12/31/2008

Happy New Year

The year known as 2008 is over.

I should have something profound to say.

I could point you towards the best whatever list of 2008, the worst whatever list of 2008, or I could make some fantastic new years resolution.

I won't.

What will 2009 bring us?

Thursday.

As I get older the years start to blend a little.

I do think 2009 will be very interesting, hopefully not as "interesting" as 2008. We are supposed to look back over a just completed year and think of all we learned, what we would do different, and what we would do the same. We do that for a while and then I think we forget it all rather quickly.

One way to help remember is to write it down. I do a year end balance sheet (net worth statement) for our family. I maintain this throughout the year but then again I'm weird. I would suggest you take some time in the first week of January and complete your balance sheet. It is the only way I know of to determine if you are making financial progress or not.

From a financial standpoint you don't know where your going and how your going to get there if you don't know where you were.

Or something like that.

The EIT told me only an old banker would do something as strange as a family balance sheet so to him I say a hearty BAH HUMBUG!.

And a HAPPY NEW YEAR!!

Ok ok, if I have to pick something I'll take a pass on the worst and choose the best.

THE BEST
The best picture of 2008 and the best story. The picture says it all, but read the story anyway.

It is simply wonderful.

My Old Friend

Crude oil.

Remember him, or is it her, probably him, it's crude.

Using the same trade criteria for crude, programmed in sierra, as the YM. Difference being crude oil actually moved. I will wait and see what the first week of January brings but may be moving back to crude oil if the YM doesn't start getting some intra day range.

Started looking for trades on the renko and 1 minute charts after price broke through (arrow) on the 5 minute chart with blue bars in place.

5 Minute Crude Oil Chart

1 Minute Crude Oil Chart

12/29/2008

Gazprom, once mighty, is reeling

As my American friends are rushing into their new socialized business empire maybe they should stop and have a look at their old Russian enemy to see how well it's working for them.

"A year ago, Gazprom, the Russian natural gas monopoly, aspired to be the largest corporation in the world. Buoyed by high oil prices and political backing from the Kremlin, it had already achieved third place judging by market capitalization, behind Exxon Mobil and General Electric." Andrew E. Kramer, International Herald Tribune.

(Click on the read more icon for the full story)

As far as trading goes there were no signals and no trades.

read more | digg story

12/28/2008

The Power of Yes?

After reading the NY Times story on WaMu do you get the feeling that they were running the business, a business funded by shareholders, with the capital is scarce motto I subscribe to?

Scarcity requires choice, choice means there are two options, yes and no. At WaMu no was removed from the equation.

To treat shareholder's and bondholder's capital the way they did is disgusting. The consequence to the shareholders is clear, the consequences to management and the board of directors are also clear.

There are none. At least not yet.

In Canada we have had the Minister of Finance and the Bank of Canada Governor telling the Canadian banks to lend more money. My response to those two gentlemen, as a shareholder of two of those banks, would not be fit to print.

I find it odd that with all the trouble in the financial system we still have not seen any reforms put in place. Other than the U.S. investment banks converting to commercial banks and lowering their leverage ratios there has been no change to the regulatory system that I know of.

There could be many changes I'm sure but two I would implement immediately are removing off balance sheet accounting and changing CEO compensation to include a claw back feature.

The off balance sheet accounting issues were at the heart of Enron's collapse and there is no reason for it to be allowed. All assets and all liabilities must be on the balance sheet with the rational used to arrive at their values fully explained in the notes.

CEO compensation must include recourse by the company to take back compensation paid over, say the previous 5 years, net of taxes paid. This recourse would be triggered based on the company's losses incurred in the current year.

We must stop CEOs from raping the company for their own compensation and then leaving the burnt out hulk behind, with shareholders and employees destroyed, while they sit back and enjoy the millions they took in the previous years.

Mr Kerry K. Killinger past CEO of WaMu would be a prime example.

"Flexible lending rules", LOL.



9/26/2008 post

12/24/2008

Merry Christmas

And it came to pass in those days, that there went out a decree from Caesar Augustus, that all the world should be taxed. (And this taxing was first made when Cyrenius was governor of Syria.) And all went to be taxed, every one into his own city.

And Joseph also went up from Galilee, out of the city of Nazareth, into Judaea, unto the city of David, which is called Bethlehem; (because he was of the house and lineage of David) To be taxed with Mary his espoused wife, being great with Child. And so it was, that, while they were there, the days were accomplished that she should be delivered.

