down and then go bankrupt, it needs compensated first, look throughout history, most surprise events go contrary to the immediate trend which was currently in effect, thus 100% moves always moved to the benefit of these regulative entities.

Working FOR the market, in support of its function, and in support of its regulative entities will always work in your favor. There are defined rules within the markets, and when capital is cut back and securities are sacrificed, there is still a safety net in place. The draw-back, of course, is draw-down! Those with the highest tolerance to non-realized losses will prevail, those that fold under pressure will absord the losses. Have a good weekend, I will attempt firing off a few more posts throughout the weekend.

Added: Oh, what got me started on that subject.... The DOW is only about 1% from that maximum extension ever seen within the markets!

Bag N' Tag!

This mornings lower open is having me pretty lienient on my buy orders, I will be adding to about every position at the open, including multiple lots on ALL, KRE, and WYNN. The lower we push, the more I am picking up! Shake N' Bake baby!!!

3 Largest positions

Although the DOW appears to be closing in the red, my three largest positions are green, WYNN +3.0%, KRE +4%, and ALL +6%. The markets appear to be correcting somewhat. Have a good evening.

The DJI and RUT have not compensated the drop yet, I would not advise being short....

T-Bagging the markets...

As far as my original trade matrices on my current trades, they remain unaltered. Hence, the positions listed remain unchanged. In addition to running my matrices, I typically include an extra profit technique. I call it "T-bagging", not to be confused with the other type of t-bagging. Withing the price extension and its compensating price area lies a "de-leveraging point". At this level, if your position is too large, you dump some (for even or slight gain). You then add the "core" position back in as the price moves against you again.

This technique can be used to lock in profit also. For instance, if I am holding 4 lots off ALL, and the position is up 20% when price hits 19.50, I can sell all the position, or partial, and add them back in at 19.20, 19.00, 18.80, and 18.60. If I accumulate all 4 back, I am at a much better cost average and the compensated run is still uncompensated for. Hence, ALL still has obligation to the upside. If we continue down, the original matrix adds in at one lot per tier.

The core positions, on the standard matrices have had no additions, or sells as of this point, all positions remain unchanged.

Got Money?

My trading partner sent this video over to me, he states I am the guy in the red hat! I rap, he sings!!!

For some reason, his professional career leads me to believe this is not his typical genre. But.... if you ever seen his hopped up car, it may have you wondering!

Clap your hands if you have the bank roll!

Click the link below to view the video (may be some adult language!)
Got Money?

WYNN position...

Whatever WYNN said at their conference and earnings.... it appears the sheep are shaken. Awesome! I'll be adding delta/lots at the open. Anyone recall ZION? Up like 75% after bad earnings? Stocks, and the companies they represent, are not linked. Their price movement is not directly correlated to the companies worth, for who REALLY knows what that is? Just the people who want to take your cash! USO looks to be opening near exit, I got my eye on it.

Any further strength on the financials and I'll start piling on some short positions. These positions can be over-alloted for in capital terms, for they hedge at the same time....

Current positions

Note, out of all my open positions, ORLY is weakest. I have sold a few calls, then placed an immediate order to buy them back slightly cheaper, also known as "tea-bagging"!

Positions and Lot Sizes

There is now a link in the right side bar. It lists current positions and there relative size to one another. I will be publishing an additional document shortly explaining why the layout is like this, and what my expectations of the market are reflected by these numbers. Have a great morning, I will be posting more soon.

A brief explanation of using the "Positions and Lot Sizes" document has been published. You can find the link in the right side bar.

Conspiracy Theories

Did you ever ponder this question? If there was a way to make coin on every trade, to what extent would the efforts go to conceal it?

How's this for one example. This is true. The information you need, to back-test, whether auto-mated (which you can't do!), or manually, is not available!!! Well, not without shedding a significant amount of coin. It is done pretty much "on the fly". Don't get me wrong, it is extremely precise and organized, with a complete plan. But the information and pre-requisites required for the trade need to be monitored "on the fly".

So, the information required, is not available, and even when acquired through extraorinary means, you can't prove it via back-testing!!!

There are things, that are not meant to be known.

Again, have a good night!

And as my friend "Student of the Trade" once told me, "Winace, you're just crazy, until proven eccentric". There is only one pre-requisite which defines crazy from eccentric, and that is copious ammounts of cash!

Extension levels...

