Wednesday, October 29, 2008

Have Investors Panicked and Capitulated?

After watching Bob Precter yesterday evening on Bloomberg is why I'm posting this article today.

Robert Precter correctly forecasted the 1987 stock market crash.

Robert Prechter examines historical stock activity to identify how and when fear and panic is recorded in stock market price. He even provides unique insight for whom you should vote in November.

Ever since mid-September, we have read that the bottom is in because investors have ‘panicked’ and ‘capitulated.’"

So writes EWI's Founder Robert Prechter in his just-published Elliott Wave Theorist, which dives into stock market history (recent and past) to determine whether capitulation has occurred.

The tragedy of history is that societies learn so little from it, despite its being a profoundly accurate indicator for the future. The one exception is technical analysis, which is actually based on this very premise.

No living person is more well-versed in stock market history than Bob Prechter. Consider his impossible-to-ignore case for deflation. Nobody else we know of said stocks will decline along with commodities while the dollar rallied. Yet, here we stand.

You see pictures of U.S. stocks every day; now take a look at how other global stocks and commodities have declined in tandem – just as anticipated by Bob’s “All the Same Market” thesis.

The Russian and Chinese stock markets are now down more than 70 percent. Commodities, most of which made all-time highs this year, have plummeted in unison like never before: platinum is down 63%, copper 52%, oil 53%, silver 56%, wheat 57%, corn 54%, soybeans 49%, cotton 54% and the CRB index of commodities a whopping 42% in three months, after peaking in July. We warned that the government’s ethanol program would be another fiasco, and corn investors are learning that lesson. Even gold, which is real money, is down 28%. Everyone wants cash, and they are selling everything to get it.” ~ Robert Prechter, October 2008 Elliott Wave Theorist.

Click here for your Free Credit Crisis Survival Kit and review more of Robert Precter's financial markets forecasts.

Have Investors Panicked and Capitulated?

Click the DJIA Chart for a larger view.

Chart DJIA

Excerpted from pages 1-4 of Bob Prechter's Oct. 21, 2008 Elliott Wave Theorist.

Ever since mid-September, we have read that the bottom is in because investors have “panicked” and “capitulated.” But market history does not support this widespread view.

A perusal of volume (see Figure 1) shows that investors have not panicked. In a market panic, the number of shares traded increases substantially on down days and bottom days. In October 1929 and in October 1987, daily volume surged to between triple and quadruple the preceding summer’s average as prices plummeted.

Volume recently has been quite steady, aside from two spikes. But it is important to get out the microscope and see on which days they occurred. September 19 sported all-time record volume as the market surged upward. September 18 had the fourth-highest volume of the summer, and September 16 had the fifth-highest, and both were up days in the market. Even though September 17 had high volume on a down day, it was a contraction in volume relative to that on the adjacent up days. October 10, which is so far the low day for prices, saw the second-highest volume ever, and in some contexts would indicate an important reversal. But it happened amid hints that the G7 would meet and propose a global bank bailout, and some averages, such as the NASDAQ Composite and the two Value Line measures, closed up that day. Even the record and near-record volume surges of January 23 and March 20 occurred on huge up days, not down days. So most of the biggest volume days this year have been those that attracted mostly buyers, not sellers. This is not how volume has behaved in past panics. It is more like the way it behaves in the early stages of a bear market, when hope still reigns.

Click the S&P500 Emini Chart for a larger view.

The dominance of hope over fear indicates that investors have not capitulated, either. Capitulation is in evidence when investors finally abandon their hopes based on presumably bullish external factors. During September and October to date, investors have expressed immense faith in purportedly bullish news events. Figure 2 displays market actions to confirm this point. From September 1 through today, no fewer than half of the trading days found investors so excited about buying stocks that they drove closing or overnight futures premiums to record or near-record levels and/or concentrated their buying so intensely as to create large opening upside gaps in the futures market. You need not take my word regarding investors’ temporarily euphoric reaction to each news event; just flip through the news reports. This morning AP reports, “Wall Street surged on a burst of optimism Monday, [on] comments from Federal Reserve Chairman Ben Bernanke.” The Washington Post agrees: “The stock market soared in response to Bernanke’s remarks….” Socionomic theory accommodates brief market reactions to emotional stimuli, but we also know that otherwise the market’s trends are entirely in the grip of social mood, which cares naught for news. That is why we analyze waves of social mood, not news, except as it gives us hints about market psychology. Since every one of these days of excited rally had an excuse for buying based on news, it is clear that investors have yet to abandon their bullish bias or to give up hope that external factors will revive the bull market.

The main reasons that market observers are giving to support the case for a bottom are that momentum indicators are oversold and short term sentiment measures show that most traders are bearish. We know about these readings and show them on the Short Term Update. These indicators are tried and true, to be sure, but one must interpret them in context. Recall how often these same indicators registered an overbought condition or traders’ optimism from 1995 to 2007. If we are correct that Elliott waves identify that period as end of the largest-degree advance in nearly 300 years, setting up the largest-degree bear market since the 1700s, then current short term sentiment and momentum readings do not count for much. While they could support more near term rally, the bear market is likely to bulldoze right over them eventually.

Click here for your Free Credit Crisis Survival Kit and review more of Robert Precter's financial markets forecasts.

Tuesday, October 28, 2008

Van Tharp Trading Workshop Nov 1 - 3

Dr. Van Tharp Professional Day Trading Strategies / Nov 1 - 3 Cary North Carolina

Professional Day Trading Strategies Workshop. Discover How to Make Huge Profits Even in Today’s Tough Markets.

Day trading has one huge and undeniable advantage over every other trading time frame — Reduced Risk

The bottom line is this; position traders and even swing traders must deal with overnight risk. This shows up in those unavoidable gaps that happen between the closing price and opening price every day. Usually these gaps are small; but sometimes these gaps are very big, thanks to news or market moves, etc. And there’s very little protection against such gaps. Traders and investors just have to make sure that stops are wide enough to stay outside of the “market noise” and reduce their position size accordingly.