And she brought forth her firstborn Son, and wrapped Him in swaddling clothes, and laid Him in a manger; because there was no room for them in the inn.

And there were in the same country shepherds abiding in the field, keeping watch over their flock by night. And, lo, the angel of the LORD came upon them, and the glory of the LORD shone round about them: and they were sore afraid. And the angel said unto them, Fear not: for, behold, I bring you good tidings of great joy, which shall be to all people. For unto you is born this day in the city of David a Saviour, which is Christ the LORD.

And this shall be a sign unto you; Ye shall find the Babe wrapped in swaddling clothes, lying in a manger.

And suddenly there was with the angel a multitude of the heavenly host praising God, and saying, Glory to God in the highest, and on earth peace, good will toward men.

12/23/2008

Daily DOW Futures

Hmmmm.
In the spirit of Christmas I feel I should have something positive to say, yes positive, hmmm, ah, er, it didn't break yesterday's low?

THAT'S IT!!

So I'm sure we're fine, no worries.

Didn't stare at charts all day, but when I did there were no signals and no trades. When I didn't there were no signals and no trades.

Something positive to say again..... twice in one post.... hmmmm, I earned IB interest?

THAT'S IT!!

12/22/2008

There has been a sighting

And there was much rejoicing.

A blue bar! A blue bar!

Actually 3 on the 5 minute chart, that last one is after 4:00 EST. The 2 short trend bars did not line up with anything on the renko or 1 minute chart. The big blue long 5 minute bar set up nicely with the renko and a new swing high.

So we have 390 minutes of trading to watch each day, we spent 386 minutes doing nothing, 1 minute of trading, and 3 minutes of joyous celebration.

Another exciting day in the life of a day trader.

5 Minute YM Chart

8 Tic Renko YM Chart

Voice of Reason

Saw this on Denarii trader, has Fred been reading my blog?

12/19/2008

Trading Boredom

You know the problem with these stupid blue bars is, THEY NEVER TURN BLUE. Ever since that stupid EIT (exceptional Irish trader) showed me how to program sierra my MUT (made up trade) trading has gone way down. Down all the way to zero actually.

Oh sure profit is up, but what am I to do all day. This was the best I could come up with.



Yes, those Brits are mean.

On another note the Hugo Chavez, I mean Danny Williams AbitibiBowater saga continues.

12/18/2008

Wonderful World

I saw this on Trader X's blog who saw it on Pradeep's blog. After watching it take a moment and think about how you just watched this.



I sit on my tush in Stubblejump Alberta trading DOW futures in Chicago, or crude oil futures in New York, chatting with traders from Ireland, America, Jordan, etc, while listening to blues radio UK. Think about all that is occurring at the speed of light to make that happen, and yes, I get mad if something doesn't quite work right for a few seconds. Actually I get mad if it even slows down for a while.

Amazing.

The first house I owned, me not my parents, had a party line for the telephone.

No, not a 1-800 party.

See how I saved you kiddies the trouble of googling that.

Google now there's another, ah never mind, you get the picture.

12/17/2008

Running Money

Being a day trader is an exciting job. You are plugged into the market, feeding off the ebb and flow of billions, no, trillions of dollars.

Right.

Or, you wake up at 6:30 MST time, scrape material from eyes that really shouldn't be coming out of human eyes, look outside to see a fresh blanket of snow, turn on outside lights as it's still pitch black out, go out and shovel driveway, come back in, blow nose, make coffee, wipe more stuff out of eyes, turn on charts, read news, log in to the EIT's chat room, annoy them with what you think are really witty comments, watch charts, watch charts, watch charts, watch charts, watch charts, read someone else made a profitable trade, wonder why I didn't, question wisdom of trading plan, watch charts, watch charts, watch charts, respond to man who loves rain questioning my lack of blue bars, watch charts, continue to banter in chat room, banter becomes increasingly bizarre cumulating in solfest asking the EIT to just shoot the market, shoot it dead, EIT responds with "bang" posting, man who loves rain leaves room in disgust, watch charts, watch charts, BLUE BARS on 5 minute chart, watch charts, watch charts, renko chart confirms short trend, blue bar on 1 minute chart, second bar fails, third bar fails, fourth bar turns down, turns blue, take it, full stop, market closes, read LT's rambling comment on last post, wonder if I'm up to the task of answering, whatever, still snowing, go shovel snow again.

