I am flying to Singapore today so I am posting Thursday’s blog early morning Hong Kong time.
Yesterday I received two e-mails asking: “since you believe that Crude Oil is going to go down, won’t this mean the S&P will go up?”
The questions imply that there is a negative correlation between Crude and the US Stock […]

continue reading.....

Before I get into today’s blog, a short detour to comment on Ana’s contribution:
The SEC has passed an emergency rule to limit short selling in certain types of institutions. Hmm, the thin edge of the wedge? Steve Briese recently placed a warning on his site that I posted on “S&P 06-30-2008“. Speculators are being blamed […]

continue reading.....

I wanted to review Crude Oil (this blog) and Soybeans (next one), the two hot commodities.
In the case of Crude Oil, let me say I am indebted to Gann Global (http://www.gannglobal.com/gateway.php) . I have a reasonable data base but it is nothing compared to Gann Global’s. I subscribe to their services because of the […]

continue reading.....

I was going to write on the bull markets of Crude Oil, Soybeans and Gold today; but I have decided to follow-up on the IndyMac failure and use it as an example in scenario creation. The link below leads to the video with the example. Below that are a number of observations on the IndyMac […]

continue reading.....

I don’t normally post on weekends. But in this case the news warrants it.
At 6:00 PM Friday, the FDIC announced the closing of the US major bank, IndyMac and the transfer of its assets to a new bank. No one will lose money but the closure may affect two other lending institutions in Atlanta.
The news […]

continue reading.....

In yesterday’s blog on the S&P, I set out my conclusions but not my thought processes. In coming to the conclusions, I used a process involving:

Scenario Creation
Decision Tree Analysis and
Visualization.

The essential elements of Scenario Creation are similar to the processes used in Scenario Planning. (See http://en.wikipedia.org/wiki/Scenario_planning, item 6 ‘Scenario Planning). Once I have identified the […]

continue reading.....

Yesterday I said that Tuesday, July 8, had generated a buy signal. Let’s take a look at that analysis.
Figure 1 is the 12-period swing on a monthly chart (yearly trend).

FIGURE 1 12-M S&P (CASH)
We see an Upthrust Change in Trend from up to down. The sell signal triggered in June when we saw a directional […]

continue reading.....

At the end of the day our success as traders is based on the equation below returning greater than 1:
(Average $ Win x Win Rate) - (Average $ Loss x Loss Rate) = >0.
To produce the desired result we need to consider three factors:

The Win/Loss Rate. Elsewhere I have postulated why the Win or Loss […]

continue reading.....

In 1966, Robert Mouton and Jane Blake wrote ‘The Managerial Grid: Leadership Styles for Achieving Production Through People’. In this blog I have adapted their grid to trading styles with a view to examining its application to trading.
Figure 1 shows the adapted grid.

Figure 1 Adapted Mouton-Blake Grid
The grid has four corners; starting from the bottom […]

continue reading.....

Before I get into today’s blog, let me say how great it feels to connect with you all again. I am still restricted to limited periods in front of the computer. But, at least, I’ll be able to start writing and trading.
So, to my USA readers, I hope you all had a great July 4 […]

continue reading.....