The Other Industrial Metals, Platinum and Palladium

Written By: DragonFly Capital

Platinum ($ PL_F) and Palladium ($ PA_F) are often forgotten. Especially when the price action in Gold ($ GC_F), Silver ($ SI_F) and Copper ($ HG_F) has been so volatile and ugly. But they have stories to tell too. And like Copper they are industrial metals. What are they saying.

The monthly chart above for Platinum paints a dim picture. The Relative Strength Index (RSI) is falling hard and the Moving Average Convergence Divergence (MACD) indicator has crossed negative. Adding to the drama is the Bollinger bands squeezing in as it starts to fall lower from the Median Line (ML) of the bullish Andrew’s Pitchfork toward the Lower Median Line (LML). Now with the LML attracting it to 1300, or 15% lower, with increasing volume it suggests a bleak future for the next few months.

Palladium is not any better. It also has a RSI that is moving steeply lower and a MACD that has crossed negative. This is being attracted to the ML of the bullish Pitchfork near 475 or almost 25% lower. Below that ML it gets ugly.

Platinum and Palladium are painting the same horrible economic picture that Copper has been showing. Despite the broad markets ability to hold up so far, it appears that all the industrial metals are signaling weakness. The divergence cannot go on for long. Pay attention and prepare.

For more ideas and deeper analysis using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.

Dragonfly Capital

Obama’s new tax on aviation

According to Bloomberg, the Obama administration has proposed a new $ 100/flight tax on turbine-powered aircraft. Such airplanes are already subject to a tax on every gallon of fuel used and, if chartered, a 7.5 percent excise tax on the ticket price. The existing taxes tend to favor efficiency. Al Gore’s Gulfstream will pay more than an efficient turboprop or light jet for the same trip. A charter trip in a heavy jet will pay more in tax than a charter trip in a light jet or turboprop. The new tax will do the opposite, imposing the same fee on a Gulfstream and a self-piloted Piper Meridian.

Mostly I’m confused by why anyone would want to create a new tax and associated federal bureaucracy (forms, help desk, inspectors, enforcement, appeals process) to collect it. If the goal is to raise more revenue, why not simply raise the rates on the existing taxes? Do we want our government to bleed us with paper cuts?

Philip Greenspun’s Weblog

The Weekend Trader – A Trader is Born

Sunday 8:12AM ET Update – The weekly PivotPoint Advisors Briefing for longer term cycles and portfolios has been updated on the Briefing Room tab of the PivotPoint site.

As you may be able to tell via the lack of recent posting, the last few weeks have been … well, no less than ”intense” as the full immersion of the current Jellie team enters its fourth and final week.

Now since the current effort is our ninth installment of what – with all due humility – many are now regarding as one of the top trader training efforts in the industry in terms of authenticity, value, and results, you’d think I’d stop wondering on occasion if its worth the effort. 

And by effort, I’m referring the to the behind-the-scenes effort that I purposely rarely discuss and few know about:

Such as the getting up at 3AM daily to trade and monitor Europe and summarize for the Jellie’s arrival a few hours later; the personal phone calls; the 160 hours of collective trading and market monitoring between 8AM and 4PM; the ongoing correcting of old habits and retraining of the minds throughout the day; the personal trading during the four weeks in FULL transparency which is an integral part of the effort; and the sacrificing of occasional personal trade opportunities and focus to respond to a critical question by a participant.

A reminder I’m a trader with zero staff who sets certain times aside for an apprentice-type effort … not a salesperson or trainer who tries to trade.

But the fact is that I do continue to at times wonder if it’s all worth it since not everyone will make it.

I wonder because I know full well that even despite providing the best foundation possible in terms of a continually improving program (enhacement tweaks have been over the first 8 efforts) over four weeks and 160 hours of of non-stop guidance, some will still fail.

For it’s been well documented that failure rate in this industry — like similar performance based professions such professional athletics – is huge … ranging anywhere from 70% to 90% depending on the study referenced.  And as such, I’m a realist in that not everyone entering what is quickly evolving into one of the top trader training efforts in the industry will succeed.

To digress for a moment, I remember a few years ago as we were going through the course’s beta development stage someone asking me if I would guarantee participant success.  Of course my mind immediately shifted to my two children for whom by the end of 2013, I will have spent close to a half million dollars in real money on their collective college educations with no guarantee of even a job upon graduation.  Imagine my asking Tufts that question! 