One day my 10 year old son asked me what I was doing as he watched me stare at charts for a while.

"I get paid to wait" I responded cleverly.

"How much?" he asked.

Sigh.

12/16/2008

I Want to Move

Where do I go? Are there any capitalist countries left?

Save us John Galt.

ST. JOHN'S — — Newsprint giant AbitibiBowater Inc. [ABH-N] is warning of possible legal action against the Newfoundland and Labrador government after the province hastily passed legislation Tuesday to expropriate the company's hydroelectric assets, water and timber rights in Grand Falls-Windsor. Click on the read more icon for the full story.


read more | digg story

FED

The Fed made money free and the market went up.

Imagine that.

The now "magic" blue bars kept me flat until after the announcement, and then laid out 4 trades after the rate cut.

5 Minute YM Chart

1 Minute YM Charts

12/13/2008

If it seems to good to be true.......


I know a guy, he has never had a losing year, you should give him a call.

Ever had this conversation with someone? Remember this little story next time someone offers you a deal that is too good to be true.

Unfortunately this is just one more in a long list of scams.

12/12/2008

YM Trading

The DOW futures came back to life Friday after a slow week of trading. Today had some intra day range and was a nice trading market.

I was watching the 5 and 1 minute charts again and trading mainly off the 8 tic renko chart. This 5 minute chart shows a couple of the strong long moves we saw today.

With the blue in place on the 5 minute we looked for long entries on the renko chart.

12/10/2008

I Make Fire!

Ever see the Tom Hanks movie Castaway? Remember the scene, after days of trying, when he finally makes fire. He starts screaming and dancing around his fire.

Picture one Norwegian, Danish, Swedish, English Canadian dancing around his computer screaming I make bars change colour.

I am a programming master!

Maybe not.

Actually the exceptional Irish trader walked me through some basic programming in Sierra Charts. Sierra uses an XL spreadsheet to allow you to program some parameters of your plan.

The 5 and 1 minute price bars now turn colour when certain conditions are met. The spreadsheet is looking at the ATR, ADX, and CCI and turns the price bar blue for long and white for short. It's not a black box but does give me a visual of when I need to start paying attention.

I have not tried to program anything on the renko charts as they are all ready colour coded for direction, and I am looking at swing highs and lows on it. In other words I wouldn't have a clue on how to program that.

Today's trade action was horrible for me and evidenced by the severe lack of colour on my minute charts.

Here are a couple of 1 minute charts from yesterday and today.

12/08/2008

The Oil Kingdom

Interesting story from 60 Minutes on Saudi Arabia's oil business.

The energy industry is unsure of what Saudi Arabia's actual proven oil reserves are, as they produce millions of barrels a year and their stated proven reserves never go down.

Part 1

Watch CBS Videos Online
Part 2

Watch CBS Videos Online

12/06/2008

Business

In my former lifetime as a business banker I saw many businesses in different phases of their economic life. With that in mind two recent stories jumped out at me proving a theory my Father, a business reporter, told me many years ago.

The worst thing you can give a new business is money.

Huh?

Ok, here are the two stories, a former boxer and convicted felon starts his own machining company, and why can't Microsoft make money online.

In our first story we have a former homeless boy, turned boxer, turned felon, turned machinist, turned business owner with 53 employees and 6 million dollars in 2008 revenue.

Nice.

In our second story we have Microsoft with 2008 revenue of 60 billion dollars, net income of 18 billion dollars, cash on hand at 24 billion dollars, and they can't make money in their "new" online business.

According to the Fortune article Microsoft's online revenue grew to 770 million and they lost 480 million dollars.

What?

They spent 1.25 billion to make 770 million in revenue.

Why?

Because they can.

How did Microsoft start? A couple of college drops outs with little money and a big idea. How do most internet start ups happen? A couple of kids working out of their parents basement.

That is the key, you can't waste money if you don't have any. As a wise commodity trader :) once said "capital should always be treated as scarce, as scarcity requires choice". Capital is no longer scarce at Microsoft, so they no longer have to make hard choices when it comes to spending money.

If you have a hundred dollars to your name treating capital as scarce is easy, when you have 24 billion it becomes rather difficult.