Intraday traders don’t have to deal with this overnight risk. This allows them to use tighter stops and therefore larger position size. We’ve all heard stories of people blowing out their accounts while intraday trading. This comes from abusing larger position sizes and a combination of poor trading strategies and bad discipline.

Successful day traders capture the advantages of increased position sizes by using strategies with positive expectancies and applying good discipline to higher frequency trades.

There are many elements that are required to day trade well: good trading psychology, execution skills, a decisive nature.

The eulogy for day trading has been written many times in the past several years. Feeling the heat from the Wall Street vanguard (who were having their profits margins cut by hoards of stay-at-home traders), regulators made it tougher for the "small player" to qualify. Day traders have been belittled in the press as gunslingers. And the list goes on…

So why does day trading continue to thrive? Statistics show that a smaller cadre of day traders are now trading more share volume in absolute numbers than the vast hoards who had taken to computer screens. Day trading has some inherent advantages that suit the temperament of a large number of traders. Let’s take a look at these advantages and see if this style of trading may have a place in your trading plan.

Advantage #1: No overnight risk. For a trader who is trying to stay in the game for the long haul, this is one of the biggest natural advantages in the trading world. While we can understand this advantage intuitively (sleep better at night, etc.), let’s see if the concept bears any fruit quantitatively.

Here’s the methodology: Test two similar hypothetical trade distributions. Each distribution has the same expectancy and is tested across the same number of trades. The only difference is that the first distribution simulates intra-day trading and has its biggest loss as –1.5R, while the second distribution used represents the effect of taking on overnight risk by including a –5.0R loss in the distribution. This simulates having a one-dollar stop and when a company pre-announces reduced earnings and opens down five dollars. Here is our starting data:

Percent wins: 55% for both systems

Expectancy: 0.12 for both systems

No. of trades: 500 per year for both systems

Biggest loss: -1.5R for day trading system, -5.0R for overnight risk system

What were our results? As you can imagine, the volatility of our equity curve increased greatly when we added the possibility of a big loss. Our average drawdown doubled, while our average gain stayed the same. This alone is significant. But the increased volatility had a much more telling effect; the optimum risk size (defined as the amount of equity that we could risk per trade to achieve the best reward-to-risk ratio) was 2.5 times smaller for the distribution that included overnight risk.

Advantage #2: Frequency of trade. We can make a good comparison of any numbers of systems if we know the expectancy and the frequency of trade of the each system. For those of you not familiar with expectancy, it is a measure of how much a system makes per dollar risked. In the example above, you make 0.12 dollars, on average, for every dollar risked. (For more information on expectancy and frequency of trade please refer to Chapter 13 in "Safe Strategies for Financial Freedom".)

Those of you who are familiar with expectancy calculations may have looked at the numbers in the previous section and thought, "an expectancy of 0.12 is very low." But remember that expectancy must be coupled with frequency in order to provide a meaningful comparison. Recall that we assumed 500 trades per year using this system. At that frequency this could be very profitable system, returning 60 percent per year if one risked one percent per trade.

Remember that high trade frequency is a double-edged sword. It makes systems with even small expectancies very profitable. But it also turns systems with negative expectancies into money pits. Having systems that work is important in any style of trading, but in day trading, using a strategy that doesn’t work can cause rapid disaster.

Advantage #3: Immediate feedback. This advantage tends to separate the day traders from the swing and position traders. For many folks, immediate feedback is a very reassuring characteristic. Lessons are learned more quickly. Positive actions are re-enforced more quickly. For action-oriented personalities, day trading is a perfect fit.

Day trading is not a style that suits everyone. But for those that thrive on immediate feedback and can make quick decisions, the benefits are many.

Click here to review and register for the Traders Coach Dr Van Tharp Workshop

Monday, October 27, 2008

Weekly Stock Pick

Another bloody week in the markets last week. This is a pure panic. Stocks are going down on fear, not fundamentals right now. I see a big rebound coming into the markets anytime. I do see a rebound as a counter uptrend in a primary down trend bear market. I think the bear market will end, when the USA takes care of the real estate mortgage credit crisis problem that caused this whole financial mess to begin with and which exposed the over-leveraged finance environment of the Fed and the banks have been in for decades.

With real estate being an inherent longer term investment, most likely it will take a longer time than we think to eliminate all the bad mortgages and foreclosures. During this time with stock prices very low, long term investments should be considered and acted upon, as well as short to intermediate term trades on selective companies with healthy balance sheets, global operations and revenues, and with PE ratios below the PE ratio of the respective index and industry they are in.

As I scan the charts this week, I’ve zeroed in on one of the biggest agriculture companies in the world. The agriculture stocks had been on a big long uptrend for many years now up until about June of this year until they started correcting to the downside with the rest of the market. The demand for food worldwide is outstripping the supply, and this demand looks to be intact for the next five years at least. I see agri stocks heading backup to their up-trends once this selling panic is over.

Buy Long Monsanto. Ticker MON

Buy Entry: 68.08 to 70.13

Stop-Loss: 66.80

Note: If the price breaks below 66.80, 51 to 52 could be the next downside target and next major support

Take Profit Areas:

Short-Term: 83.44

Intermediate Term: 96.00

Long Term: 105.00

Monsanto Company Profile from Google Finance

Monsanto Company (Monsanto), along with its subsidiaries, is a global provider of agricultural products for farmers. The Company’s seeds, biotechnology trait products, and herbicides provide farmers with solutions that improve productivity, reduce the costs of farming, and produce foods for consumers and feed for animals. It has two segments: Seeds and Genomics, which produces seed brands, including DEKALB, Asgrow, D&PL, Deltapine and Seminis, and it develops biotechnology traits that assist farmers in controlling insects and weeds, and Agricultural Productivity, which manufactures Roundup brand herbicides and other herbicides and provides lawn-and-garden herbicide products for the residential market and animal agricultural products focused on improving dairy cow productivity. In October 2008, Monsanto announced that it completed the sale of its POSILAC bovine somatotropin brand and related business to Eli Lilly and Company.