I am not sure how many old school people are still around, ones that have followed me for some time. If you were to recall, the main indices of DJI, NDX, COMPQ, and the SPX had maximum extensions that were never surpassed in history utilizing my analysis of measuring them. That extension was in the 10-12% area, the ETFs are a little more volatile, but they remain accurate when compared to each other (DIA, IWM, QQQQ, and SPY. The max extension ever run on them was about 18% which SPY pulled off in this decline. That 18% was to the upside though, which basically re-inforces the dangers of the counter-trend rally (correction). These moves are much more fierce than the continuation of a primary trend. The DJI has accomplished topping 10%, the chances of that counter-trend rally, no matter how short lived, just increased 10 fold. DIA has matched the 10% extension of the DJI, which, in itself, is pretty rare. The ETF's are much more volatile (in aspect of my analysis), which means they reset much quicker. Looking at the bigger picture, we may be setting up for a quick run up, followed by more strength of a slower nature before the potential down-draft continues (or may not, have to look when we get there!). With any luck, we will open lower, significantly lower, triggering my buy orders before a sharp incline. Have a great night, see you on the flip side!

Sheep call...

Here we go, my "Old School" sheep call. Basically, based on my technical analysis, which I rely on absolutely for nothing, I see the DJI bouncing between 7200-7217.

I think WYNN has reached its selling plateau. When an individual stock makes CNBC... the gig is up. They entitled the article "How bad can it get?". They bashed it pretty good, of course, that is good for me. It attempts to shake those people out and liquidate what they are holding. This gives me the opportunity to buy more at lower prices. The selling pressure just was not present though, it appears tapped out, I would expect the correction to begin rather soon.

As far as my other positions, I sold BTU at the open, for about 10%. I am very close to adding on CAT, other than that, there have been no orders triggered at this point. Be careful on the short side, not saying you won't be right short term, but the surprise potential is not in your favor!

UPDATE:

Nothing pertaining to the current positions, but..., if anyone knows of a good desktop sharing software (preferably free (cause I like a bargain ;-)), I am entertaining sharing a paper account (privacy of my clients) which will be accessable via market hours. Better to see winning trades than to hear about them, right?

Sell orders in...

USO and BTU look as if they will surpass target at the open, orders to sell are in and will most likely trip the "Sell to close" contingeant orders. You will notice, our positions exit in tiers, it has the effect of scaling out, but with the entire portfolio of trades. Have a great morning!

Questions...

Everyone feel free to ask whatever questions you like, via email, or the comments section. I often get the following question:

"Is there any books or sites that you can recommend I study that can help me start to understand your trading style?"

Before I came to the understanding of the markets I have, I found no book, or other educational material, to assist me to come to this understanding. After figuring out what I have, I searched more intently, just to see if this information was available anywhere. The answer is simply no.

What you need to know needs to be self-discovered, it is taught, to the masses, nowhere. There are many reasons behind this, let me attempt approaching this from my perspective:

First off, these are things that are passed from generation to generation. Do you notice that once wealth is within a family, it tends to stay within that family?
Sharing this information is detrimental and self-defeating, it would reduce profit to those who regulate the market and the markets would be more regulated by the speculative crowd utilizing these techniques. Hence, the once "sheep" would be cutting into the profits of those professional regulators.

I have discovered these market "rules" through relentless study, and it puts me in a unique situation. Discovering that profit can only be made consistently, every time, required significant capital put me out of this crowd. Making money takes money, money is power within the markets, that fact is plain and simple. I had no initial capital investment. At one time, back in my own "sheep" days, I utilized TA and made some profits, but, eventually I lost my 2K account. I did profit more than I lost, but I also needed to support everyday function of a household which took the majority of my profits to do so.

So, here I am, knowledge beyond belief, knowing the potential I can achieve, but without capital. I could approach this a few ways. Sell the secrets? Ummm.... hard to place an amount on an endless goldmine for the right person. Charge 20K so someone can turn greater than 100% annualized profits on a one million dollar account? Sorry, would die with my secrets first! Why would someone pay a significant amount without seeing proof? They wouldn't. What proof did I have without actively trading? None. The more I taught (or vaguely hinted at), the more frustrated I became, knowing others where profiting off my knowledge without any return to me. In turn, I kind of achieved an attitude issue. I was always pretty much a smart-ass, but now just a pissed off smart-ass! I currently trade two accounts, both without ONE SINGLE LOSS. But, here is the problem....