At this stage in Microsoft's life it's doubtful they will ever be able to create something really special ever again. Too many vice presidents, meetings, bureaucracy, and yes, too much money.

I could fix Microsoft's online division rather quickly. I would fire all but 50 people or so and eliminate 865 million dollars in expenses. I would be willing to bet that those cuts, which would be considered insane by the micro executives, would not drop gross revenue by any significant amount.

At some point in most business's lifetime they require an injection of equity or debt to move to the next level, but that injection should never happen at the idea stage. With cash in hand our fearless entrepreneurs stop thinking about how to make money and start thinking about how to spend money.

That is where things go horribly wrong.

Oh yes, Bill or Steve, I am available to consult if you need me.

For a small fee of course.

12/04/2008

James Grant

Jim Grant of Grant's Interest Rate Observer is always a good interview. This one is over a month old, but still interesting. Also you got to love a guy that uses words like capricious and fallacious.



The book.

Mr. Market Miscalculates: The Bubble Years and Beyond

Triple Screen Trading

Here are the 3 main charts I watch during the day. I also keep the 15 minute around, but these are the 3 constant charts up during the day.

I have marked a trade I took and the bar it was taken on each chart. You could have entered on any the charts for this one and made money.

I wish they had all been like this today. They weren't, losing day today.

5 Minute DOW Futures Chart
8 Tic Renko DOW Futures Chart
1 Minute DOW Futures Chart

12/03/2008

Fine, Be That Way

I take it from the "enormous" interest in the blog these past couple of days my Canadian political ramblings are not that interesting to you.

Ok.

Trading, yes trading, that's why you're here. You may have noticed I haven't been posting trades, at least I hope you noticed. I was changing the charts over and over and it was bad for you to watch, and bad for me to trade. I seem to have settled down again.

My exceptional Irish trader friend was aghast to discover today that I am using the CCI again. And if you've ever seen an aghast Irishman, well, it's not a pretty sight. He wanted to see one of my ugly CCI charts, so here they are.

I'm not going to go into details of my trade execution but will provide the general framework.

I watch 3 charts, a five minute, 8 tic renko bar, and a 1 minute. I want to see trend on the 5 minute chart in place first, then I look for the same on the renko bar and 1 minute chart. I use the 1 minute to help find the entry but would still consider the 8 tic renko chart the main entry chart.

The rest of the details are best left unsaid, as I have said many times you can't trade someone else's plan. You can learn from others, at least I can, but you cannot trade it.

Here's a couple renko charts from today. They are winners, there were many losers, in fact more losers than winners today. The day was net positive due to the money management, which most of you know is really the only factor between wining and losing.

8 Tic DOW Renko Charts

12/01/2008

Every Trader Must Read

A fascinating article, why talent is overrated, from Fortune editor Geoff Colvin that adds to the nature vs. nurture trader debate.

The answer again is nurture.

The problem is, according to the research he quotes, it takes about 10 years to become an expert in your field. So the issue with trading is, most run out of money before they get there. The education is very, very expensive.

Here is the article, a radio interview with Geoff, and his book.
Talent Is Overrated: What Really Separates World-Class Performers from Everybody Else

On another note here's a couple of video gems from todays BNN's Squeezeplay.

That Little White Line

Remember those heady crude oil days. Ah the memories. Have a look at this old daily crude oil chart. See that little white line. See all the bounces off it on the way up.

Now look at this daily DOW chart. See that little white line. See the two bounces off it.

Apparently it works both ways.

Oh yes, the little white line, it's a 34 EMA.

Bring Home the Troops

The Canadian military is actively engaged in the war in Afghanistan. We may need their services here.

The Liberal Party of Canada once ran a campaign ad claiming if the Conservatives were ever elected there would be troops patrolling the streets.

Ok.

Let's do it.

Start with the opposition leader's official residence. If the opposition parties are not going to respect the will of the Canadian people then the government should take control of the country through whatever means necessary.

Pierre Trudeau enacted the War Measures Act once. Let's do it again.

I'm kidding.

I think.

I wonder what the penalty for treason is in Canada?

11/29/2008

Canadian Politics 101

The majority of this blog's readers are not from Canada, so for those of you who only think of Canada in terms of polar bears and hockey players this will all be news to you.

Those of us who live in Canada are apparently facing another federal election on the heels of the last one held October 14, 2008. Yes, less than 2 months ago.

