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"PRICE REVERSAL DATES" for markets are now posted at least one month, sometimes two months in advance.
"Yes, I do like your articles. You are one of the most intelligent traders."
---L.J., Springfield, MO.
FOR THE SECRETS OF THE UNIVERSE.....
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The purpose of this website is to help serious trader/investors overcome the main problem of investment newsletters - a lack of understanding of time. If more people only went to experienced traders who were sharing their actual trades or past real situations, most newsletters would disappear. The purpose of a good investor advisory is to enhance one's performance, not tout the latest fad mathematical program, black-box trading system or just plain trade recommendations. And enhancing your trading results includes reducing your number of losses, increasing the number of positive trades and especially, more than anything else, letting your profits run to as much a maximum as possible.
THE CURRENCY CALL... A PERFECT CALL
One such trade this advizor heavily promoted in March-April of 2005 was to be bullish on the U.S. Dollar. That trade ran from the 83.00-85.00 level to as high as 93.00 on the Index, in about 8 months time. No in-and-out trading, no using stochastics or Bollinger Bands to "enhance trading profits" and no Elliott Wave subjective analysis (or software determinent). Only since the very powerful 'energy cycle' of the third weekend of December, when I told clients to exist all long equity positions (from 15 months prior), have Gold (all metals), Bonds & Notes and Equities worldwide given evidence of possible reversals. Only very serious traders spend the time and money to cull this information out of the universe of financial markets.
CRUDE OIL -- PERFECT CALL
Another major position trade was to favor the short side of Crude Oil after hitting the $ 56 level, mainly because of a major-, publicized (very rare) recommendation by a major commodities house (Goldman Sachs), for Crude to go to $ 103. Prices sold off sharply, for which my clients thanked me. I had begun to teach that what is obvious is not necessarily so. After prices hit $ 42/bbl., and reversed up, I highly recommended going long at $ 47 with a price projection to the $ 70-71.00 level, no higher - and no lower.
Explaining how Oil trades, in $15 "Bands" which no one has ever seen before, and three sub-bands of $ 5.00 within that over all $ 15 range. Once prices close outside by at least one dollar, you go with the new direction. I've been trading Oil since there was a futures contract, and price plotting it on hand drawn charts since 1980. My collection of historic price data goes back to 1859, the beginning of commercial oil production in America. Watching Crude climb up to $ 70.85 the final week of August was heart-warming as I had projected the "Price Buying Spike" to end August 31st. Highs were to come on "Sept. 1st or 3rd, plus or minus one trading day." The August 31st and Sept. 1st dates were THE HIGHS. Hurricane Katrina made landfall (August 29th) at this time; and every talking head on the planet affirmed sharply higher prices were coming due to reduced oil production and refining. They were wrong!!! It was the exact high in sync with the hurricane storm, ironically, that killed demand more than supply. Exactly one month later, hurricane Rita hit (Sept. 24) and created secondary, lower tops exactly, once again in sync to the storm making landfall. Prices on Crude Oil, Heating Oil and Gasoline topped and collapsed. .......exactly $15 to the $ 56 level!!! Prices bounded off of that magical $ 15 low band, and are now completing what 'appears' to be the right side-shoulder of a massive head-and-shoulders top. It could also be the 'trading range' for some time to come, depending on how the world reacts to being squeezed by the Crude Oil companies.
THE 2004 GIANT BULL GRAIN MARKET -- PERFECT CALL
I don't call all the markets in advance, all the time. But what ones I do call astound and amaze even experienced traders with 20 - 30 year's trading behind them. One which was foreseen easily by yours truly was the late 2003-04 bull run in all the grains, especially Soybeans. Using a base price analysis for projecting the high probability top of either $ 10.40, $ 10.60 or $ 10.80, I was extremely bearish in the 'lowlands of July-August 2003. A mini-top had been set earlier in mid-May 2003, which told me that mid-April of 2004 should be the high. This was one my famous 7.36-yr. cycle for major highs going back to the mid 1960s perfectly. Putting out my projections to my prior seminar attendees, I got high praise when soybeans took off amongst a myriad of statistics and weather scares which are a yearly phenomenon in most grown commodities. Telling a few new contacts at the C.B.O.T. that they should expect a dynamic year for grains got the attention of one of the largest Bean pit traders. Prices proceeded to climb all that winter into spring to reach $ 10.64 and $ 10.63 from mid-March, fluctuated sharply until early May, and then proceeded to collapse sharply some $ 4.00/bu. in just four weeks time, never seen before in the grain pits of Chicago.