Click here to review and Trial the Trading Software I used in determining my buy long position on MON. Email us at to receive the 5% discount code.

Click the Monsanto Stock Chart below for a larger view.

Monsanto Stock Chart

Wednesday, October 22, 2008

Rich Dads "How To Predict The Future" Seminar

Rich Dad's Business School "How To Predict The Future" 3-Day Seminar Landing

Date: October 24 - 25: 8am - 10pm; October 26: 8am - 5pm

Location: The Scottsdale Plaza Resort, Scottsdale, Arizona

How To Predict The Future Seminar Focus

1. How To Predict The Future

By studying Dr. R. Buckminster Fuller’s work on prognostication, you will learn how the future is not traveling in a straight line. You will learn how to change your life by changing your future.

2. How To Create Your Future

Robert and Rich Dad’s Advisor Blair Singer will teach PERT (Planning Evaluation Review Technique). Through this you will gain the ability to go into the future and create backwards. PERT was the planning technique used to put the first humans on the moon.

3. How To Print Your Own Money and Change Your Financial Future.

One of the most powerful books Robert has read is Dr. Fuller’s Grunch of Giants, GRUNCH stands for Gross Universal Cash Heist. The book is about how the rich print their own money and why they’re rich. You will learn to do the same. More importantly, you will learn how to prosper from the future of money…not be a victim of it.

Followed by a cocktail party hosted by Robert & Kim.

Special discounts also available for early registrations: Click here for details

Robert Kiyosaki & Dr Fuller

"In September of 1981 I met Dr. Fuller. In 1981, my life changed. My life changed because my future changed. My future changed when I found the answer to my question:
"What can a little person like me do to make a difference in the world?"

In 1981, I was a manufacturer with factories in Korea, Taiwan and Hawaii. In September of that year, my career as a manufacturer ended and my career as an educator began.

I could foresee the economic turmoil the world is in today." — Robert Kiyosaki

Robert on “Who is Bucky Fuller?”

Harvard University claims Dr. R. Buckminster Fuller as one of their noted graduates...although he never graduated from Harvard.

The AIA, The American Institute of Architects, hails Dr. Fuller or “Bucky” as one of America’s greatest architects. He was not an architect.

The Dymaxion

My friend John Denver called Dr. Fuller, “Grandfather of the Future.”

Dr. Fuller was known as a “Futurist.” He was also known as “The Planet’s Friendly Genius” because he dedicated his life to a world that worked for all things and all people. Bucky was an environmentalist of the universe before the world knew what an environmentalist was, much less the universe. In other words, he was a very big thinker.

I had the honor of studying with Dr. Fuller three times in my life, and each time my life changed dramatically. Each time, I could see the planet’s new future, and my new future, more clearly.

Much of his work was over my head. I could not understand most of his books. Yet, there were two books I did understand. One was Critical Path, which is about the critical evolutionary path we as humans are on. The second is Grunch of Giants. “Grunch” stands for Gross, Universal Cash Heist. Grunch is about how the richest people in the world steal through our governments, politicians, and banks, from the rest of us. The sub-prime mess, inflation, decline in savings, and the growing gap between the rich and everyone else, is the work of Grunch.

Dr. Fuller’s Geodesic Dome, the focal point of Expo ‘67 in Montreal, Canada.

In 1967 I hitch-hiked from New York City to Montreal in order to see this great man’s work (pictured below). Little did I know that in 1981 I would meet and spend five days with him in Kirkwood, California. Could it be that this was predestined? Who knows? If not for Dr. Fuller, I would not be an educator, there would be no Rich Dad Company, and I would not be printing my own money. I am a much richer person today because of him.

"Dr. Fuller answered my life’s question, “What can a little person like me make a difference in the world?” If you are seeking your answer to the same question...join us in October." — Robert Kiyosaki

Click Here To Reserve Your Seat Today!

Tuesday, October 21, 2008

Free Option Trading Webinar Oct 22 9PM EST

Learn What To Do After the Position is 'On' and Things Start to Move!

'Trade the Position' Free Webinar October 22 9PM Eastern Standard Time

When to Get 'In'. When to Get 'Out'. When to 'Morph' and 'Roll'

We'll show you in this live 'in class' free with Ron Ianieri!

Join us this Wednesday for a free trading webinar.

Who: Ron Ianieri, Chief Options Strategist, Options University

What: Trading The Position - What To Do After The Position Is "On" And Things Start To Move!

When: Wednesday, October 22, 2008 at 9:00 PM EST

Where: Online - Register by clicking here:

It's the most requested "Live Class" topic we've had so far. This information is fairly advanced but... well worth learning and once mastered... will help take the 'fear' out of your trading.

Because you'll know how and when to get into your trades, how and when to 'get out' but more importantly... When and how to 'Morph' your option positions in your favor.

Here's your chance to 'look over Ron's shoulder' as he does this LIVE in his new Trade the Position classes, starting soon.

If you've taken the Live Mastery Classes or been through the Strategy Spotlight series, you're perfectly prepared for this new information! But everybody can benefit from these little known strategies.

After you master the 'basics', and are knowledgeable about how to trade options 'in general'... to the point of making your first, quick, easy morph of your position.

You Now Need To Proceed To The 'Next Step'!

And the sad fact is, most options trading education companies stop right there.


Most of them don't have a clue about what we're going to show you next, what I'm talking about now is called.

Managing Your Position

This is where we leave 'theory' behind, and get into reality. And it's the most requested information we've received so far. Managing your position involves two major concepts.

Morphing and Rolling

And these are the concepts not taught by any other options education company that we know of.

So now you need to know how to Manage Your Positions, and to continuously Morph and Roll your positions into profit after profit, especially in the markets these days, and maybe even turning Losing Positions into Big Gainers!

This little-known knowledge of the professional floor traders explains how they manage to stay in business, day after day, week after week, while Reducing Risk and Locking In Big Gains!

And we've had numerous requests (and demands!) for this specific information. So if you're comfortable with options trading 'theory' and its practical application... and you're ready to take your options trading to a "New Level", then you'll not want to miss this special webinar we're holding this Wednesday evening.