We have a minority federal government in Canada, which means the ruling Conservative party needs the support of at least one of the opposition parties in order to pass anything in the House of Commons.

The Conservative party brought forth an economic update to the country in which they detailed some things they may do in an official budget. Things to stimulate the economy while trying to maintain our long history of fiscal surpluses. Yes, we have not run a deficit in many years.

One cost cutting measure was to eliminate a subsidy provided to all federal parties based on the number of votes that party received in the last election. Since the Conservatives received the most votes they would lose the most money.

However the Conservatives have the most money on hand from their very successful and very constant fund raising. The Conservatives can live without the subsidy; the other parties cannot in their current form.

So, the opposition parties are now in talks to form a coalition government. Meaning if they all vote together they have more seats in the House of Commons than the Conservatives.

This has never been done in Canadian Political history. We would then have a ruling government made up of Liberals (just as the name implies), New Democrats (socialists), and the Bloc Quebecois. The Bloc is a fascinating bit of Canadian politics, we actually have, and pay for, a "federal" party that only runs candidates in Quebec, and who's sole mandate is to separate Quebec from the rest of Canada.

That's right we pay for a party that wishes to destroy the country. We the Canadian tax payer pay the Bloc's members of parliament salaries, benefits, and pensions. The party is also subsidized by the Canadian tax payer like all the other parties.

So while the world is facing its greatest financial crisis since the great depression Canada would be run by three different political parties, liberals, socialists, and separatists.

The best part is the whole idea was not conceived by the current opposition party leadership, but by their leaders of the past who are no longer members of the House of Commons. Former liberal Prime Minister Jean Chretien and former NDP leader Ed Broadbent have been reported as the masters of this idea.

The other political alternatives are, we have another federal election, or the opposition parties vote with the Conservatives and let them rule as we the people elected them to do 6 weeks ago.

So if you were, or are, a Canadian citizen which alternative would you prefer.

Imagine the carnage of a coalition government of liberals, socialists, and separatists running this country.

Imagine you were a Liberal or New Democrat politician and 6 weeks after the last election you showed up on my doorstep asking for my vote again. Asking because the Conservatives took away your tax payer subsidy. Asking, because of the tax payer’s subsidy, you had not bothered to do any proper fund raising. Asking because even if you did try fund raising no one would give you any money.

If I were our Prime Minister I would draw the line in the sand and dare the opposition to try any of the alternatives other than voting with the government to pass whatever budget they ultimately do bring to the House of Commons.

Some would say he already has.

Now we wait to see if anyone blinks.

11/28/2008

Oh My

Tears streaming down my face rolling on the floor laughing gasping for air.

Someone Made Money

Great story from the Globe and Mail on Fairfax Financial.

"Only a handful of financial companies worldwide are in better shape now than before this crisis started. Fairfax Financial is one of them. CEO Prem Watsa managed to make $2 billion and thumb his nose at his opponents at the same time." Derek DeCloet, Globe and Mail.

11/27/2008

Dragons Den

I love this show. Budding entrepreneurs pitch their products to a group of investors. As a former business banker it reminds me of the many pitches I heard. I wish I could have been as honest as the "dragons".

The show started on the BBC and the Canadian version has been running for 3 years now. All of the episodes are available online at CBC Dragons Den.

Here's a sample.

11/26/2008

Is There Hope?


No, there isn't.
Happy Thanksgiving.
Ok maybe, but not just yet.

We have so far to go before there is hope it's hard to even see it. I know we have Barack Obama's, yes we can, working for us. But, 21 days ago the DOW futures were over 9600. We haven't even got back to there yet.

We have a long way to go and I want to get there as fast as anyone, I'm 100% invested, and it's all long equities.

We have had a little 4 day rally, it's meaningless.

Sorry.

I hope, there's that word, that we have seen the bottom, I hope my negative post today looks foolish in the future, I hope Barack Obama and his team turn it all around.

I hope.

But I don't believe.

This house of cards cannot be rebuilt with debt. The house needs to crumble, and those who survive have to build a new one. With all governments adding more cards to the current house it only postpones the inevitable.

The house is going to fall down.

So why do I stay long in equities?

I think mine are survivors, they are paying me handsomely while I wait, and I can't miss any of the up move if there ever is one.

Besides that if you don't have hope, what do you have?

Cash. LOL

11/25/2008

I Want Nuclear!