Experience - is the essence of all good trading. It is from the actual trades, in various market conditions, that we absorb what has happened to us. Because most people start out with an emotional attachment to their money, they "love the profits" and "hate the losses" they incur. The more I experienced the people in the industry of finance and professional trading, I noted that the really good floor traders and exceptional 'upstairs-' traders, both retail brokers as well as floor members who had graduated out of the pits, didn't have any emotion about their money. Be it their own million dollar account or a $ 100 million pool they were managing, they were totally aloof in all aspects of market positioning. It had become merely a commodity in itself, expanding and contracting depending on their wisdom and judgement. A business! Not a gambling arena!
The major reason I believe this is so important is their attitudes towards trades. They "loved their losses" and "forgot about their profits" the moment they closed themselves out. The reason for this is, they were following a Plan. It was the rules they were following that were of utmost importance. And they almost always knew where they stood financially, had an idea where the current market price was in perspective to the long term charts, and where they thought prices could go to. The single greatest 'character trait' that good traders had was, they didn't touch their core position. Prices tended to trend in a broad direction either up or down, which made them the bulk of their professional income each year. This patience was well rewarded in some years making them multi-millionaires.
Cycles - reviewing the three types of chart histories commonly provided by charting services, now by electronic quote systems - daily-, weekly- and monthly plots, one can see curving patterns that show up from time to time in every market. This is the result of cyclical forces acting on the crowd mentality. Going back over an extended period of time, even hundreds of years, major highs appear at regular intervals, curving patterns sometimes last roughly 10, 20 and even 50+ years. After extended full time research on almost every kind of market that's traded, I've been blessed in discovering most of these cycle lengths and how they apply. Also, energy events are known in advance for the most part, by a review of the times that prior events/reversals of trend occur on. Using age old methds to analyze time factors assocated with the dominant energy forecasting is easily applied to future timeframes that enhance performance in trading. Ot of over 300+ cycles I've catalogued, only cycles, some about 12-15 % are what I consider dominant over the crowd psychology in their behavior patterns. Each year in the last two weeks of December, unlike most males on this planet absorbed in sporting events, I list out all the important energy events for the next twelve months, and yearly projections for my trading plans. Overall, I tend to be about 85-95 % correct in my calls. Some specific industry groups, I have called perfectly. Those 100 %-ers are lots of fun, especially when you see how really bad others are. This year (2005), I out projected Soros, Buffet, Gates and quite a few hedge funds on the currencies. They relied on their advisors and technical indicators. I guess that I'm a more experienced technician in my applied knowledge.
Stops Policy - I do not recommend stop areas or levels unless an active client (a paid consultent) requests it of me. I leave the 'Danger Point' where you or me is wrong up to the individual trader to determine. There are essentially three main approaches in placing stops. Firstly, above- or below the price trading levels that are on the opposite side of the trade you are doing. Secondly, a dollar amount stop to keep bad fills to a set amount as support and resistence vary considerably with each trading situaton. Thirdly, usually as a trailing price level at a moving average (M.A.) determination. Trends are not straight lines but more realistically, shifting bands of support and resistence from the dominant cyclic forces out there. I tend to favor this defensive approach the best. Stock fund managers tend to use 50-t.d. (trading day - t.d.) and 200-t.d. M.A.s as their absolute rule in positions. They are close to what I know as the dominant cycle- and sub-cycles factors, but no cigar.
All in all, the best way to trade is, to KNOW THE FUTURE.
"J, I just went through your website and must say it looks really cool."
---M.S., Palmerton, PA. (Former Cycles Seminar attendee)
"James... Great call on the stock market direction. Couldn't wait for the weekend to be over to see the Monday opening.
You're the best. Enjoying your site. Can't wait to read your next article...." --- JIM, Calgary, Alberta, Canada
"Cool man." ---Arcale Peace, Youngstown, OH.