The first account, I am training the individual to trade this technique, once all contractual obligations, on both ends, are met, this individual accesses large amounts of capital and retires from his current job to trade the markets. Great for him! In the mean time, the profits made from that account, on my end, have been utilized to support everyday living (for it is not a huge account). So, contract ends, I am back to the starting line......

The second account, is an account I manage for a retired indiviual. Apparently he still has significant income, for he periodically puts in more capital. There are no obligations, no teaching, we just make money together. A great relationship, which I am sure will last quite a long time. I average about 10% on his account per month, I could achieve more, but I am extremely risk adverse. My livelihood depends upon this account, and thus, I take even less risk. At no point has greater than 20% of the total account been in the market at any time. His account alone, if it were my personal capital, it would be more than enough to make a living off the profits. Getting a percentage of these profits, it may take a while before we get the account to that point.

So, in a nutshell, knowing how to make a fortune, without the means, is frustrating. I refuse to hand out these secrets unless it pays off my hard work (years of it!). Once I do accumulate significant capital, what benefit would it be to me to share these things? Absolutely none, in fact, it would just reduce potential profit. For this reason alone, you will find this in no book, article, magazine, or seminar. Those who know these things do not need returns from these types of items, anyone over exuberant on teaching you something for nothing just want company in their journey to disaster. If they charge a premium (ie. book sales, seminars, etc.), it is because they can not achieve what they are trying to teach..... success.

When I did figure these things out, admittedly, I was pretty pissed. Knowing they stick it to the small guy on such a grand scale. But, i have realized I need to play by the systems rules to now exploit the same type of guy I was not too long ago. Ironic, and yes, it sucks, but now, it should just suck less.

I could very well publish bullshit containing books, to supplement more income while further confusing the public, which enhances my returns within the market itself! But, I am not taking it that far. If I were to publish a book that taught you to make money on every single trade you made, without fail, do you think it would make it passed the publisher and to the shelves of your local book store? Yea, right... remember, money is power. If I were to jeopardize the profit of large market "entities" who contain almost unlimited amounts of power, just what do you think would happen? Winace disappears, book is burnt, and on life goes with the rich getting richer, and the poor getting poorer.

The whole scenario kinda sucks, don't it? What continues to elude you will continue to elude you, because those that do know (and have the accounts to prove it) will continue to fill you full of shit to further their own gains. Take the bull, or bear, by the balls! Either step up and learn it, without books, seminars, and so forth, or hire someone that requires the capital to continue furthering his own gains and brings you along for the ride, beacause, once he achieves these gains, he no longer has need for you and will end up selling you some bullshit book. Enjoy the rest of your weekend!

As to the original question....
If your account is less than 2 million, study the mechanics of options and how that leverage can assist or kill you. Your gonna need leverage, the smaller the amount you can get away with, the better. Other than that, disregard all market related bullshit, it is all "smoke and mirrors", whether intentional or not, it is bullshit. It is easier for me to teach someone who knows nothing about the market than it is to "un-teach" someone who thinks they know some basic knowledge. Study books on math, physics, mechanical engineering, apply what you know already even, I can make an analogy out of almost anything to help you more clearly see the trees within the forest. Being over-educated with false information is worse than not knowing anything at all.


Update.... God... you GOT to be shitting me! Master??? I knew I should follow him!!!

Shake N' Bake!!!

Long contingeant orders entered on BTU, CAT, and RIMM. If they create new lows for the week, I'm in! Let's do this....

Blog chatter...

There are a few blogs I drop in and read from time to time. It is more to see the comments of people I used to speak with, and chuckle to myself with the majority of the comments by those who can not see the forest. As I read the comments, I am really happy I do not get these comments here. First off, If your trading TA, what the hell is all the economy and political discussion for? Second, if your gonna spam your blog, just do it once in a while. I see the same comments at every blog, "come read me!!!". I see no contribution of valuable information, and disgusted by the ass-kissing. Yesterdays loser is todays hero, and the biggest hero strokes the used to be loser..... god, one big sheep-fest....