Jack Dee Live at the Apollo: Cold Calling


Oh, and the markets?

Who cares.

They went up, down, and sideways.

Just keep President Elect Obama at the microphone, Ben Bernanke at the printing press, and Hank Paulson handing out the dough and we'll all be ok.

Yes I'm in a bad mood, I've got a "man cold".



One more thing, make sure you watch this "ugly" post.

11/21/2008

It Was Close

Daily DOW Futures
Yesterday we entered the land of no return.

Today I jumped, but at the last second turned and grabbed the window sill around 1:00PM MST. I hung there by my finger tips and only with my super manly brute strength was I able to pull my self back in.

We closed back in the land of milk and honey. Well, maybe the land of watered down soup and crackers. Apparently we were saved by (other than my super manly brute strength) Barack Obama's cabinet selections. Good on ya man, come back and save us some more on Monday.

If you trade take a look at the last hour of these 15 minute charts, that is the only time you need to trade.

15 Minute DOW Futures

11/20/2008

We all need a good laugh

Your stocks portfolio has been decimated, you're up to your eyeballs in debt, and you've just been laid off.

You need a good laugh, and a good look at 600 million dollars in gold.

Try some Canadian humour.

I can't believe they let him in there.

Good Bye Cruel World

The sky is falling.
The end is near.
Ma, git the youngins, beef jerky, guns, and head for the bomb shelter.

YM Daily Chart

15 Minute YM Chart
Where do we go from here? The charts say down. How far?

I have no idea.

I'm glad I can trade this to the downside, although I should have hedged the retirement accounts. I sat here and watched and did not do anything to protect the long positions. I would not have sold, but could have used options or a bear ETF to hedge.

Not smart.

Is it too late to hedge now?

11/19/2008

All The Good News

Not Looking Good

Daily Mini DOW Futures Chart
A quadruple bottom perhaps? Let's hope so as the alternative is not that appealing.

Tomorrow will be interesting.

11/18/2008

Living the Dream

Just one more consolidation loan and we will all be ok. Or if you own a company make sure it is "too big to fail" and the government will lend you money forever. Of course the government doesn't actually have the money to lend you, they have to borrow it first.

Right.

Up, Down, Up

Mini DOW 15 Minute Chart
A nice trading day today and I did a much better job of picking the trends to trade. It looked like we were going to go down and test 8000 on the dow futures but a late day rally turned it into a new intra day high.

You could make a nice living trading only the last hour of the day.

Mini DOW Renko Charts

11/17/2008

Hindsight

The 15 minute chart look at the day shows two nice trends divided by a whole lot of congestion on the EMAs. The moves today were difficult for me to determine which were real and which were not.

I can see it now.

11/16/2008

Winter is Coming


I was perusing my photos on flickr and realizing how beautiful this country is. We have yet to see our first real snow this year and I am already looking forward to spring. Actually I could pass on spring and go right to summer.

Maybe this winter I need to take some pictures and appreciate the beauty of winter.

11/15/2008

Iceland - A Land Without Money

Hallgrímskirkja cathedral looms up out of the mists and gloom of downtown Reykjavík

"Think of Ireland. Rotate it 90 degrees clockwise, make it a third bigger and hang it like a pendant from the Arctic Circle. Crack open the earth’s crust below to release limitless supplies of geothermal steam, then fill its territorial waters, all 200 miles of them, with an abundance of cod." Robert Jackson, Financial Times, Photographs by Bjarki Reyr

I grew up in a Canadian community populated by Icelandic settlers so this story caught my eye. An amazing and sad tale.

Click on the read more icon for the full Financial Times story.

read more | digg story

Crude oil prices: Love or beggar thy neighbor?

A drilling rig in the Gulf of Mexico - AFP/Getty Images

"So, crude oil prices are unlikely to hit $200 per barrel any time soon. But what will oil prices be over the next several years? From my perspective, prices will likely average around US$40 or around US$80 per barrel, depending upon the political and economic fall out from the global financial crisis." Vincent Lauerman, Financial Post

Click on the read more icon for the full Financial Post story.

read more | digg story

11/14/2008

A Tale of Two Trends

A wise old trader tells all who will listen the key to success in trading is knowing when not to trade. That would suggest another key is knowing when to trade. For me when to trade is when there is a trend with some range. All other time in the market should have you flat.