The topic of this webinar is "Trading The Position - What To Do After The Position Is 'On' And Things Start To Move!"

In options trading, knowing how to Manage Your Positions is absolutely crucial to your success.

And as I stated above, Position Management and Morphing are subjects not taught by any other options trading education company. So I invite you to join us this Wednesday night for a webinar unlike any you've ever seen before.

You'll soon know what it takes to become a consistently successful options trader, perhaps even trading for a living if you so desire. Just like Ron Ianieri, and other professional options floor traders.

Click here for the link to register for this special webinar:

Monday, October 20, 2008

Weekly Stock Pick

Another wild ride on Wall Street again last week! As the credit freeze warms up this week, there could be some buying of obliterated stocks. It could also include wild swings and might retest lows as traders and investors focus on the very good possibility of a declining economy and recession realities. This week I’m looking to buy select stocks with strong balance sheets, very low price to earnings ratios, and revenues from global operations. My main concern right now is if there will be enough money flow back into the market this week to provide some support, or the bottom drops out on stock prices again later in the week.

Scanning the charts this week I’ve come up with a strong buy candidate, but if the general market goes the other way, its stop-loss again probably on my main stock pick of the week. My pick this week is a diversified specialty metals producer with a PE ratio of under 4, compared with the S&P500 trading at just under 12. With Friday’s closing price its discounted 75% from its year to date high, and it has revenue from global operations. Just the kind of company I’m looking for to possibly invest in long term.

Buy Long Allegheny Technologies. Ticker ATI

Buy Entry: Buy at 20.02 to 24.32

Stop-Loss: 19.75. If support at 20 fails, the price could easily hit 16 or lower, which would be a once in a lifetime buy in my opinion.

Take Profit Areas:

34.83 to 35.78



The stock market has gone down so much, or should I say, been decimated on crisis of confidence coming from the credit crunch liquidity crisis. In my opinion it’s a buying opportunity for select stocks that have a strong balance sheet, selling at extremely low PE ratios, with global operations and exposure. ATI fits my investment model here. Jim Cramer said last week. “Don’t buy ATI. It should not be considered at least until the Boeing strike is over.” In my opinion the Boeing strike should not affect ATI’s EPS that much with their diversified revenues streams, and Cramer has been more wrong than right lately, just as anyone else has been, myself included. My lesson learned from this financial chaos, is don't go against the fear component of the market even though some equities look super-cheap right now. Cash is still king right now.

Allegheny Technologies Company Profile from Google

Allegheny Technologies Incorporated (ATI) is a diversified specialty metals producer. The Company’s products include titanium and titanium alloys, nickel-based alloys and superalloys, zirconium, hafnium and niobium, stainless and specialty steel alloys, grain-oriented electrical steel, tungsten-based materials and cutting tools, carbon alloy impression die forgings, and grey and ductile iron castings. ATI’s specialty metals are produced in a range of alloys and product forms, and are selected for use in environments that demand metals having hardness, toughness, strength, resistance to heat, corrosion or abrasion, or a combination of these characteristics. The Company focuses its technological and unsurpassed manufacturing capabilities to serve global end use markets with diversified and specialized product offerings. It operates in three business segments: High Performance Metals Segment, Flat-Rolled Products Segment and Engineered Products Segment.

Click here to review and Trial the Trading Software I used in determining my buy long position on ATI. Email us at to receive a 5% discount purchase code.

Click the Allegheny Technologies Stock Chart for a Larger View

Allegheny Technologies Stock Chart

Wednesday, October 15, 2008

Trade Or No Trade Forex

Sometimes not trading is the best trade of all. Read on.

By Rob Booker of InterbankFX

Trading currency is risky. You can sustain the total loss of your trading capital.

In the midst of one of the most volatile periods in the forex market in the last 10 years, what are you doing right now to protect your capital? What are the top 10 ways you, every day, manage your risk? Your trading account doesn't represent just the $500, or $1,000, or $100,000 that you have deposited. It represents possible future gains (or losses, of course). If you deplete all that capital on reckless trades, what will you have left to trade with?

It's always better to sit on your trading capital than it is to use it recklessly.

Big moves in the currency markets are exciting, for sure. Everyone seems to love a trend and loves even more to talk about how they caught a big piece of it. But we all know what it feels like to take one too many trades, or to risk too much on a single position, or to try to pick a bottom (or top) in the market and then find ourselves losing a significant amount of money.

Are you currently riding losing positions? Here are some thoughts.

I can't tell you whether you should open or close any specific trades. But as you think about your trades, consider the following questions:

1. How does your current loss compare with what you expected to lose, based on the testing of the system you are trading?

2. If your system is not tested, and you do not know what the expected rate or size of losses should be, what can you do right now to find that information?

3. Have you shown your account to someone that you trust, an experienced trader, who can help you look at your positions and talk about them?

4. If you feel ashamed of having lost a great deal of money, consider what you can do to face that embarrassment head-on: it is better to deal uncomfortably with a loss in the open than it is to privately blow your entire account. Any pride you feel that you are protecting by not talking openly about your mistakes will, in the end, be a very expensive investment.

5. Remember that everyone has experienced losses. Even significant ones. Warren Buffett's company Berkshire Hathaway is named for the textile company he invested in that became a sinkhole for money and cost him a great deal of time, effort, and capital. Any successful trader you speak to will frankly discuss the worst trades they've made and what they learned. These experiences have been, in some cases, more instructive and meaningful than even their most profitable trades.

I take a lot of flack at times for suggesting that you are better off speaking openly about your trading mistakes with other people. I don't say that because I delight in hearing about your mistakes. I do it because if there is any possible way that you can find your way out of the losing trades you're in, isn't it worth it to actively and openly try to find that solution?

Are you currently experiencing unusually large gains? Here are some thoughts.

