Good Trading

My muses in valuable order, as it is time to think a bit about what our portfolio is, and what/where the stock market trades.


I read this from a Gann analyst:

KeyTurningDates.com: “ There is a major cycle due to turn the week ending July 30th. This cycle is aligning with three very strong Gann Angles, as follows:
1. The week ending July 30th is 90 trading days from the November 2008 low
2. The week ending July 30 is 144 trading weeks from the January 2008 low
3. The week ending July 30 is 180 trading days from the February 2007 high.

The November 2008 low occurred on November 21st, 2008 and was a panic climax to a strong sell off. The January 2008 low occurred on January 23, 2008 and also was a panic climax to a strong sell off. The February 2007 high occurred on February 20th, and was follow 5 trading days later by a one-day Dow crash of over 400 points.

Rarely do we see a set up like this one. And, as of this writing, I feel the odds favor the turn due the week ending July 30th being a high, followed by a possible strong decline into the first week in August”.

KeyTurningDates.com is a service that uses W.D. Gann math to calculate the where and when, and the “dates” that things could occur.”

What stood out in the summary I read above were first his Gann math, and then his use of astrology “when planets are at difficult angles, stocks can be risky”. The Foundation for the Study of Cycles, they claim, studies every Dow move since 1900 and notes that when the planets are at different angles, stocks can be risky. The correlation is too great to be a coincidence:

"On August 1st, with orb of a week on either side, we will have the most five planet alignments in thousands of years”.

As a psychologist Floyd knows that planetary alignments are typically non-events to the human mind, but the tight alignment of planets “will cause an enormous stress on mass human psychology, which is exactly what guides the financial markets. Transpersonally,however, in my study of psychology I believe there are key numeric patterns, planetary patterns and even doors to other universes on this earth.

Anything is truly believable. We know only what we know.

Bottom Line: We could see a repeat of the fall of 2008.

It is a full moon on 7/25. Floyd constantly sees correlation between market uneasiness and “crazy moves” on full moon days.


Okay, so now if you see nothing more in this downside and believe long term the market will rally and take us back in the 10,600 - 10,900 range, all highly possible, than consider:

*Buy FXI at market. 25% trailing stop, watched daily.

*It is a big win for small banks (QABA) as they will be exempt from many FDIC requirements and actually provide them with an advantage over larger banks with certain securities. Buy more QABA. This will be a good long-term hold.

*This is the shifting of the bases of power that Obama was elected on, yet cannot pass the grassroots of the Tea Party.
I worry about this, as the more bipartisanship that is created merely separates the positions of power, and nothing is really “given back to the people”. Nothing will then get done.

*600 million passenger cars are on the road around the world.

*There are 40 “megacities”-urban areas with more than 10 million residents living within the city, that are expected to develop by 2030.

*45% of the estimated amount of traffic in Brooklyn is caused by people looking to park.

*Real analysis of unemployment shows that we are 4 million below where we would be in a normal recovery, while the unemployment rate is 1.4 points higher and the employment-to-population is 1.4 points lower. Study this when you read the unemployment figures on Friday.

*Barron’s predicts “The Democrats will retain control of Congress this fall-just barely. Get ready for more intense gridlock and the end of Big Government.”

*My favorite measure of unemployment is U6, which includes the seriously underemployed, weighed in at a highly elevated 16.5%.
I also don’t believe anything but time will lower our unemployment rate, and our creation of new work concepts. Products, services, needs, ways to afford “pricing”.

*Half of our problem was within our consumption decades as a world that we wanted to buy more and more, and thusly had to have it cheaper, lowering wages to accommodate prices.

*We all know now that the G-20 agreed to “try” to cut deficits in half by 2013, but the Bank for International Settlements said doing so without hurting growth would be difficult.
Obama was snubbed at G-20 as he continued to define “deficit cuts are necessary, as is ongoing stimulus money that may have occur in both Europe and the U.S. again”.

*It is not as simple as jobs, or buy American, or boycott BP.

*We at OEX and Blue Chip Options continue to believe we are only in a deep correction, and NOT a fresh bear market.
We also do not understand how a market can move 400 points in a day will allow profits to be made for first the electronic high speed trader/hedge funds, and how rules must change.

*The market has moved 57% down in the last 18 months, followed by a 80% rally in 13 months, and that the size of the retrenchment to the size of the rise. 1000 is a key area on the S&P and Ramsey predicts we may have to hit it, or Dow 9520, former lows, before any “end of the end” can start.