Today there was not alot of time where you needed to be flat. The day only got better as it went along with 2 huge moves in the afternoon session. The down move was faster than the up move. You can see them nicely on the three minute chart.

How you get in and out of these trends really doesn't matter, the key is to identify when a trend is in place and trade it. Just as the key is to identify when there is no trend in place and stay flat.

Identifying trend is easier said than done as many moves start out looking good only to reverse quickly. I have not mastered this yet but do find multiple time frames and the average true range a good way to identify a trend to trade.

11/13/2008

DOW Uncrushed

LOL

Yesterday I basically called the end of the world as we know it, and today; a reprieve, a reprieve!

It certainly was a great day for trading.

The daily chart has an interesting pattern on it now, a triple bottom perhaps? The second and third legs don't quite touch the first one, but hey the DOW went up so let's think positive.

Could we have seen the bottom?

Naw.

11/12/2008

DOW Crushed Again


The daily DOW is running hard for the October 10th low, and if we breach that, well let's just say it won't be good.

Watching Secretary Paulson and all the central bankers of the world pulling levers like mad men is at best humorous, and at worst pathetic.

The market is going down.

Trying to bureaucratise the market to save humanity does not seem to be working. The parallels to this activity and Atlas Shrugged are amazing. Read the book.

The governments all claim this activity is required to save us from a depression. What if a depression would be a good thing compared to what may happen as a result of this government intervention?

The so called capitalists are not acting any better than the government, as I don't hear too many telling government to get out of the market. Markets work if left to work. That doesn't mean they can't go down and it doesn't mean companies won't go bankrupt.

The strong are supposed to eat the weak.

If we don't cull the bottom end of industry it weakens the entire system as the the strong now have to compete with the government subsidized weaklings. With governments deciding who survives, instead of the market, it puts the whole economic system on a very dangerous path.

A path leading to a place that could make a depression look rosy.

11/08/2008

Perspective

Here is a 3 page market commentary from Jim O'Shaughnessy for your perusal. Click on the post title for the link.

In another lifetime a bank I worked for brought Mr O'Shaughnessy's value and growth investment styles to the Canadian market place in the form of mutual funds. Being an eager young banker I read Mr. O'Shaughnessy's first book, What Works on Wall Street, and was impressed enough to place some money in his funds. That was back in 1997, and the fund has outperformed the TSX composite index nicely.


O'Shaughnessy's approach removes human emotion from the investment process, and we as traders know that is the key to success.

11/07/2008

Oil sands players to lobby Obama

Jim Bourg/Reuters

President-elect Barack Obama's energy program is expected to focus on renewable energy, transitioning away from fossil fuels.

CALGARY - "Canada's oil sands community is gearing up for a big push in Washington to influence U. S. president-elect Barack Obama's energy agenda." Claudia Cattaneo, Financial Post (click on the read more icon for the full Financial Post story)

I know why I am not a politician or a diplomat as my reaction to this issue is take it or leave it. Here is our "friendly" oil, you my American "friends" can buy all you want. Or if our oil is too "dirty" for you go back to the Middle East and buy their "clean" oil.

The Chinese only see oil. No dirty, friendly, or non friendly oil.

Just oil.

Total American Imports of Petroleum (Top 15 Countries) Source USA Govt Dept of Energy
(Thousand Barrels per Day) YTD 2008

CANADA 2,427
SAUDI ARABIA 1,560
MEXICO 1,31
VENEZUELA 1,210
NIGERIA 1,067
IRAQ 675
ALGERIA 525
ANGOLA 523
RUSSIA 487
VIRGIN ISLANDS 326
ECUADOR 216
COLOMBIA 210
UNITED KINGDOM 218
BRAZIL 244
KUWAIT 207

As I said take it, or leave it.

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11/06/2008

More From John Galt

I mean Tom Barrack, CEO of Colony Capital.

Click on the post title for the video link.

This is the first Tom Barrack interview.

http://tradingcrude.blogspot.com/2008/10/i-found-john-galt.html

DOW Rolls Over

We have taken a hard turn off the 34 EMA on the daily chart. Now do we retest the lows?

Daily DOW Futures Chart

Market ground down all day, it was a hard day to trade as the entries seemed to always be pushing through new daily lows. These tend to retrace just enough to hit stops and break evens. 62 winning tics / 58 losing tics today.