There is nothing quite like the joy of making a good trade. We like to be right. We enjoy the thought that we planned, executed, and closed a position successfully. Here are some thoughts if you've recently found yourself in this fortunate circumstance:

1. Well done! Congratulations on the profitable trading!

2. Remember that your profits are only "on paper" until you take them out of your account. A close friend of mine accomplished the nearly unbelievable feat of earning profits of over $60,000 in his trading account earlier this year. He sadly lost all but $3,000 of that money, in a margin call, in just a couple of weeks - as he let the entire account slip away by making trades that were far too big. Princess Leia once told Grand Moff Tarkin, "the tighter your grip, the more star systems will slip through your fingers." Substitute "pips" for "star systems" and you have yourself the beginning of a good book about trading psychology.

3. It's easy to fall prey to the worry that you did not hold onto your winning positions long enough. Be careful about being ungrateful for the winners that you do have. Don't let what you didn't get spoil what you did get.

4. Just because you've had some good trades does not mean that you have "figured it out." There is no holy grail of trading. Every trading system has its weaknesses. Be careful not to concentrate so much on the good points as to not pay attention to what can go wrong.

5. Consider using part of your profits as a "Research and Development" budget. With your profits, you may have bought yourself some time to test, fine tune, or otherwise improve your trading skills. I'm not saying you should spend your money on education, or books - or spend any money at all. Perhaps the profits simply give you some breathing room to sit back and deeply think about what you did that got you to this point where you have experienced some success. Learn from your success!

Most of all, please don't become so accustomed to this huge market movement that you expect these huge trends to come along every week of the year. We are experiencing volatility that is off the charts, that is higher than anything we've seen in a long time. Most of the time, the market does not move like this - so please do not start to expect that the GBP/JPY is going to move 1,000 pips every day for you.

Remember: We're here for you.

You can call or chat with the IBFX offices anytime you have a question about your demo or live account, or even if you don't have an active account with us right now at all. Although the representatives can't tell you what to trade or how to trade it, they love to hear from you and to talk with you about how you are doing, what questions you have, and more.

Click here for more Rob Booker commentary, and the InterbankFX Metaquotes Forex Trading Platform.

Tuesday, October 14, 2008

Last Chance Market Mastery Home Study Course

Have you calmed down yet? Many traders have, so hopefully you have, too.

What am I talking about?

The non-stop media blitz of FEAR that we've been pounded with over the past several weeks.

It's been very interesting to watch the polarization in the stock trading education community.

Here's what happened:

The experienced, collected stock trading "pros" who've been around the block did their best to calm down the easily-excitable individuals.

They did this with encouraging words, trading videos, and even some complimentary training to demonstrate how NOW is potentially one of the best times in our LIFETIME to get in on the coming profit potential the market is about to serve

In my opinion, 30+ year trader Bill Poulos did one of the best jobs trying to "pour cold water" on the media hysterics last week when he released a huge amount of multimedia training material.

It was all solid, actionable stuff, and it tied directly into his new Market Mastery Protege Program home study course.

Many traders took advantage of it and are now "locked in" to his charter group of students he's already begun to work with to show them how to navigate through today's markets, and how to spot profit potential again & again, but many traders missed out, too.

However, you may have a 'second chance' . . .

These Folks Calmed Down

Bill recognizes that a lot of traders were indeed "spooked" last week as otherwise sane individuals "froze up" and weren't able to make any kind of decision around what to do in the markets.

After spending last weekend answering emails from his readers, he received more than a few "pleas" asking if there were any more openings in his program.

So he decided to let 50 more traders into his now sold out Market Mastery Protege Program.

If you were one of the individuals who was "on the fence" last week about this program and missed out, here are the details:

From now until Thursday, October 16th, at 11:59pm Eastern (New York time), you and 49 other students can get in.

That's it.

If you miss out this time, sorry, but Bill needs to move on and focus on the traders who DID take action to better their future by joining his Market Mastery Protege Program.

To see the latest inventory count and to reserve your copy, check here:

Good day, good trading investing,

P.S. Bill currently has no plans to release large numbers of this course any time soon, so if you want to be one of the "Final 50", please reserve your copy now here:

Monday, October 13, 2008

Weekly Stock Pick

Scanning the stock charts this week after last weeks worst market performance I’ve ever seen, ( i’ve been investing trading the markets since 1989 ) you may think twice about taking long positions right now, or it makes you think the market could be bottoming. I’m thinking both ways actually. I think we are in a long-term bear market, and it will continue for some time. In the short to intermediate term, I am looking for a reversal back to the upside up to previous support which is now current resistance.

The only decent high reward low risk long or short trade I could find for this week is a long position on a building materials manufacturer that provides energy efficient materials for homes and buildings. As Boone Pickens has said, the next big potential crisis after the financial sector melt-down, is the energy sector. So, if the USA doesn’t get their act together on the energy situation, we will just be sending more money to the Middle East for more oil as we’ve been doing in the past.

We do need to improve our dependency of energy going forward into the long-term future to reduce energy dependency, and this company provides much needed materials to provide that energy efficiency to buildings that currently waste about 40% of America’s total energy according to the U.S. Department of Energy. Buildings are clearly the primary energy user in the USA followed by industry and transportation. This stock pick of mine is a buy long trade only right now. With the current market environment, I wouldn’t want to be buying and holding right now.

Buy Long Owens Corning. Ticker OC

Buy Entry: Buy at 17.62 to 18.42.

Stop-Loss: 17.00. Tight stop-loss for the current market environment.

Note: If 17 gives way, OC price could head down further to possibly 12.26 to 12.80 from what my chart supports are telling me, which could make a very nice buy in position for the long term.

Take Profit Areas:

23.72 to 25.71

27.38 to 29.55

29.65 to 32.01

Owens Corning Company Profile from Google Finance

Owens Corning is a producer of residential and commercial building materials and glass fiber reinforcements, and other similar materials for composite systems. It operates within two product categories: building materials, which includes its Insulating Systems, Roofing and Asphalt, and Other Building Materials and Services segments, and composites, which includes the Composite Solutions segment. Through its building materials product category, Owens Corning manufactures and sells products primarily in the United States, Canada, Asia and Latin America, and through its composites product category, the Company manufactures and sells products worldwide. On November 1, 2007, Owens Corning acquired Saint-Gobain's reinforcements and composite fabrics businesses. In August 2007, the Company sold its Siding Solutions business, a component of its Other Building Materials and Services segment. In September 2007, the Company its Fabwel unit, a component of its Composite Solutions segment.