For as I tell every incoming participant, I can’t guarantee “success”, which is of course ultimately dependent upon each individual’s personal desire and effort over time.

What I do guarantee however with unending resolve, is that I’ll under-promise, over-deliver, and provide something of far, far greater value than they could possibly imagine, and that they’ll have my back for life.  And that they’ll NEVER pay me another cent for anything.

Yet I continue to wonder and soul search, frequently asking myself if we’re truly making a perceivable difference in this industry which remains in such desperate need of real education.  I soul search in part because of something a dear friend named Frank told me upon the launch of the Jellie program, which was his perception .. albeit completely incorrect and misguided … that I was using success to go over to the “the dark side”.

And then each time we enter the fourth week of the effort, my wonders are set aside as they turn into … well, wonderment.

For during each effort, as is the case with any educational offering, a few rise to the top.  I recall one trader (remember Marco from one of the early teams?) who ran off such a ridiculous string of successes, it made even my head spin.  And I remember another one whose broker called me to ask “what the hell have you done?”, and before my heart could completely sink expecting the worst, he explained – without violating client confidence – how this guy suddenly morphed into a model of consistency in all market rhythms.

But until now, I’ve never seen anything like the current team of eight.

You see, as we enter our final week of full-immersion in the tank, I know with confidence that everyone “gets it”.  Everyone.

So much, that my recent plans to provide selected schooled traders with capital are expanding … continuing to put my money where my mouth is.

The deal was cinched yesterday when just as I was about to comment on a market rhythm and setup for which one had to have a very keen eye, the observation had already been made and the trade already executed by a member of the team. 

At that point, I removed my headset, took a deep breath (which felt like my first in weeks), closed my eyes, and sat back.

For me, it was essentially like witnessing a birth.

And while it didn’t carry the obvious and far greater significance than one’s first physical or spiritual birth, this “birth of a trader” was still hugely important.

For now I know that after more than a few intentional “spanks” during the first few weeks, the umbilical cord can be severed and he can self-sustain his breathing on his own without assistance.

And at that point, the labor pains are suddenly forgotten.

Yes, three years ago (here’s the initial conceptual Jellie post, including the nudge from Phil Vischer’s “Me, Myself, and Bob” book) some may say we took a risk.  A risk of looking foolish, having intentions questioned, and of failing.

Yet as I said in a recent post, we take a risk every day we step out of bed.

And someone (make that someones) took a risk to give each of us life.

The take-away?

You see, the real risk in life is often not taking the risk.

Insider Jellie Tip – One of the cardinal Jellie rules I created long ago based on experience is to NEVER fade the 3:45pm – 4:15pm ET move for a number of reasons, including insufficient time for a pricing inefficiency to correct itself or for one to recover from a stop, loss of personal focus after a full day of trading, end-of-day settlement messes, and more.  Suffice it to say that the rule saved our behinds no less than three days during the current effort.

I spent over a quarter of a million dollars early in my career “learning” that one, and strongly encourage all traders to consider implementing a similar restriction.

Jellie Webinar Discount Is Back – In celebration of the current team’s “turning the corner”, as well as the upcoming GrowUganda mission trip, I’m pleased to announce that I’m once again discounting the 16-Hour Jellie Webinar Video series which chronicled the beta team’s eight-week journey by $ 250.  Just email me at don@donmillereducation.com and I’ll email a special discounted invoice. 

A reminder a portion of the Webinar proceeds goes to benefit our GrowUganda.org charity, where even small donations have a direct and tangible effect on human lives.

Trading After Dark – Look for an industry interview discussing the Trading After Dark episodes coming soon.

Local Alpha Program Kicks Off – I also ask for your prayers and support as we get ready to kick off our eleven-week fall Alpha program on Sunday night.  For those unfamiliar with the effort, the Alpha Course provides people from all backgrounds and cultures an opportunity to explore the Christian faith in a relaxed, non-threatening, and friendly atmosphere through a series of evening dinners.

The program has been attended by over 16 million people worldwide, and you can find out more information at www.alpha.org.

May God guide our local leadership team and participants through this important time.

Have a relaxing and peaceful weekend.

Don Miller’s S&P Trading Tank

Libertarians, Government and Choice

by Mike Kimel

It has been a very long time since I looked at the National Review. Apparently it is still there.

Jonah Goldberg (apparently also still there) had a post that begins like this:

And now let us recall the “Fable of the Shoes.”