15 Minute YM Chart

11/05/2008

The People Have Spoken

I am happy for my American neighbors and their new President elect. It was nice to see the excitement that Obama has brought to the American people. The voter turnout sounds like it was huge, and that is a wonderful thing for a democracy. The fact that a racial barrier was absolutely destroyed is also a wonderful thing.

I asked myself who I would have voted for, my Canadian political bent is conservative, but after the last 8 years of Republican rule in the U.S. you feel as though someone needs to take a bullet for where America currently is.

Unfortunately John McCain gets that bullet.

I admire McCain for his candor and sense of right and wrong. When the crazy haired lady made some ridiculous statements about Obama in a town hall meeting McCain could have just let it pass and move on, neither condemning or condoning the statement. That may have been the right move politically, but McCain could not do that. He shut her down and complimented his rival, Mr. Obama, on what a great family man he is.

That is John McCain.

My only concern with Obama are his views on business. He seems to view business as the enemy. I assume this is only political rhetoric to get elected, but those are his words.

That leads me to question does he truly understand how an economy works, does he think that governments create wealth?

Only businesses create wealth, only businesses create jobs, and only businesses generate tax revenue.

All government attempts at creating jobs are simply a redistribution of money that the private sector has all ready created. Without the engine of private commerce there is no government as there is no money for government.

Now Mr. Obama was given the perfect storm in which to bash "big" business, a bunch of idiot investment bankers bankrupt their company's. Then the Republican government decided they were too big to fail. If that's the case then they shouldn't be allowed to exist in their current form. If they are too big to fail then they should be nationalized.

As others have stated you cannot have privatized profits and socialized losses.

As I have stated they should have gone under. Period.

You will notice that since the government started pumping in billions and taking ownership stakes in the banks the consolidation of banks has stopped. The strong are no longer eating the weak as the government has decided that all the banks, both stupid and smart, should continue to exist.

That is a mistake.

I digress.

Who would I have voted for?

Mr. Obama.

The Republicans were on guard during this mess and have to pay for it, and pay they did with the presidency, senate, and congress. So my American friends you will have Democrats running your country.

I wish them and you, all the best.

P.S.

Someone please send Mr. Obama a copy of Atlas Shrugged.

11/04/2008

What to Trade, What to Trade

I love crude oil, flowing, trending, crude oil, mmmm, crude oil.

Wake up!!

Sorry.


The YM wasn't too bad today either. We will look again at the end of the week and decide what to trade. The best plan may be to trade crude oil until the pit session closes and then trade the last hour and a half of the DOW session.

11/03/2008

Thank You Ugly

In case you didn't see this on my new favourite blog, http://www.uglychart.com/

See more funny videos at Funny or Die

Speaking of ugly, took 2 break evens, 2 fulls stops and quit. Market was flat and only idiots trade flat markets.

That would be me.

It's only one day, and the DOW has been a great trading vehicle, but if this market stays like this for the week I will be moving back over to the crude oil pit.

Might just be a lull before the U.S. election.

11/01/2008

Where oil and water mix

Photo by Dave Einsel for National Post

Port Arthur Economic Development Corporation CEO Floyd Batiste doesn't see any problem with Alberta oil. In fact, he thinks it would mean more jobs and prosperity for his town.

PORT ARTHUR, Tex. "By the middle of the next decade, this weathered city in America's deep south abutting the Gulf of Mexico, will receive a flood of oil from Fort McMurray's oil sands plants. About one million barrels a day of Alberta oil will flow into the world's biggest refining market." Claudia Cattaneo, Financial Post

Click on the read more icon for the full Financial Post story.


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Capital Was Abundant



David M. Walker is CEO of the Peter G. Peterson Foundation and served ten years as Comptroller General of the U.S., heading the Government Accountability Office.

Click on the post title for David Walker's Fortune article.

10/31/2008

The Week That Went Up

My DOW futures chart shows the low on Monday at 7949 and the high on Friday at 9428. It will be interesting to see what happens at the 34 EMA, around the 9600 level. Of course 10000 will be the real test.

Daily Mini DOW Futures Chart
Today's trades, 6 winners, 3 losers, and 4 break evens, for 157 winning tics / 29 losing tics = RR 5.41

Weekly totals
Total Trades 42
Win 40%
Lose 31%
BE 29%
Gross RR 3.16

The key was stopping yesterday after I hit my daily stop. Kept the lid on a bad day and allowed the week to work out fine.