Click the OC Stock Chart for a larger view.

Owens Corning Stock Chart

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Thursday, October 09, 2008

Full Press Congress Finance

As we repeatedly predicted, many, many moons ago, and most notably within several issues of "The Options Specialist", Options University's monthly newsletter, we've arrived at the time in which Congress is now in "full press" mode of their predictable "witch hunt" looking to "string up" someone as the "fall guy" for this cataclysm that Congress itself not only failed to prevent but in fact actually encouraged. That's an entirely different matter however and not our focus at the moment. We were just reminded again earlier this week that things could have been much different, not only for the markets but for many investors that relied on the typical news sources for a "read" on things. We have to take exception with comments made today by Lehman Brothers Holdings CEO Richard "Dick" Fuld in front of the House Committee on Government Reform. On Monday, he served as the "poster boy du jour" for the posturing pols. Below we're quoting directly from the prepared remarks of one Dick Fuld. He's just the latest "tricky Dick" to become a thorn in this country's side but a few lines that we've highlighted truly astounded us. Behold:

"No one realized the extent and magnitude of these problems, nor how the deterioration of m.ortgage-backed assets would infect other types of assets and threaten our entire system. In April 2006, Chairman Bernanke predicted that the housing market "will most likely experience a gradual cooling rather than a sharp slowdown." In March 2007, "the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained." Similarly, Secretary Paulson said in June 2007 that the crisis in the m.ortgage markets "will not affect the economy overall," echoing the views of the International Monetary Fund. And at Lehman Brothers' annual shareholder meeting, I too said what I absolutely believed to be true at the time - that the worst of the impact to the financial markets was behind us. With the benefit of hindsight, I can now say that I and many others were wrong. Far from the credit crisis being contained, we now exist in a world where there are no major independent investment banks; where AIG, Fannie Mae and Freddie Mac are under government control; where we are seeing the largest bank seizures in history; and where we are struggling daily to stabilize the financial system. These events have been as stunning as they have been swift. On September 14, there were four major stand-alone investment banks, and they were considered essential for the flow of capital to and investment in American business. Within a week, there were none. Since July of this year, nine banks across the United States have been taken over by government regulators. Creditors and shareholders have lost money on their investments, employees in the financial industry - from support staff, administrative professionals, and recent college graduates to thirty-year veterans - have already lost jobs. Around our country, workers in industries dependent upon the flow of credit fear they could be next."

Fortunately we're able to produce a track record across various media of having forecast just such a scenario. We don't claim to be alone in that as a few others were certainly sounding the alarms but we were vociferously consistent while remaining specific and exposed the mainstream financial media as the Wall St. cheerleaders that they are in fact are and remain.

There are too many factors to go into of why this is not the right thing to do and why the Federal Reserve is just a puppet to the big banks. The reason why this band-aid will only help in the short term is that with rates decreasing banks can borrow money at a cheaper rate. The lower the interest rates are the looser the lending practices become. This is what we saw with the last housing bubble. Short term rates were cheap, long term rates were relatively cheap allowing people to finance and exorbitant amounts of debt in their house. They used their houses as ATM's. I am all for using equity in smart ways. I suggest keeping about a max of 25% equity in your house and using the balance to create wealth in other ways. But back to the economy. SO to bail out themselves, banks need to get the interest rates down to a level where investors will start to purchase m.ortgage backed securities that offer a little higher rate than average. The problem is now why would anyone get into a risky m.ortgage backed security or CDO (Collateralized Debt Obligation) for slightly better than average return? You wouldn't! There needs to be a complete flush out of these old products. New standards and new risk measures have to be installed to reduce the risk for the average investor to get back into the murky waters. Banks are on the hook for all of the CDO's on their books at this time and there is still more to come. This interest cut will not get people interested in the CDO's until the risk is reduced. The banks cannot sell these worthless pieces of paper to anyone so it is forcing them to write them down. We are now getting numb to the fact the banks are writing down multi-billion dollar quarters. How many years does it take to get back those billions of dollars in revenue? I think the banks are insolvent at this point, but the Fed will print as many dollars as possible to keep the major banks afloat. They will also force banks to merge to hide the carnage. Case in point is the Countrywide deal. If Countrywide failed, we would have even larger problems.

Add to all of this the weak fundamental picture that remains, and the constantly amended financial write-downs and the "worst is over" kool-aid could be souring in the stomachs of even the most ardent and gullible sheep. Sorry, I meant bulls. What the matter of the next couple of months really boils down to is: Who and what is going to save the markets this time? Since October, the two times that the INDU approached 20% correction from its highs, surprise stimulus and liquidity measures were miraculously revealed from Washington (the second of which was predicted the day before it happened in the OUS forum). A 20% retracement, of course, is an official bear market. Now I am no conspiracy guy, I even believe that we really landed on the moon, but it just seems a little coincidental that these measures were taken while we are in an election year, especially in an election year where there is widespread public dissatisfaction with the inc.umbent party.

The Grayman isn't absolving any of the culprits in this mess but unfortunately the damage has already been done. The really good news is that Washington will now subsidize not only the crooks on Wall St. but many foolish consum­ers as well. "Socialist Creep" had now become "Socialist Ramp". It seems as though a bailout is on the way for virtually every one and every group in "Bailout Nation". The f.r.e.e market will continue to take the majority of the blame and socialism will continue to win out. The irony is that the reckless intervention and manipulation by Washington and the FED combined with a practically worthless federal government are really what caused our current problems more so than anything else. The beauty of it all from their perspective is that they now have the f.r.e.e market set to play the "Fall Guy."