Internal channels

The technique I use to trade is all based on the averaging down process off of extensions. The ratio of the decline when view in context to the retrace creates channels within a chart. When "batch" trading, or trading multiple issues based off an index, the market regulators create channels within other channels of a chart. This is the reason you see multiple channels within channels and within different time frames on a securities chart. For instance, if the SPY and SPX were extended to the downside, I may take 10 issues within the S&P and buy lots all triggered off the SPX itself. In this case, I do not care what the individual securities are trading at, and with enough capital it starts to create it's own channel within the chart. In this method of trading I can hide huge amounts of volume if required, and limit risk by spreading capital over multiple issues. When the index triggers an exit signal, I exit all trades within that basket at the same time. Now you know why multiple channels can be found in the same, and different, time aspects within a chart! Every trend-line has a parallel, I assure you! Go check, if it ain't there, it WILL be! This is triangulating a channel, find a trendline, drop the parallel, and shoot the bounce that is to come! Later!

The general market condition...

There are way too numerous opportunities lying out there for me to even mention. The markets are extended downward and due to recoil. Now, by the term "extended downward", this is MY definition of extended. Markets can appear to drop off a cliff and never become extended. These markets are truly extended and ripe to bounce. I am going to work tonight on setting up my matrices for a basket trade. This is where I will take a group of 5 or more securities and plot their entries. I will average their prices and entry levels to actually trigger entries. Because when this market pops, some issues are gonna rock. Now, this may be very short lived. Unless you shorted a few weeks ago and did NOT add to the position, this rally is gonna be enough to suck your profits dry and then some. If you are short, scale out, if not completely take it off the table, if it is not too late already. DIA, DJI, NDX, SPX are all extended, along with at least 100 of the 379 in my watchlist (stopped counting at 100).

I am typically not incorrect, be careful. If you start building a long position, scale in in small increments. If it goes down further, GREAT, you can get a better cost average. If it goes up, ride the profits. When I start exiting left and right, the ride is about over (but not guaranteed, just that obligated objectives of these issues have been met).

As far as todays positions, I added to WY, WYNN, and KRE, all one lot each. ORLY was a short entry, the first add was almost triggered. I entered a long on FLIR at the close. If we gap down in the am, I may just start loading up on more positions (if I have time to prepare the matrices!).

Entered Short

ORLY, 1 lot, short entered

ILMN Closed

ILMN was exited, 15% gain booked. We added one lot of USO when ILMN exited. Currently we are 100% long with about 15% of our available capital, S&P adjusted BETA around 1000.

ILMN, only red on my watchlist...

ILMN exit coming up, it is the only down stock whiich I am wayching, and my only short. Exit within 0.30

Todays transactions.

I did add one lot to WYNN, in addition, I started another trade matrix on WYNN using low delta'd call options. When WYNN gets its game on, it's gonna rip.

The earlier mention of candlestick trading, I'll make a few comments regarding this now. Keep in mind, when I was heavily involved in technical analysis, I did place some importance on candlestick formations.

Here are a few points. First off, many who follow my commentary, and even more who do not, should have come to the realization of news and its place within the markets. News follows markets, markets do not respond to the news. Also, through my analysis and trading analysis/technique, I can not express this point more. When markets are obligated to move in a direction, regardless, they will do it. Markets are regulated, steer clear of emphasis on the economy, news, bail-outs, earnings, and so forth. These will be used to explain the move, but they are not within themselves the catalysts.

So, if you agree with the comments above, if not, just humor me, why would markets distinguish from one day to the next? The numbers, and ratios of these numbers, the basic principals of them do not change overnight. So why differentiate 4:00am ET from 9:30am ET? This is one thing candlesticks do. If you started the candle at 12:00 and ended it at 12:00 the following day, would the candle not take on a totally different pattern? The markets are fluent, there numbers worked by professionsals due not take into consideration of time lapses between trading sessions, so why should you? Markets gaps between these time frames (overnight) are definitely exploited through professional trade, but only slightly different than if the price actually traded through that range.

My particular trading technique, of identifying entry areas, never takes into account the larger picture. I have not looked at a daily chart in ages, although, I am not a scalp trader or intra-day trader for that matter. Most of my day is spent scanning for opportunities while kicking back at Starbucks. This technique has served myself, and my partners, rather well. So take my opinion for what it's worth,an opinion.

To add to that comment of daily charts being almost worthless, I am under the firm belief, actually even proven to my satisfation, that the markets are actually controlled on a very short time frame. The consitant profiting professionals provide liquidity and take profits within counter trend moves. The main trend moves are totally reliant on the economy and the publics perception of such events. So, the proverbial market "sheep", and speculators, determine the overall trend. The regulators, which trade my technique on a much larger scale, keep things in check and get paid a premium for doing such. The guaranteed dime will always be better than the speculative dollar in my book. In hind-site, as most TA is, would this not explain the mass confusion in analysis if markets were controlled on a very short time interval?