Please stay with me. I flit around but there is a pattern and you can make money with what I uncover.

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We are intimidated by fast food.
It has overcome us, we are controlled by it, and it is making us obese.
We are doing this to ourselves.

This is a story of rape, fraud, bribery, greed, lust and free enterprise.
It begins simply.



Vix comprises a group of option contracts that reflect how much investors believe the S&P100 and S&P will move in the next 30 days.

We have been much more interested in Vix trading after review of Ipath S&P500 Vix Short Term Futures ETN (Symbol VXX).

VXX mirrors VIX and rises when option traders take out the most insurance against a falling stock market.

We’ve recently been testing a pretty simple formula: “if its above its 50 day moving average you buy because the trend favors increased volatility. If it falls below the 50 day moving average you sell.

This is betting on volatility. It is betting on how fast the game will get before it is played.
VIX investors must stay right on the chart, and right in the market.



It is partly the volatility, mostly the uncertainty, which drives Gold to record levels. The 12% drop the other day shocked a few folks, and notes again most gains flattens gold back.


S&P-must hold at 1025, would like to see moves of 1037, Nasdaq above 1762. See this and you’ll see the Dow and OEX trigger right back to each support and resistance line we post and TWEET.


Many traders see an overall weakness in oil for 2010, and many of the “grab it while it’s cheap” oil game has been hard to sell stock moves people have made (buying old oil greats,expecting a rebound) better be praying for a quite a few hurricanes, and supply outweighs demand.

With exception we again discuss XOM or Exxon Mobil.
Some analysts are pointing out that key investors are now shorting XOM.

We don’t know why. It’s got cash, reserves, new acquisitions, and is the most conservative of the slime, moving their way into natural gas and all energy revenue streams.

We are long XOM, and still see it at $90.00.
At 59.00 it’s a steal for a long-term core portfolio.


We made great money on our second TLT call, both long range. Many hold these positions through volatility and breath in panic screams….
We suggest locking in all of your profits at 50 to 70% when we hit the right signal, and just moving on.
TLT is a great ETF to buy to hold cash. It’s paying 4%.
For the many subscribers that write and ask “when to get into TLT again”, sorry, TLT is best as a trade only at certain times, and we teach TLT only in our Advanced Mentoring service , currently on wait list http://www.oexoptions.com/AdvancedMentoring/AM.html


This is a Floydian Rant:


Typically various groups take over the Republican Party over the years. Let’s see, we’ve had ( to name names) the gun owners, the Christian ultra conservatives, the business lobby, the defense hawks, and the anti-abortion activists.

This year is my favorite. It is now the “cut spending” party, SHOCKED that the liberals have brought us such a deficit, and accusing Obama of just throwing money at problems.

The facts: Federal Spending rose 36%, moving from surplus to deficit, when Georgey Bush and the neocons were in full control.

Yet, the stimulus bill, which was enacted to stop the out of control lack of regulations on Wall Street, the ignoring of our economic infrastructure being built only on “build for war, and build houses” collapsed.

Health care reform was carefully orchestrated by Karl Rove and team to “spin” socialism” and “kill your Grandmother (by Sarah Palin with the new tits), and that it would cost more, and the Tea Party movement was born on:

*Follow the Constitution ( we have not done so for over 40 years)
*Stop spending money (but do not cut my schools, roads, bus services, or libraries)
*Begin judging our teachers, the core of our lifeblood, on “performance”, but the “performance” being linked only to “tests” that show understanding of specific facts, and will cause a general revolution amongst teachers, already acting like Mom and Dad, and the caretakers.
My 28 year daughter, who teaches “inner city” South Florida, gaining her Masters in Education, and planning it as her career, is now ready to quit entirely off the testing and the publics lack of understanding of how complex the education system is.


The Republicans, of course, are leading the bandwagon on cutting of spending, yet in their tenures, have never done so, or have done so only to have the deficit pass to the next Democrat in office who shrinks the deficit.
The facts on this are startling, yet 9 in 10 Americans will tell you that the Republican are against “more taxes”.
And they are, for a select few.
And they are, as cutting spending now makes them blame others for 2/3 of our deficit alone being Medicare/Medicaid amortizations of debt, put in place by Democrats, yet not one Republican I’ve asked willing to “give these benefits up”.

