The AFR reported 19th December, front page, that stock broking firm
Pattersons is facing a class action from clients after one of its
brokers speculatively traded many of his clients discretionary accounts
in an unauthorised fashion. I do urge you to follow such events as and
when they occur, and dissect what is reported and relate it to the
charts. It seems this guy was selling call options not covered by
stock, betting over the past year that our stock market would fall by as
much as 10 percent. Interesting is it not ? Trading against the
trend. Let me repeat that: trading against the trend and against the
overbalance position as well. Absolute suicide. As you can see in the
article, he lost the bet.
Never trade futures and options against the trend unless you have an
exceptionally good and valid time reason.
You should always note such heavyweights losing because:
perversly, markets cannot fall whilst this is happening. This guy, and
others, are providing the liquidity for the buyers on the way up. Only
once the shorts are all done and finished can the market fall
substantially. In other words, we have to be all in at the top. Gann
said this, but in another way: he said that at the end of important
time frames, volume comes into the market. Study the charts the way he
askes you and you will see this.
To be good at trading and forecasting, you need to get to the cause. As
Gann said, the cause of an event has effected markets a long way before
it is manifest in any public announcement. It is the same with what you
see around you. Next time you see yet another African nation in the
depths of starvation, pity will drive the world to send food aid.
Sounds a good thing to do, and relieves our conscience, but it is
wrong. What should happen is this:
the relevent aid agencies should step in and buy food from the _local
areas and nearby farmers_, or nearby countries.
This apparantly not-so-blindingly obvious behaviour doesn't happen
because it challenges the political basis for food aid, the vested
interests. Most countries especially say the US, insist that food aid
provided as famine relief, if coming from the US, must be grown in the
US, and shipped on US vessels. Only four US agribusinesses and five US
shipping companies share most of the funds the US provides to ship
famine relief. And just in case you think the food agencies and so
called charitable organisations have nothing to do with this game, they
promote the behaviour further since they all depend for much of their
budget on payments for the food relief and getting it to where it is
allegedly needed. Worse, it is sometimes these agencies themselves that
actually end up selling the government donated (but bought from US
agribusinesses) food relief on local markets in these same very poor
countries, to generate dollars for their anti-poverty programs. Third
world poverty is now an entrenched profit generator, via government
granted hand-outs. Poverty is not a natural state of affairs, and
always indicates the presence of government granted licences.
I have included a scan for your reading about the urge to conform.
Something to keep in mind as the markets approach the end of large
timeframes - another due around 2009. (Next email now, I want to get
this one away with the charts.)
Packer snr has passed on. Descriptions come to the fore of all the
papers like "a great Australian", "Larger than life", "successful
business man"... and on it goes. Note, and this is essential if you are
to see things the way they really are, most of Packer's business
ventures were not even remotely successful: what he was good at is
operating government granted monopolies - Channel 9, most of the casinos
in Australia and pay TV. All government granted. These were very
successful. What he was good at was of course cultivating close - very
close - government ties in order to protect the value of those licenses;
a value the government could at any time redirect into the public purse
if it chose to. He cared not which side of politics was in power, and
had both sides of the political pendulum working for him.
The value of these licenses is not wealth, but claims upon wealth.
Their price (but not value) rises and falls with the business and real
estate cycles. (And the cycle occurs because we allow those values to
capitalise into readily tradable privileges.) These values do not add
to the produced wealth of the country. Remember that at the top of the
current real estate led cycle. If memory serves me correctly, he passed
on very close to 15 years from his first (publicly diagnosed at least)
health related issues.
Stock watch, ics, see attached.
Again, this is trying to see what could lie further ahead beyond just
the left hand side of the chart. At the same time, we are trying to use
all the patterns and shapes, time, price, overbalance and volume to
maximise our chances of success, _and also not guessing_, which we
achieve by simply allowing others in the market to confirm the buy if,
and only if, the stock crosses accumulation points as Gann so ably
pointed out in his examples. This helps us avoid having our precious
capital tied up in stocks going nowhere. It also means we don't have to
try and be smart, or to prove we are smarter than the market, which we
can never be. Patience, wait for the breaks.
(This company management say they have some great technology for health
care pyts system. The latest company release would have us believe it
is the greatest thing invented. As you can see, the chart is telling
you that the market has not yet made up its mind. Never believe what
management tell you, wait for the rest of the market to confirm it with
a clear uptrend. Then just trade the trend. Pretty simple n'est pas ?
Aahhh if only...) See blt for a similar break, if it trades above 20,
the next mid point it should go to is 30 for starters.
I have included a few more examples of how time and price come together,
just like Gann used to show, see jum, wss, adi, bdm sbm. There are
plenty of others doing the same at present, eg, bkp
Notice how coe came back to its mid point, and is now just about to
complete the repeat range. Expect news at repeat runs. Learn from past
examples like this, as other stocks do the same.
Therefore, along the same lines, have a look at sen. Watch now for a
move back to between 55 and 62 cents. 62 would be an ideal price for
the next low, cause then you could add the weekly range of 59 cents, to
get 121, repeat range, which is exactly the mid point of the monthly
extreme prices. That would be pretty neat, and prove how the stock is
working constantly to mid points - as they all do. Good days for the 62
cent low to happen would be Jan 18th, or Feb 9 or thereabouts. If this
happens, you have yourself a buy zone, ready for the next run into the
mid point of the monthly extremes. (Trade the chart as it happens
though, not the forecast.)
Just out of interest, - dec 31 extreme temp,then the change, bushfires
in Victoria's north. Add 42 to 45 days and we have Feb 12 to 15. See
email of dec 13 for more on the weather extremes noted before. Mid Feb
could be interesting for weather events and other things perhaps.
Previous highest recorded Dec 31 temperature was 1862 - 143/144 years ago.