Beating the drum on WYNN

I have been long and adding on WYNN, if you had not a chance to do so, picking some up heremay prove well worth the effort. Even some slightly OTM calls may pay off nice, due to the magnitude of the move I see coming. As of now, a target exists around 36.00. A full disclaimer, I AM currently in this position, and will be adding IF we see lower prices!

Positions and a few notes...

Good morning! I plan on writing up a very lengthy article a little later regarding candlestick reading and its pertinence, or lack thereof, within technical analysis. This is due to the fact that we have what is traditionally viewed a very bullish pattern setting up, the abandoned baby bottom. This pattern will typically be at the bottom of an extended down-trend, which is questionable in this instance. But more on that later.

Our current positions, and magnitude of these positions, are as follows:

WYNN, long, 10 lots
WY, long, 4 lots
ILMN, Short, 4 lots
USO, long, 2 lots
KRE, long, 5 lots

These are within the account I actively manage, my trading partner has positions similiar to these, although his lot size may vary slightly. Our trade matrices are modified to our particular entry levels. Typically, the slower person reaps the higher percentage gain. For example, if I were to start compiling a position in USO, long at XX.XX, and he entered 0.20 below that level, he has a good potential of pulling in more gains. This is a very laxidazical approach, and we do not sit in front of the computer all day watching positions. We enter, place in the next 5 buy levels, and occassionaly peek at the charts to see if our exits are near.

The basic principal we trade, is that no market trades in one direction, hence we fade these moves, compiling the position as it moves against us. If the position moves in our favor, we do nothing. This way, we are always positioned to exploit the moves of the market regulators against the crowd. The "lot" size listed above, in the stated trades, are the size which we trade. These may be options, or stock quantities. We add in even increments, for example, we start with 1 lot, add one, add another, etc, until our lot limit is hit (but then we free capital and add more!). We do not use stops, we do not takes losses, we never add to a winning position, we always add to a losing position. Welcome to the flip side!

On a side note, I will be adding a link to the right which lists our current positions and their sizes. I will also attempt to list the total cash "in the market" we are currently at. This will be a percentage ratio of our total available CASH (not margined) buying power. Currently, prior to the open, we are about 18% in.

UPDATE:

If you notice, at this mornings open, my 4 long positions opened up, my one short opened down. Either all my positions work in my favor (a counter-trend move), or they all work against me in a day (draw-down day). When the issues I am fading start moving in my favor, that is typically a sign that the counter-trend move has been initiated.

Pointers...

I have posted the following comments at another blog site, for I found someone which reminds me an awful lot of myself and my experiences.Someone who has traveled the path I found, but before I discovered it. I did not believe it to be fair, to post there and not have these comments available to my readers. So here is the copy.

XXXXXX, and others,

First off, XXXXXX, please let me know if I cross any lines.

To help place some perspective on the educators of market trading, I can share some of my experiences.

I frequently commented and placed speculative calls on a pretty high traffic blog site regarding technical analysis. My earie accuracy (although, in hindsite, more luck) prompted the fellow readers to urge me in the direction of starting my own blog, for which I did. Keep in mind, I paper traded the markets for 5 years before EVER laying down one dime, I realized early the hurtles placed against the average trader. Throw in emotions, spreads, greeks, and the basic human responses and you are pretty much done for (please do not let this discourage you, for it can be done).

Upon starting my own blog on technical analysis and the application of channel use within the markets I came upon another one of my great epiphanies (you will realize many of these during your trading maturity). This information started me to study even deeper within the markets. I though there was no deeper to go, but man, I was incorrect!

My revalations put upon me a moral dilema. The use of technical analysis, alone, was very misleading. The things I was blogging began to take on a misleading tone. I was mislead from day one with market educational propoganda, and I found myself pretty ticked off about it. I read over 200 books, to find I wasted my time, because 99% of these were pure junk and designed to bring in "new" money to the markets.

So, where do I go from here? The things I was teaching, were now conciously misleading (before I did not realize I was doing my readers more harm than good). I was correct enough to allow them hope. The market mechanics I discovered were not anything I really wanted to teach, for this information, released on a mass scale (if possible, for no book would pass the publisher containing it) would actually work against itself. It would reduce volatility to the point where it would not be as profitable. The misleading educational material is designed to create volatility while bringing in new money.