It’s my favorite question: Whenever Floyd hears a Tea Party or Republican babble on the deficit he always says “ I so agree. Did you know you can “cancel” your rights to these socialism programs and return the potential funds”? Each answer is the same “but it is due me, and I am not willing to give it up.


We will see the end of paper money in our lifetimes. There will be a world currency controlled by a large committee that disperses to each nation. Oligarchs will rule.
All kinds of shit like this could really happen. This is a bad movie with comedy characters, and we watch them.

Good trading. Lots of information above. I’ll work on the website this week (I promise) and update holdings.

Dance-even with your relatives.

Be Well.

Floyd, the Trader

Run to the store and buy Rolling Stone July 8^th-22^nd Issue to read for yourself the great uncovering of our General that was just fired for being an idiot.

Then, turn the page and read “BP’s Next Disaster” by Tim Dickinson

http://www.rollingstone.com:80/politics/news/17390/120130

Here we get to read more about BP’s move into the Arctic, politics controlled by lobbyists and more of the rape of our people and earth.

It’s rather intimidating that Rolling Stone Magazine as uncovered, just this year:

-Matt Taibi’s expose on Goldman Sachs that later lead to the fraud investigation.

-Tim Dickinson’s expose on how the former Bush Administration used the Whitehouse

-Tim Dickinson’s above expose on Arctic Oil, sure to stun you

-Michael Hastings expose of “The Runaway General” that got him fired.

http://www.rollingstone.com:80/politics/news/17390/119236

Sad that true facts seem available only in “liberal” newspapers that truly hire freelance journalists.

Advanced Mentoring client MR always reads my "Floydian Rants" and does his research. On my last rant to the Tea Party's, created by Karl Rove, I noted that these idiots handed out The Constitution before each meeting, as if it were the Word of God. I pointed out one of the dudes that wrote this might have had good theory, but...

“I read up on Jefferson (based on a Floydian Tea Party Rant) and found out things like: Jefferson was again slavery in theory, but was so in debt that he could not afford to free the ones that worked for him - and never was able to escape that within his life time. Interesting that the virtue of life long indebtedness was already instilled by the 1700's. Seems like we need to keep searching our history books to find how "it ought to be." Maybe in truth it never really was "how it should be" which wouldn't be all that surprising, after all - we're human - and awfully dishonest, unfair, and brutal to each other historically.

...I see there is more. Reportedly fathered some children to one of his slaves. Allegedly questioned the existence of God. He diverged greatly from the orthodox Christian views of the day. Seems like he was rather liberal in some of his thinking. Died broke, the only reason he wasn't evicted from Monticello was because of his stature as a politician. He was in France during the drafting of the constitution, fine dining and having his slave trained as a French chef.”

Ahh, the Constitution. Right up there with The Bible. The Koran. Misinterpreted, and believed to be “law”

It is this kind of thinking, and you’ll read more below, that makes our country paralyzed without action, and the same type of thinking that has made our stock market a poker’s game at high speed.

On the "government's recommendation that BP pay $20 billion in damages, from Investors.com:

"Where is the Constitution does it say that a President has the authority to extract vast sums of money from a private enterprise and distribute it as he sees fit? Nowhere. It says that private property is not to be confiscated by the government without "due process of law". If you believe that the end justifies the means, then you don't believe in constitutional government, and without constitutional government, freedom cannot endure".

This is a perfect example for traders to learn from, to understand how false facts and "mis-information" clouds judgment. Sorry to Investors.com, and whatever Tea Party guru wrote this, but here's the Floydian rebuttal:

1. Nowhere in the Constitution does it say to invade a country without provocation, or does it "draft" only certain types of people.

2. The Constitution does not mention lobbyists and bribers, much as work during the writing of the Constitution (by a few guys that when you study them are truly not the "greatest of men", but what we have "historically made them out to be"

3. I believe the ends do justify the means under extreme conditions, and believe most everyone does, when they think clearly and not with some ingrained "bullcrap spiritual stuff" that we choose to interpret as we see fit, such as the "jihad" vs. "eye for an eye" vs. "thou shalt not kill". I also believe BP are phuckers, and we had to steal the money from them, as they stole the environment and livelihoods of millions for GREED, and would never have paid this back. Private enterprise does not work to well in a democracy, much as you may have been led to think otherwise.

4. There are many governments that are non-constitutional in which freedom endures.

5. Silly silly people. The Constitution is NOT the word of God, but words of men hundreds of years ago. A country in 2010 cannot be run by these rules, as there aren't even rules for many of the things we deal with. Where's North Korea, Afghanistan, or taxation of tanning salons and cigarettes, in the Constitution.