How would the Grayman like this to be re­solved? As Quixotic as it may be, we're calling for an "unwind" here. We'd like to see all of the players that participated in this tragedy be made to pay for it. That includes- but is not limited to- all the agents, brokers, loan offi­cers, inspectors, appraisers, attorneys, Wall St. salesmen et al. They had the party and they should experience the hangover. The more rational and reasonable investors who did not indulge in the mania shouldn't have to purchase the black coffee for these greedy opportunists let alone be responsible for nurs­ing them back to health. If the government can build an Atom bomb, fake a moon landing, and keep a straight face about inflation being under control, then they should be able to find enough bean counters to reconstruct the hous­ing bubble larceny to its sources and leave the rest of us alone.

The financials will be back on center stage again very shortly. We know that some hall of fame level shenanigans have been perpetrated in that sector to prop things up but we're curious to see if it can last. We know that all stops will be pulled to keep the charade going but we've found it interesting that commentators have begun to suggest that things will appear to have gotten better for the financials over the past quarter. Reality would argue otherwise as would our re­search but if investors are indeed optimistically looking towards this next round of reports that sets up potential for serious downside fireworks. Just as the warranted concern last time around served to propel the financials higher on the sub­sequent manipulation, the opposite could occur very shortly when the reports really start to come out.

BUT, let's get back to the present. We take no pleasure from actually witnessing in real time some of our worst economic fears become manifest. We're writing to implore investors to become familiar with even just a moderate body of practical options knowledge and a reasonable dose of our "alternative" commentary because that would have allowed investors to not only protect their portfolios, but depending upon the level of aggressiveness, possibly permitted sizable gains in this bear market environment. We encourage everybody to explore things further at Options aren't nearly as risky and inaccessible as they've been purported to be and learning how to use them the right way has never been as convenient, nor as critical as it is today.

Click here to use options to your benefit to circumvent what Uncle Sam is doing to your investment portfolio.

Wednesday, October 08, 2008

Daily Stock Market Outlook

Daily Stock Market Outlook ~ October 8

The December NASDAQ 100 was higher in late-overnight trading. Tuesday's decline saw December spike below long-term support marked by the 62% retracement level of the 2002-2007- rally crossing at 1354.93 before a short covering rally tempered some of its losses. While a brief pause in the decline is possible, the door remains open for additional downside risk near-term. If December extends this fall's decline, the 75% retracement level of the 2002-2007-rally crossing at 1162.31 is the next downside target. Stochastics and the RSI are bearish signaling that additional weakness is possible near-term. It will take closes above the 20-day moving average crossing at 1612.32 to confirm that a short-term low has been posted. The December NASDAQ 100 was up 32.50 pts. at 1369.00 as of 6:03 AM CST. First resistance is the 10-day moving average crossing at 1514.32. Second resistance is the 20-day moving average crossing at 1612.32. First support is the overnight low crossing at 1280.75. Second support is the 75% retracement level of the 2002- 2007-rally crossing at 1162.31. Overnight action sets the stage for a higher opening by December NASDAQ 100 when the day session begins later this morning.

The December S&P 500 index was lower overnight as it extends this month's huge decline. Panic selling continues to grip investors as they have lost confidence in the markets after government intervention has failed to unlock credit markets. December is consolidating above long-term support marked by the 75% retracement level of the 2002-2007-rally crossing at 969.20. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. While a late-overnight rally tempered some of its losses, the door remains open for additional weakness near-term. If December extends this fall's decline, the 87% retracement level of the aforementioned rally crossing at 866.35 is the next downside target. Closes above the 20-day moving average crossing at 1164.74 are needed to confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 1116.62. Second resistance is the 20-day moving average crossing at 1164.75. First support is the overnight low crossing at 962.50. Second support is the 87% retracement level of the aforementioned rally crossing at 866.35. The December S&P 500 Index was down 15.10 pts. at 990.70 as of 6:09 AM CST. Overnight action sets the stage for a lower opening by the December S&P 500 index when the day session begins later this morning.

Interest Rates

December T-bonds were higher overnight as it consolidates some of Tuesday's decline. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If December extends Monday's rally, September's high crossing at 123.75 is the next upside target. Closes below the 10-day moving average crossing at 119-08 would confirm that a short-term top has been posted. First resistance is Monday's high crossing at 122-11. Second resistance level is September's high crossing at 123-27. First support is the 20-day moving average crossing at 119-12. Second support is the 10-day moving average crossing at 119-08. Overnight action sets the stage for September T-bonds to open 18/32's to 22/32's higher when the day session begins later this morning.

Click here for the complete financial markets outlook for October 8th.

Tuesday, October 07, 2008

Stock Market Mastery

Last week, I alerted you to the charter release of the step-by-step Market Mastery Protege Program course that totally took the stock trading community by storm...

Well, if you've checked the website lately, then you know that only 73 copies of the course remain and the offer will be closed for good on Tuesday, October 7th, at 11:59pm Eastern time.

See the latest inventory count here:

Why It Makes Complete Sense

If you're still struggling with the stock market, ESPECIALLY with what's been going on in the market recently, or are just sick and tired of staring at your computer like a zombie for 2, 3, 4 hours a day or more, then I really encourage you to take 30+ year market veteran Bill Poulos's Market Mastery Protege Program for a
test drive.

Why? Well, I was thinking about what specifically it is that I like the best about this course and what sets it above most of the other methods and courses I've seen. Here's what I came up with:

COMPLETE -- This is one of the most complete stock trading courses I've ever seen. Period. There's material to get beginners going quickly, and it's structured in such a way that more experienced traders can jump right into the "meat" of the methods.

Further, it's a multimedia powerhouse -- from the screen capture CD-ROM videos to the full color reference manual to the detailed "trading blueprints". It's designed to make sure you really understand all the concepts quickly and effectively.

CLEAR -- Bill's teaching style is among the best I've ever seen. He speaks in a clear, nurturing way that steps you through all the material. It's very apparent why so many traders keep coming back to Bill's courses.

CONSTANT -- I think of this as the "surprise" of the course. Bill constantly follows-up with his students after they get his course. He mentions this on his open letter, but I really believe this is the true value of his course. His students receive regular new bonus video lessons, and Bill is fanatical about offering concise, thoughtful answers to his students' questions.