So, I first attempted to "hint" to my readers. This was more confusing to them than me just leaving things lie and quiting the blogging all together.

Most peoplesearching out the "holy grail" of trading want things handed to them, a person to follow, a shepard to lead the sheep. There is a way to trade these markets coonsistantly profitable, but flat out teaching this methodology is profit capping, and potentially dangerous in many ways.

So, a few pointers from me, and keep in mind, it is only one mans opinion.

1. Do not believe everything you hear or see, this regards trading techniques, news, or anything that has any reference to the markets. This is smoke and mirrors.

2. No individual can say buy here, sell here accurately. Markets entries and exits are not static, these targets always move, and they need to be tracked.

3. Whether intentional, or not intentional, most educators regarding the markets are misleading. They contribute to the smoke and mirrors in one way or another.

4. Any individual that DOES know how to trade for profit 99% of the time, will appear very vague in the comments regarding your education, learn to read between the lines, they want to help, but not on a mass scale.

5. Draw-downs are a way of life. I consider draw-downs as losses NOT realized, once they are realized, they are then losses. Less than 2% of my trades do not experience draw-down of some magnitude or another. Those most adjusted to this realization use fear and greed against the masses, for we are on the other side of the trade which you are now excited about!

6. There is a great time commitment to learning how to trade, do not hurry, you will think you have the ideal trading technique many times along the way. I am an engineer, who commited 20 hour days, 6 days a week, for 5 years into studying the market. You may be able to do it more efficiently, but you will be discouraged a great many times. Hang in there, if you have the dedication that THIS is for you. Believe me, it is not for everyone.

Please keep these things in mind, for I have come to that "line" which I will not cross myself. There is a reason behind why technical analysis works sometimes, but not others, and reveals some "organization" to price movement. Some slight details are not found in any book, but require self discovery, or an individual trainer, who does not train the masses via seminars and/or published material.

One more pointer to add, although, this one may be slightly discouraging. It is a way of the system, I did not design it, but it is a fact nonetheless.

It regards under-capitalization. This is the primary hurtle placed against the average Joe. Without adequate capitalization, your probabilities of getting your proverbial "clock cleaned" are very high. Believe me, this is a big hurtle, for after realizing this, I had no capital to trade (never did have any). I am the average Joe, who worked paycheck to paycheck, robbing Peter to pay Paul. I actually had to prove myself to others, then trade their capital. So some advice, if you really want to make a go at this, raise capital. Vow to not put it into the market until you are certain you can come out un-harmed. DO NOT lie to yourself, for you will, I know it! Dig deeper, it's in there!

The PPT, aliens, and big-foot....

Many people believe in many things, does Santa exit? Well..... what qualifies Santa as Santa?

The PPT does exits, but to a varied extent. You may have watched the banking CEO's take some heat the other day on various televised channels. Did you take note when the phrases were use such as "When WE play the role of MM", and "WE are regulators of the market"?

I have attempted to drive this point home time and time again. Markets ARE regulated, much more than what you may believe. There ARE defined rules within the market, and how it MUST operate to keep its functional existance.

These "entities", which operate as market "regulators", do exactly that. They keep things "in check". When markets plummet, at an uncompensated rate, they will ensure the market rises to allow the "regulators" to average in, or deleverage as the case may be, to allow for profit and further support of the continued decline.

Now, these "entities" also play a reverse roll, when markets escalate at an uncompensated rate. They are providing liquidity and must be paid accordingly for providing this service. Once the market starts getting "out of check", they will be the market makers, providing liquidity to feed the heard and bring the hammer down.

Ratio's and percentages, along with incremental additions and/or lot position alteration allows these "entities" to fade and support the move when they are alloted enough capital. Upon retracement/compensation of the major trend, they can exit profitably, thus freeing capital to support a further move. Thus, they "regulate" the market. This is my style of trading, I do not make 40% plus gains in a single trade, but I do make profit with every trade. The further a trade carries in the primary "trend", the more draw-down I will see and more capital (which allocation maximum was already calculated)amount will be actually "utilized" to support the trade. Losses show via draw-down, but are never realized, just as a gain is never realized until the position is closed.

