Quick Update on Market Mayhem $SPY $DIA

Hello Followers and clients!
Just want to put out a quick update about the market mayhem. China was an excuse to finally see a real correction in US markets. US economy is not in dire straights and we should not really see any major hits to our economy from China's woes. But a crash based on a foreign economy is unprecedented so it will be interesting to see how it pans out.
We came into this correction with more than 50% cash but we still took a drawdown. Currently it is recovering quickly. I saw no point in closing at lows. Some folks will have been hit hard due to hard stops and margin calls, so we are in better shape than many others. I added a bit of XIV as quickly as I could get the platforms open this morning. They were having some trouble with all the volume and volatility. IB performed much better than TOS which says a lot about IB.
Crashes are always an opportunity to get some real bargains but I don't think the opportunity is over. In my experience, crashes like this usually bounce before returning down to the scene of the crime and creating a double bottom that sees a real opportunity. We have plenty of room to take advantage of that and I intend to do so.

I just wanted to take a minute to alleviate any fear. More later.





L.A. Votes to Raise Minimum Wage by 60%

If you follow my website at all, you know I have talked for sometime about the need for wage inflation. But this is a country filled with narrow thinking politicians who struggle to see the big picture. A raise of 60% over 5 years is crippling to small businesses. I am appalled by this move in LA.

I will also tell you about the resources from Labor Law Compliance Center, which offers employers the most advanced HR solutions and customized systems for ongoing compliance in the industry.

I agree wholeheartedly that these companies need to be pushed to raise wages if they are not ethical enough to do so on their own but a sense of reason is in order. Let's raise everyone's mortgage/rent by 60% over the next 5 years. No? Why not? Oh yeah, IT'S CRIPPLING!

Walmart & McDonalds can and should afford it, but smaller companies will be destroyed by this. It's too much too fast. Based on the following video from Time, if at it's peak, $10.75 in 2014 dollars is enough to buy a basket full of a week's groceries, why does min wage now need to go to $15? Wouldn't $12 be reasonable? With maybe a plan to go to $15 in the following 5 years?? But you know, instead let's cripple companies so that half the workforce will get laid off - then when half the people are homeless and the other half are making $15 an hour we can feel good about wage equality. NOT!

Here is the article from Time with the video about wage and inflation.


@BTFDtv Video show with Special guest Ryan Mallory of @Shareplanner $SPY $WWAV $GPRO $SGEN $MA

Thank you to Ryan Mallory of Shareplanner.com for joining me today on this comprehensive discussion of current market conditions.


"As January Goes, So Goes The Year".....occasionaly $SPY

I have heard this saying a lot in recent weeks. It's funny because I don't remember hearing it quite so often before. "As January goes, so goes the year." I questioned this saying and pointed out to an esteemed colleague that January of 2014 was down but the year was up. His response to me was that there are occasional exceptions but that if I were to look at the historical data, I would see that it works. So I did!

Here is what I found going back to 2000. Feel free to scroll to the bottom for the results.

In 2000, January was down and the year was down.  

In 2001, January was up but the year was down. 

In 2002, January was up but the year was down.

In 2003, January was down but the year was up.

In 2004 January was up and so was the year.

In 2005, January was down but the year was up.

In 2006, January was up and so was the year.

In 2007, January was up but the year was down.

In 2008, January was down and so was the year. (But well...duh!)

In 2009, January was down but the year was up.

In 2010, January was down but the year was up.

In 2011, January was up but the year was down. (Although so slightly that I would be more likely to consider it a flat year.)

In 2012, January was up and so was the year.

In 2013, January was up and so was the year.

In 2014, January was down but the year was up.

Out of the last 15 years it has worked only 6 times. That's not very good historic odds in my opinion. So much for that theory.



We Love Drama But Drama Doesn't Love Traders

There is a lot of drama going on in the trading blog-sphere today. Ted Turner once coined the phrase, "we love drama" and how true it is. For those who delve in the drama of interblog politics, readers are rapt with attention.

Poppycock is all I have to say. I have no interest in attracting trolls and haters. I am happy to just share my work and coach serious traders. But all that drama did inspire me to write about something that you all may find of interest.


One thing I often discuss is how most strategies work with discipline but the discipline is virtually impossible until we learn to cut the emotions from our work. While our emotions protect us in life and allow us to stay safe, they have the opposite affect in trading. Those emotions  often cause traders to abandon their strategy in the name of fear and are more likely to lead to high risk trading. They bring out the gambler in us.

Cowboys and gunslingers bragging on the nets about how to make that big score are preying on the naivete of nubile traders looking to get rich quick. This lack of risk averse strategy that allows the trader to keep emotions at bay usually leads to bigger losses.

The key to being profitable as a trader is to take small losses and bigger winnings. Don't be a gunslinger. Keeping risk ratios in check keeps the odds in one's favor. Accepting that every big win comes with a small loss, will help to keep your emotions in check.






The Morning Report - Who's Afraid of Janet? $SPY

Markets continued beautifully yesterday as each major index continued to set-up JHook patterns and closed above respective 8 EMAs.

But all I hear from retail traders is a fear of Janet Yellen's decision today regarding interest rate hikes and the great "tapeer." Prophecies can be self-fulfilling, but it would surprise me if Janet suddenly changed her dovish tone. My port is fairly light coming into this at less than 40% invested and I will continue to manage it from there. Here is the SPY chart followed by a video reminder of tapeer tantrum behavior.




Summer Bear Suit by Request $SPY $IWM

The market continues to go sideways and I am neither bearish or bullish here as we have neither lost support or held onto highs. Even the $IWM is basing out at a support level after losing the break of its down trend. And the divergence between overbought in SPY and oversold in IWM is more divergent than we are accustomed to seeing so mixed signals prevail and I remind myself that cash IS a position and delays cost less than losses.

That said, I have had many requests to see my summer bear suits and although I am not ready to wear them to dinner, I am happy to try them on.




Personal Day $SPY

I'm taking a personal day and will set hard stops on my positions. With futures opening significantly lower, I would not be adding to longs anyhow. Watch the 8 ema to see if it can be recaptured today. Stay safe out there.


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