So that's what stands out for me about the Market Mastery Protege Program. And frankly, I'll even go out on a limb and say that if you can't succeed in the stock market with Bill's course, then you probably never will. That's how powerful his methods are.

Fair Warning

I cannot promise that copies of the Market Mastery Protege Program will be available when you visit the web page - it may already be completely sold out.

If that's the case, please put your name on the waiting list. Bill has no immediate plans to release any more copies of this course, but after he gets through mentoring his initial group of 950 students, he may introduce a few more (but it could be months before that happens - I can't say when).

If any copies are left, you can claim one here:

Good day good trading investing.

P.S. I just checked Bill's real-time inventory counter before sending this email to you and it now reads 67 copies available. Time is running out. You can check it here:

Monday, October 06, 2008

Weekly Stock Pick

Scanning the charts this week, it’s ironic that the best low risk high reward trade setup I could find is with a company that checks and rates companies financial information and provides other business information services. Too bad the US taxpayers didn’t have this company check the credit rating of the Fed, Fannie Mae, Freddie Mac, and the banks before their liquidity over-leveraged credit crisis started unfolding onto main-street.

I think the lesson learned here is to always do your homework to prevent future disasters of the situations you get involved in. In this over-loaded information age, it pays to have some high-technology services to help you out with that. I'm buying long on information analysis services in this century for sure.

Buy Long Dun & Bradstreet. Ticker DNB

Buy Entry: 87.17 to 90.53

Stop-Loss: 86.80

Take Profit Areas

95.67 to 98.24

98.45 to 100.10

101.12 to 102.82

107.32 to 109.12

125.16 to 127.26

The fundamental story behind Dun & Bradstreet is to say the least, is information. And in this age of mega amounts of information, companies like this provide a great service of weeding out the dis-information in information. After running a stock valuation based on all of DNB’s current fundamental numbers, the output on fair value is 130.00 per share. I think I forgot to input into the valuation model that there’s a major liquidity and financial markets crisis going on right now. Its three main competitors are Axiom ACXM, Equifax EFX, and InfoGroup IUSA. I see DNB as an attractive low risk 3:1 reward buy right now for at least a short to intermediate term trade.

Dun & Bradstreet Company Profile

The Dun & Bradstreet Corporation (D&B) is a source of commercial information and insight on businesses. As of December 31, 2007, the Company’s global commercial database contained more than 125 million business records. The database is enhanced by its DUNSRight Quality Process. The Company provides customers with four solution sets: Risk Management Solutions, Sales & Marketing Solutions, E-Business Solutions and Supply Management Solutions. D&B operates through two business segments: United States (U.S.), which consists solely of its United States operations, and International, which consists of its operations in Canada, Europe, Asia Pacific and Latin America. During the year ended December 31, 2007, the Company acquired First Research, Inc., Purisma Incorporated,, Inc., substantially all of the assets of n2Check Limited, and substantially all of the assets and certain liabilities of the Education Division of Automation Research, Inc., doing business as MKTG Services.

Click here to review and Trial the Trading Software I used in determining my buy long position on DNB. Be sure to email us at for the 5% discount code.

Click the image for a full size view.

Dun & Bradstreet

Wednesday, October 01, 2008

The Longest Page on the Fed's Web Site

"What We Do" -- Longest Page on the Fed's Web Site? Did you know the Fed accepts stocks as collateral for loans?

The way I figure it, the "What We Do" page on the Fed's internet site may soon be the longest one of the bunch.

Yesterday (Sept. 29) the Fed "significantly expanded" the billions of dollars it makes available to other central banks. And it did mean "significantly" -- to the tune of $630 billion. The liquidity crisis is reportedly so acute that the interbank dollar borrowing rate outside the U.S. had gone through the roof. So, the Fed beefed up yet another one of its recently created facilities (Term Auction Facility), in this case to allow central banks to "swap" their respective currencies for dollars.

Then there's the Primary Dealer Credit Facility, created this past March after the collapse of Bear Sterns. That facility may have reached a new height of activity two weeks ago in the wake of the Lehman Brothers bankruptcy on Sept. 15 -- The Wall Street Journal ran a page one story (Sept. 29) about this, which included this sentence about what happened on the weekend before the bankruptcy:

"Fed officials worked furiously through Sunday [Sept. 14] to expand that facility, allowing banks to put up as collateral for loans a wider range of securities, including stocks."

Yes, that said "stocks." The Federal Reserve lets banks put up shares of stocks as collateral for loans -- note as well the word "including." Including what, exactly?

Nothing I've found answers that question, because statements from the Fed at the time didn't even include stocks among the "wider range" of what it allowed: it said only that "eligible collateral for...auctions will now include all investment-grade debt securities."

Last time I looked, stocks ain't debt securities.

I will agree that a word like "Facility" sounds so much more, well, fiduciary... even if a descriptive phrase like "Come and get it!" is arguably more precise. Thing is, every time the Fed makes the credit window bigger the list of banks still around to use it gets smaller.

There's a lot to keep up with -- perhaps the hardest part is recognizing what to focus on. From that practical perspective alone, nothing in print today can "do the recognizing for you" like Bob Prechter's Elliott Wave Theorist and The Elliott Wave Financial Forecast. These publications can be on your computer screen in minutes: click here to learn more.

$138 Billion Inferences Update

The WSJ story I mentioned above explains how the Fed and Treasury badly underestimated the "dire" effect of Lehman's bankruptcy had had in world credit markets. Yet, nowhere does that story even mention the $138 billion chain of transfers from J.P. Morgan to Lehman and from the Fed to J.P. Morgan.
Today I reviewed all Open Market Operations listed by the New York Fed for September 14-16. Several operations included dollar amounts far larger than what looks typical for other dates, but no amounts correspond to the $138 billion. I have yet to receive my call backs from the New York Fed and Washington, DC Fed.

Stay tuned.

Click here to get the free report the Fed and government don't want you to see!