So, no the PPT does NOT exist, but the presence of market "regulators" most definitely does. Any surprise movement in the market is only a surprise to YOU, all sudden and violent moves move within the direction of profiting these "entities".

Opportunity for you!

I am looking to expand my capital allocation abilities. I am offering up an opportunity. Now, this will most likely only be extended to one or two individuals. If you are interested, or know anyone who may be, please respond quickly.

I do not lose money in the market, and I will open up all my trading activity to prove this. I am willing to do the following, look at it as a win/win relationship.

I am willing to pay for the use of capital. Basically, this is how it would work, of course, details would be worked out privately. I will put up 10% of the capital you have available to trade. I will trade the account, any losses would come straight off the 10% I contribute, if that 10% is depleted, you take your capital (100%) and walk. In this fashion, you risk nothing. Profits would be divided and distributed between you and I.

I am willing to put up 250K, hence, covering up to 2.5 million in capital (non-margined cash account). Typically, no more than 30% of the total capital is ever exposed to the market at any given time. Mull it over, but don't take too long, this offer may not last long. Anything under 250K of available captital will not really be worth the time, nor effort. I appologize to all of the smaller traders this offer excludes, it take capital to make profit, I do not make the rules, but I do need to play by them. Have a good night!

Quick recap for the day.....

Closed a long position in DIA (never posted entry. ETF trades are very aggressive and hard to keep posted real time). Remain long a few positions which we added to today. But, here is pretty much the day in summary:




Forgot to incluse this: Read the times, put the story together, sheesh.

All that bullshit...

One of my trading partners informed me off some ignorant crap mentioned over at the Slope. Something to the effect of Tim getting back his mojo after me harrassing him, and another commentor calling me a stalker. Here's the skinny. You newer members of the Slope, newer than two years anyway, have no clue who I am, or what I represent.

I do not sugar coat anything, and shoot straight from the hip. Ask anyone, anywhere, if I have EVER steered them wrong. In fact, ask anyone if I ever made a call that DID NOT happen. Seriously, Tim, myself, and many of the old-school people that dwelled at the Slope were a pretty tight group. Of course, things evolve. As long as Tim was a "student", of the "art", of technical analysis, everything was fine. At some point, he was no longer a student, but accepted the role as the almightly technical analysis god. Prior to that, we all learned, enhanced our practive of the art, and excelled. At one point, I stumbled upon some very intricate workings within the markets that explained "why" technical analysis works, and why it does not work. This is where things took a turn.

I always point out the flip side of the coin, in place of attacking me for the things I bring to light, take a moment and reflect on the matter. First off, even with my very high (>95%) trade success rate, you have severe draw-down days. Regardless of how you hedge, how you set stops (whether you use them or not), or however you do anything in the markets, you will have crushing days. Period. Sorry, it happens.... unless your Tim of course. Some people sling shit, just some do it more professionaly than others. Weaved within a web of an impossible amount of trades that can not be tracked, you can hide whatever you like.

The professional risk within the endeavor itself, is not a good business decision. If your living relied on book sales, charting, and income via technical analysis (whether you make profit by "using" it or not), you would not hang out the results of its use in a public forum unless you can make it look fool-proof.

If Tim had listed extremely poor results while utilizing technical analysis, what would the repurcussions be? Just think that one through.
So, as long as I was endorsing technical analysis and the use of a specific charting software, I was good ole' Winace. But, showing the truth behind the curtain is not profitable any longer. Technical analysis increases your chance of success only slightly more than a coin flip, since the flip of the coin in the market would only yield success maybe 35% of the time, bringing you success rate back to 50% is hardly an edge. Human emotions, stops, spreads, slippage, greed, fear, news, fundamantals, greeks, and worst of all, educational material, all stack the odds against you. Don't get me wrong, you can trade successfully, but the traditional crap you hear is NOT the way to go about it.

So, yes, I was a very big user of technical analysis, and many stated I was the best they ever seen. Even being superb at technical analysis, your chances are slim using it. Sorry, there was a time I lived and dies by TA, but that time has gone.