In his 1973 Libertarian Manifesto, the late Murray Rothbard argued that the biggest obstacle in the road out of serfdom was “status quo bias.” In society, we’re accustomed to rapid change. “New products, new life styles, new ideas are often embraced eagerly.” Not so with government. When it comes to police or firefighting or sanitation, government must do those things because that’s what government has (allegedly) always done.

“So identified has the State become in the public mind with the provision of these services,” Rothbard laments, “that an attack on State financing appears to many people as an attack on the service itself.” The libertarian who wants to get the government out of a certain business is “treated in the same way as he would be if the government had, for various reasons, been supplying shoes as a tax-financed monopoly from time immemorial.”

If everyone had always gotten their shoes from the government, writes Rothbard, the proponent of shoe privatization would be greeted as a kind of lunatic. “How could you?” defenders of the status quo would squeal. “You are opposed to the public, and to poor people, wearing shoes! And who would supply shoes . . . if the government got out of the business? Tell us that! Be constructive! It’s easy to be negative and smart-alecky about government; but tell us who would supply shoes? Which people? How many shoe stores would be available in each city and town? . . . What material would they use? . . . Suppose a poor person didn’t have the money to buy a pair?”

All that is true. But what Rothbard apparently didn’t get, and no doubt Goldberg doesn’t either, is that it goes the other way too. If people always got their shoes from the private sector, it would never occur to anyone that the government might provide shoes. Now it might seem stupid for the government to be in the business of footwear distribution, and in general, outside of the military, my guess is that it is.

But sometimes a different approach is what works. Sometimes when the government is doing things, it is doing them inefficiently and the private sector can do better. But sometimes it goes the other way. Sometimes when the private sector is doing things, it is doing them inefficiently and the government can do better. And sometimes, sometimes its a good idea for things to be done worse, and in a way that only the government can.

I’ll give you an example. I’ve noted a few times that you can stroll into most car dealerships in Brazil today and buy a tri-flex car. That is, the same car can run on any mix of gasoline, ethanol and natural gas. (There are two fuel tanks – one for ethanol and/or gasoline and one for natural gas.) You can then drive that vehicle into any number of fueling stations and fill up with whatever fuel is going to get you the most miles (er, kilometers) for your dollar (er, real). The technology to run cars on a number of different fuels, which you won’t see in the US for a very long time, is marketed under such exotic brand names as GM, Ford, Toyota, Honda, Volkswagen and Fiat to name a few. (Look ’em up if you haven’t heard of ’em.)

I’ve posted on how it came to be that Brazilians have choices that Americans do not, namely to buy a tri-flex vehicle. The Brazilian government wanted to reduce the country’s dependence on gasoline, but it realized that nobody would buy a car that ran on a fuel other than gasoline if there was no place to buy that fuel, and hence no manufacturer would make such cars. The government also realized that Shell and Esso and Texaco (remember them?) weren’t going to start selling other types of fuel because there weren’t enough cars on the road that could use those fuels. But the Brazilian government owned an oil company that had a chain of gas stations. One fine day, that chain of gas stations started selling ethanol even though there was no market for it. It wasn’t profitable. It was insane. No private company would have done something that stupid. But the result, a few decades later, is that about 80% of cars sold in Brazil in 2010 were flex-fuel. Guess what percentage of cars sold in the US in 2010 were tri-flex?

Rothbard would never approve of what the Brazilian government did. Neither would Goldberg. Personally, I like having choices. I wish I could pick among three different fuels for my car and go with whichever is cheapest. I suspect that in a few decades, when that technology finally arrives in the US, Goldberg might like having those choices too.


Angry Bear

September 29th 2011 Market Recap

Another wild day of trade as a strong morning gap quickly eroded and stocks sold off throughout the afternoon until the last 30 minutes. Retail stocks were the largest victims as big names like Tiffany (TIF) traded down over 10% midday before settling off their lows.

Europe remains in focus and with tomorrow being the last day of trading to end the quarter, we should expect another “anything goes” session. There will be no post tomorrow as usual so I bid everyone a fantastic weekend and will see you all back here Monday evening 8-) .

Interesting Reads:

30 yr mortgage record low 4.01%, Bank of America to add $ 5 monthly debit card fee

Tomorrow’s Economic calender:

Market analysis:

Trend Table

Trend Nasdaq S&P 500 Russell 2000
Long-Term Down Down Down
Intermediate Down Down Down
Short-term Down Down Down

(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend

*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.

