July 2009

We hold a September 270 - September 510 strangle for 13.20 that we legged into and then gave up for dead, not for no good reason.  A payoff is still a longshot, but the way the stock has been moving lately, it couldn't hurt to remind ourselves that we do have a horse in the race. From a Hidden Pivot perspective, Gluggle could run up to as high as _____ and how would your strangle look then, Fast Eddie?

We took a good look at the August futures during yesterday's tutorial session, finding a few reasons why this rally should hit $1000 even if it is not the one that's going to get us to the Promised Land.  Two things to notice:  1) the last selloff failed, by a few dollars, to reach an $899 target that I'd flagged as a minimum downside objective; and, 2) the subsequent reversal has had little difficulty banging out a series of fresh impulse legs on the hourly chart. So what would it take to suggest the intermediate-term picture is more than just moderately bullish?  Answer: An uncorrected thrust from _____ to _____, creating a bullish impulse leg on the daily chart (see inset). We'll wait for this crucial piece of evidence before we get excited about the promising move off $900.

The Hidden Pivot Method is well suited to predicting boring stretches in the stock market such as this summer's, since the "dueling impulse legs" we often find in charts represent unsettled conflicts between bulls and bears. Generally speaking, the larger the time frame in which the duels play out, the longer the periods of tedium one can expect. The combatants are rarely perfectly matched, and we can therefore usually discern a bullish or bearish bias when we compare dueling impulse legs one against another. This we did during this session, looking at pictures of tedium, presumably with more to come, in, respectively, Comex Gold and Silver Wheaton shares.

This ETF has been in a downward spiral for some time now. There is currently upside pressure being supplied to the daily chart, but there has been very little movement in price. Price found support at the latest short cycle target. For price to start a meaningful up move it would have to go through ____ and then the first price objective would be ____ with a target price of ____. The 15 min chart has upside pressure in the over extended area of the chart. Price should find resistance at _____ with a D at _____. Look for resistance at _____. For the down move to start again price would have to go through _____ and then the first price objective for the move down would be _____.

I will have to say that it has been fun meeting a whole new group of people.  Each of you is unique in his or her own way.   I have enjoyed the back and forth with Hunt.  My wife and I still remember him fondly and can't figure out any reason for him to still live in Texas.  The chat room has been filled with grumbles of late claiming conspiracy theories.  Goldman Sachs has become the giant conspirator and the government and all of its agencies remain the great Satan.  There always seems to be someone or something that is doing you dirt.  Why don't you take a look at how this can be your edge?  My philosophy has always been follow the money.  I don't care if it is GS or the Fed.  Let them run it any way they want I'll just get on board and take my little piece of the pie.  I am not greedy.    So I don't care if gold goes to $1300 or back to $350, I will take my piece of the action and leave the rest to others.   Writing here has restricted my trading, but on Thursday I will start up again.   You should be able to consider the market as your private ATM machine and tap it any time that you need some extra money.  There are loses.    I know that I am not perfect and I know that the only one that is going to cost me money is me, not GS, the Fed or anyone on the floor of any of the exchanges.   Once you learn to accept the full reponsibility for your actions you will find it a lot easier to trade successfully because you won't be looking for someone to blame for everything that goes wrong with your account.   Each night

All of the numbers are located on the chart so I don't feel that I have to go over them. This is what my trading screen looks like. I have left off the Pressure indicator for clarity purposes. The daily chart still has upside pressure being applied to it. Price moving toward the____ level. Price did find support at the 907 level. The 15 min. chart has upside pressure being applied to it. Price found support at the short cycle po2 level and is currently oscillating around P for the move up at ____. The price objective on the 60 min chart at ___ is currently acting as resistance to a move higher. There is also upside pressure being applied to the 60 min chart. For price to start down again it would have to go through ____ and then _____ would be P and temporary support.

The bonds don't look like they are in very good shape.  They have spent the last four days trying to get through po2 on the daily chart at 121-14.  The target price for this move higher is 122-26.  For price to start lower it will have to go through 118-14 and then the first price objective would be 115-24.  There remains downside pressure on price, but price remains at the same level.  The 60 min chart has downside pressure being applied to it, but it is an over extended area and trying to turn up.  Price has tried to reach po2 at 119-21 with no luck.  If price can get through 120-11 then P would be 120-29.  Now the question is, are the bonds contra to the Dow?  If the bonds rally, will it be a flight to safety?

There are systems that are based upon money management alone.  The principle  is basically the 1/2 way to the wall principle.  If each time you go 1/2 way to the wall you will never get there.  I have heard so many say that they will take 10% loss or a 5% stop.  That like the 1/2 way to the wall theory is, if each time you take a 5% loss you can never be out of money.   A stop shouldn't be based upon financial pain it should be based upon the fact that the chart says you are wrong.  I use a 2% risk factor.  That means if I had a $10,000 account I could risk $200 on each trade.  I would then look for a trade where a move of $200 would make me wrong.  So the trade is adjusted to that risk parameter.  If it requires you moving down to 60 min. chart or 15 min. chart to do that then that is where you should be trading.  We always talk about risk. Risk is a major part of money management.  If you own a home you have it insured.  If you own a car, boat or airplane you have it insured.  In each case you don't expect or even think about having your house burn down, an auto accident or do you expect to die if you have life insurance?  Yet, when you put on a trade you don't think of insurance of any kind.  Here is a situation where you can lose almost everything you have in an instant and there is little or no thought of insurance of any kind.  Oh,yes.  I have a stop.  I remember the day when a friend of mine lost $80 million in a little less then 2 hours.  Someone else I know

The stock is in an up move with a target price of ____. Price hit PO2 at ____ and started a retracement down. Price has found temporary support at P for this retracement down at ___. For price on the daily chart to start a new move higher it would have to go through 38 and then P would be ___. There is currently upside pressure being applied to price on the daily chart. Dropping down to a 15 min chart you will see that price stopped just short of PO2=_____. There is about another___ cents left in the move on this chart. There should be a retracement from the ___ level Based upon the current high if price hits ___ look for support at ___. Price should hold above the previous low of ____.