Speculators make the markets profitable, we take your money, along with all the unsuspecting investors. Your average Joe loses money in the markets, your average trader loses more. If you are REALLY good at TA, you may make some here and there, some will even make out well. This is the exception, not the rule. Volatility makes investors and traders lose more, and makes the professional profit more. To highten volatility, we need to cause confusion. Don't believe anything you hear or see regarding the markets, the effort put into the smoke and mirrors far exceedes the effort required to make money consistently. I can prove it, and have proved it. The way the market works makes it almost impossible to say "buy here" and "sell here" and give you profit. All targets and markings within price action are not static, thus, I may start building a long position in XXX, and eventually I will be right, guaranteed, it is just identifying those areas of non-static target prices and multiplicities of compounding the position.

The whole principal is very simplistic, although, explaining it, without flat out telling you, is almost impossible. I really do NOT give a shit what Tim, or anyone else does. Seriously, I, as I have always done, just try to get people to open their eyes, for most people can not see the forest for the trees. In the end, I assure you, I am the one left laughing.

So, anyone want toi talk shit, lay it down, put up or shut up.

You have questions, ask away, I really enjoy helping people, until they turn on me like pit vipers because I went against the "Don't hate me cause I'm beautiful" host.
If you read this and just shale your head, that's all and well, please keep contributing, your donations are going to good use.

Positions exits

I am out of all positions now save ILMN (short), and long WY/WYNN. I have orders to short pending on V. I am hard pressed to find ANYTHING to short, but inverses, on my 379 stock core list. Looks like more upside, but that is only odds of probability.

Positions update

The DOW was down quite a bit, my long positions recommendations of KRE, WY, and WYNN were all green, go figure...

I'll be scaling out of these positions, in the mean time, I have started accumulating short positions in AGU, NFX, and WLT. AMZN and ILMN trigger orders are pending...

Banned from freedom of speach???

A pretty popular brokerage had a weekly "wrap", I got banned from commenting, wonder who was behind this one??? Guess's???

Here is the pertinent transcript, amazing....

[4:51 pm] George Swanson: Click "no fit" on top of screen, you can then see the ticker
[4:52 pm] wayne jack: thanks George
[4:52 pm] George Swanson: Sure
[4:58 pm] George Swanson: unchexk "Keep proportions" then toggle in and out with the no fit button
[5:04 pm] George Swanson: Volatility is required
[5:05 pm] George Swanson: the more, the better
[5:05 pm] Cindy Faber: no, they are telling anyone who knows how to trade (and has personal Trading Plan rules to reduce risk) that now there is enough movement to have higher probablilty. Several weeks ago there was a lot of whipsaw, but few tradeable moves and if you remember, Tom Sosnoff recommended trading LESS back then.
[5:06 pm] George Swanson: volatility is required for the masses to lose money
[5:07 pm] Ranjit Boparai: do u hold cash at end of each trading day. george
[5:07 pm] George Swanson: no, and there are many George's here, just refer to me as Winace ;-
[5:08 pm] Ranjit Boparai: so you are long?
[5:08 pm] George Swanson: was way long this AM
[5:08 pm] Ranjit Boparai: and still are?
[5:08 pm] George Swanson: sold some off, still holding some
[5:08 pm] Ranjit Boparai: how did u know to go long in the am
[5:09 pm] George Swanson: markets don't trade one way
[5:09 pm] Wishkahjim Wishkahjim: tend continuation?
[5:09 pm] Wishkahjim Wishkahjim: trend
[5:09 pm] russell johnson: no one wants to hear about your good days and no one wants to hear about the your bad days... we need to have our own relationship with the markets
[5:09 pm] George Swanson: I have been long and incresing all week
[5:10 pm] George Swanson: Sure Russ!
[5:10 pm] Ranjit Boparai: yes russell but knowlegdge expands if we share ideas
[5:11 pm] russell johnson: yes,
[5:11 pm] russell johnson: and there is NOTHING like your own experience
*** A moderator has disabled your chat entry.

The slope of hope in the markets.

A slope where people hope and pray crap goes their way. Hope and luck is for suckers, and as far as Tim goes, you can kiss my ass! And anytime you want to publically trade against me, I got coin that says you lose. You're a sham man, but you lead market sheep into the pastures, so I don't have a problem with it, for it is their money, and yours, I take.

Out...

Exited PRU....

Update

Still holding long PRU, WY, and WYNN. Sheep are feeding on WYNN this AM, added a few times, and rolled deeper ITM, looking like a great position.

I am looking to acquire one more account, if anyone is interested in a managed account, or training, shoot me an email at channellines@gmail.com. One more account greater than 250K and my wife can quite her upper management job (give it to someone who is out of work). My contribution to the economy ;-)