Original Post: September 29th 2011 Market Recap



TraderMike.net

Top Trade Ideas for the Week of September 26, 2011: Bonus Idea

Written By: DragonFly Capital

Here is your Bonus Idea with links to the full Top Ten:

Hershey Foods, Ticker: $ HSY

Hershey Foods rose strongly off of support of the 50 day Simple Moving Average (SMA) and is now at previous resistance. But it got there with a long bullish Marubozu candle on Friday. It also has a Relative strength Index (RSI) that is strong and has held over 50 and an Moving Average Convergence Divergence (MACD) indicator that kissed and is moving higher, both supporting more upside. If it can get over 59.70, then it has free air higher and targets of 60.70 and 63.

The Best

The Rest

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.

After reviewing over 900 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Saturday which rolling into the last week of the third Quarter, looks for Gold and Oil to see more downside. The US Dollar Index and US Treasuries look to continue higher. The Shanghai Composite and Emerging Markets also look to continue their down moves. Volatility looks to remain elevated and possibly break higher. The equity Index ETF’s, SPY, IWM, and QQQ are all looking better to the downside. The QQQ again may be the key to holding the market together. If it loses support of the flag, the SPY and IWM could take the whole market lower. A spike in Volatility and continued moves higher in Treasuries and the Dollar Index should ensure it. Use this information as you prepare for the coming week and trade’m well.

Dragonfly Capital

Angry Bear contributor now at Economonitor

Angry Bear contributor Rebecca Wilder has begun writing her own column, The Wilder View, at the internationally prestigious Economonitor (Nouriel Roubini).

The Wilder View at Economonitor

Europe: Why the One-Size-Fits-All Solution Won’t Work and

Linking sovereign risk to corporate credit spreads in Europe

…and is interviewed and quoted by Floyd Norris in the New York Times.

Government Debt Doesn’t Tell the Whole Story
New York Times by Floyd Norris

In Ireland, as in Spain, the government paid down debt while private sector grew,” said Rebecca Wilder, an economist and money manager whose blog at the …

You can follow her there in the sidebar feed for other blog contributions.


Angry Bear

BBQ Trade Suggests Summer is Not Over

Written By: DragonFly Capital

Summer is winding down. The Labor Day Weekend barbeques are done, the kids are back at school, and the sun is setting earlier every night. The signs are everywhere, except in the charts for food stocks. From this perspective the summer barbeque lives on and fall and winter are still on the back burner. Let me explain. The symbol of the barbeque is without a doubt the hamburger. And what is the one thing that everyone puts on their hamburger? Ketchup of course. Take a look at the charts for the iPath Dow Jones-UBS Livestock Subindex Total Return ETN, $ COW, and HJ Heinz, $ HNZ. The chart for $ COW below shows that it has been in a summer pop up to downtrend resistance, after bottoming near Memorial day. It is now moving higher to resistance at 29.50 and

printed a bullish Marubozu candle Wednesday. Over 29.50 it has resistance higher at 30, the downtrend line, and a break through finds resistance higher at 30.50. The Relative Strength Index (RSI) is rising and the Moving Average Convergence Divergence (MACD) indicator is about to cross positive. These both support further upside. A stop can be place just under 29.00. Burgers look good. So what about Ketchup? The chart for $ HNZ below also looks bullish. It ran higher to resistance at 53 on Wednesday off of a higher low. It also has a RSI that is rising and a MACD that

refuses to cross negative and is now building higher. Over 53 it has resistance higher at 54 and 54.50 before clear air. A stop can be placed at 52.20. With burgers looking good it should come as no surprise that ketchup looks good as well. So the barbeque trade is still on. But there is further evidence when you look to the chart of Campbell Soup, $ CPB, the flag bearer for fall. This stock is in a bear flag, like the broad market indexes. It has a RSI that stalled after rising to the mid line and a MACD that peaked and is waning. An attempt at an early Autumn but not successful. It may move a bit higher from the current 31.65 level to the top of the flag and resistance at 32.50, but if you buy into that ride higher I would take profits and tighten stops there. Use 31.25 as a stop, which if triggered shows the flag still intact. It is not quite time for soup yet.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

Dragonfly Capital

Paring or Pairing the Exchanges

Written By: DragonFly Capital

The financial sector is a complete mess. But there are still ways to trade financial stocks without risking a bankroll. A pairs trade can often make a lot of sense. One pair I follow in the financial sector is the CBOE Holdings, $ CBOE, against the IntercontinentalExchange, $ ICE. The ratio chart of these two exchanges is below and shows a rising trend line of support since mid July, now converging with resistance creating an ascending triangle. Above the top of that triangle at a ratio of 0.222 there is some previous resistance at 0.230 and then 0.244. The Relative Strength Index

(RSI) of the ratio is rising and the Moving Average Convergence Divergence (MACD) indicator is playing with a possible cross positive. A break above the top of the triangle also has a pattern target of 0.254.