So to trade....what do you learn? Do not believe this fodder as it comes across the boards, the Palin to compare Obama to Hitler (Floyd hated George Bush II beyond comprehension for what he and gunman Cheney did, but even I would not compare their work to Hitler.

Do not listen to those that call names, and create their interpretation of scholarly works.

Do not fall for false information.

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Last week saw 1024 advances and 2419 declines. However there were equal new highs to new lows on the NYSE, and the Dow Jones s Industrials lost 2.94%, less than most of the major exchanges.

Oracle, (ORCL)which we own and are down 10% on, we have bought ongoing, and fourth fiscal quarter earnings at the business software giant surged 25% as revenue began to come in from its Sun Microsystems acquisition.

This stock will perform in the tech sector over time and we recommend as a buy.

We continue to also recommend Exxon (XOM), a value stock that has strength with their acquisition of XTO. Dividend. Long-term core holding, and a true chance at breakout to highs of $90.00.

We’re up 25% with Exxon from long term holding, with dividends always reinvested, and we’re buying more now. XOM is dirt-cheap.

And don’t worry, just as slimy and even more profitable than BP J

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Turmoil has marked events more this year than ever before.

Toyota was a crisis. Worldwide panic. News everywhere.

Toyota still has a good quarter, learns their lesson on quality control, and soon thereafter every major car company except Honda is hit with massive recalls also, but the “hit” is not there.

And from Toyota there was soon thereafter “the flash crash”, a 20 minute trading period in which companies that are well known actually hit zero, and more 25% trailing stop losses were executed by funds, individuals, and all of finance on the massive drop.

Okay, so some say it was a blip, and I’ve also read an intriguing study on how this 1000-point drop that shattered Wall Street could have occurred on a full Fibonacci retracement….and on and on.

I don’t really care.

What I care about is that it does not happen again, or that if this is the “new way”, let’s get ready, and buy gold bullion and run.

What concerns me is that no one talks about it and you can find little internet feed explaining the true precautions being set up, or if they are; it is as if the exchanges see it just as a “blip”, “easily corrected with a simple remedy: the adoption of cross-market trading halts for individual stocks so that that buyers can catch up with the sellers and vice versa.” (Jim McTague, Barrons).

It goes back to the story of the circuit breakers, what we had been told in the past was “failsafe” for moves like this. Proctor and Gamble gossip cost us billions? Something is wrong.

Even VIX feels different. Buying fear is a good trade, just as selling confidence is usually a good sale. Sear, in Striking Point, says “ People are buying puts because fear is high , Vix at a lofty 35…..and remember “the market’s mainstay strategy remains selling stocks to increase investment returns, or selling puts to lower the cost of buying stocks. 14 million contracts trade on an average day.

Much of that option volume is institutional: buying hedges, adjusting hedges, puts against positions taken. Options are an art, science, and card game.

The rules are changing in the card game.

Over the next week we will be updating our core and speculative portfolio performance on the website, and updating buy/sell/hold recommendations.

For new traders with us: we do not keep track of options. When Floyd recommends the rules of engagement are out there, with buy/sell, stop loss.

We have many types of traders: brokers, analysts, big investors, and small investors. You define how to take profits.

As examples, our recent long call on Apple (AAPL) has been profitable to 40%

Our long-term TLT call has come back, and our new recommendation to a Sept TLT call is 8% up. We’re down 10 to 30% with our long-term call trades on Amazon and Mosaic, and are following the rules of our original recommendations.

During the week when we make comments “long the market” or “Dow or SPX tops” we are providing long-term trend indicators.

As an example, and a sad one, we saw Gold topping at 1170 and sold our final thirds at 1170. We’ve missed another 70 points of profit, and we now hold an OTM put on Gold, continuing to see a Pause and breakdown in Gold and Silver, very short term, and we obsess about it daily.

We’re up with AU, our gold mine, and we continue to want 15% of our portfolio in Gold, Silver or Platinum in the next three months. We’re just waiting for the right entry.

And, just back from a trip overseas, I am proud of this vast nation, this country, and our will.

I only question our understanding of cause and effect, and our ability to be led by the charismatic and the thieves, believing in “right and wrong”.

There is no such thing as black and white. This may take a lifetime to learn.

Be Well and Do Good

Floyd the Trader