Trade: Buy 9 shares $ CBOE and sell short 2 shares of $ ICE on a break of the 0.222 ratio

With the breakout triggering, use a stop just under it at a ratio of 0.219. At the first target of 0.230 it pays $ 9.18-9.50 and at a ratio of 0.244 it pays $ 22.09-24.25 per pair traded, risking only about $ 2.10. That makes for a reward to risk ratio of over 4.3:1 at the lower target and over 10.5:1 at 2.44

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

Dragonfly Capital

Main impediment to job growth in the U.S. is politicians talking about “job creation”?

Seemingly every day politicians propose massive changes to U.S. taxes, laws, and budgets in order to “create jobs” (the politician will take the credit, presumably, if a small business owner decides to take the risk (and endure the paperwork) of hiring an additional worker; yet another cruel irony of doing business in the U.S.).

I’m wondering if a big impediment to job creation is in fact all of the talk about grand job creation schemes. Suppose that you own a business and you’re told that within a few months there will be some dramatic change in payroll tax rates, tax credits available for hiring new workers, etc. Would you hire people right now or wait until the dust settles and you know what the tax and regulatory environment will look like? (Debating tax credits for new workers seems like a particularly destructive activity; why hire a new worker today when, if you wait a month, the government might pick up most of the cost?)

A politician who proposes a 10-point “job creation” plan may be ensuring that few jobs will be created until all 10 points have been debated by Congress, passed into law or not, etc.

[Separately, this weekend I stayed with friends in California. I asked how one of their sons was doing. “He’s doing great,” they said, “with lots of work helping U.S. companies expand their business in China.” I replied that this was great news and that he should be congratulated for helping to pay for Social Security, Medicare, our various wars, etc. “Actually he’s not going to be contributing much because he renounced his U.S. citizenship and is now a citizen of Taiwan.”]

Philip Greenspun’s Weblog

Free Options Webinar: SMB’s Options Tribe September 13, 2011 at 5pm EDT: $NDX Calender Spreads

Tuesday  September 13, 2011 at 5:00 pm Eastern Daylight Time

SMB’s Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each week the community will meet online for the primary purpose of watching live presentations made by outstanding veteran options traders and experts in the world of options trading. This week, Jim Riggio will be demonstrating his approach to calender spreads in the $ NDX index.

Register for this FREE Webinar : Here

Seth Freudberg

Director, SMB Options Training Program

The SMB Options Training Program is a twelve month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg:   sfreudberg@smbcap.com.


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SMB Capital – Day Trading Blog

Yesterday’s Options Tribe Meeting: Iron Condors using SPX Index Options

SMB’s Options Tribe is an online community of options traders dedicated to sharing successful options trading ideas with all of our members worldwide. Each week the community will meet online for the primary purpose of watching live presentations made by outstanding veteran options traders and experts in the world of options trading. On Tuesday afternoon, Shelly Rosenberg demonstrated  his  approach to iron condors in the SPX index. If you couldn’t make it to the live webinar,  here’s your chance to watch the recording.

To view the recording: Click Here

Make sure to look out for the invitation to next week’s Tribe meeting– a unique approach NDX calendar spreads.  That invitation will appear on this blog shortly.

Seth Freudberg

Director, SMB Options Training Program

The SMB Options Training Program is a twelve month program designed for novice and intermediate level options traders who are seeking an intensive training process to learn how to trade options spreads for monthly income. For more information on this program contact Seth Freudberg:   sfreudberg@smbcap.com.



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SMB Capital – Day Trading Blog

That Weakness Meant Something

Just a random observation here – – – the market has bounced very quickly, but there are two things in the favor of the bears: (a) a meaningful amount of overhead supply, enveloped below in green; (b) the fact that the market did violate the supporting trendline, suggesting not only weakness but a lower probability that the market will be able to attain the upper boundary of its current trading range. It’s still too early to go hog-wild shorting, but a few select plays here and there make sense at these levels.

0907-es


Slope Of Hope with Tim Knight