9/16/19

 

After The Fact

 

The reason for the move is revealed after the fact.

 

Now that corn futures (CORN as proxy) have moved below their mid-May lows, contrary to the reality of massive crop losses, the reason for the move is revealed.

 

The video at this link does an excellent job of describing why prices reversed in mid-June, went lower and then lower still.

 

Although it’s not the intent of the video to explain why corn prices have dropped, it’s apparent that storage capacity for grains and other ag crops has been increased (with government help) dramatically since 2004.

 

The shock of a massive failure has, or may be mitigated by the fact there’s ample storage; At least for now.

 

Of course, this is all in the chart and may be the reason ‘commercials’ were going short in late June at near-record levels.  They know their business and their actions were reflected on the tape.


9/12/19

 

Wyckoff Education

 

Here is a link taken from a full course on Wyckoff analysis. 

 

It’s more than just a little interesting that Mr. Bogomazov, with twenty years experience in Wyckoff has as homework (time stamp 14:07)  for his students, the book “Outliers

 

It’s a must read for anyone to understand that proficiency, no matter the industry requires at least 10,000 hours of dedicated effort at the task.

 

I have a colleague where every time we meet, peppers me with market questions.  My response to him is always the same.  ‘If you want to learn about the markets, start losing money’.

 

That’s right.  Start losing money. 

 

I also go on to say, that at least three market accounts should be established, fully funded with a substantial amount … say $50,000 to $100,000.  Each account is only to be traded after the prior account has reached zero.

 

By the time the second account is lost, one should consider very seriously if there has been anything learned and if this (market) profession is well suited to the person trading.

 

This story of losing multiple fortunes is not unique and is just part of the process.  Prechter even adds (paraphrasing) that ‘the first fortune should be lost early in life, so that one has time to recover’.

 

Through all of this, one’s own style or temperament is discovered.  For me and my firm, it’s best suited to strategic positioning and identifying opportunities that have substantial, sustained, long-term upside. 

 

Day trading, options, swing trading are also performed.  However, at this particular juncture and as mentioned previously, we appear to be in a global transition. 

 

The sun and weather, along with its crop failures, food shortages and energy stresses may override any other trend in progress. 

 

In line with that thought, as of this post (11:15 a.m. EST), BTU is up around 2.0% and back into the range identified in yesterday’s update; it appears to be under accumulation.

 

Note:  Obviously, this is not investment advice.


9/10/19

 

Flash:  Nuclear Power, Major Hit

 

This just released report may put serious pressure on nuclear power.  What’s the public sentiment going to be now?

 

Released radioactive water is going to (if not already) find its way to the west coast of the U.S.

 

Want to buy a contaminated beach-front property in California?  I think not.

 

What does that mean for the other sources of energy like nat-gas and coal whose worst offence is to crank out a little sulfur and carbon-dioxide?  


9/6/19

 

How to use SeekingAlpha

 

With over 30,000 followers of BTU on SeekingAlpha, it may not be long before we get a ‘report’ on the latest news announcement.

 

Wyckoff stated in his 1910 treatise and autobiography, that having a sharp pencil and doing the accounting analysis is the easy part.  So, we’ll leave it for SeekingAlpha to do the work and decipher how fundamentals will be affected.

 

This approach follows Wyckoff's tenet to let the army of fundamentalists ply their trade; then, we observe the results of such efforts in price action and respond accordingly.

 

Interpreting price action?  Well, that’s the hard part.

 

A quick review shows many things happening simultaneously for BTU: 

  • We’re at the end of summer; nearing fall and winter
  • Solar minimum; Weather is changing rapidly.  Getting colder, not warmer
  • BTU has lost value since January this year and in position for tax-loss selling
  • Sentiment is at negative extremes:  ‘No room for coal’
  • Australia looks ready to break down (or become third-world) and admit they can’t do it with ‘renewables’
  • BTU is making money and is now at (yesterday’s close) an incredible P/E of 3.91, with regular yield of 3.29% and all payouts (past twelve months) at 14.46%

Penetrating established support puts BTU in spring position.  From an MACD standpoint (daily), it looks like we’ll get a for-real bullish divergence.

 

So, the first attempts to enter at the danger point have been cleared out.  Now, it’s time to monitor how BTU behaves at this latest support-resistance level.


9/4/19

 

Quantified Cold

 

Ice Age Farmer, has just put together a report that quantifies the cold.

 

Put in your local zip code here and look at how much growing degrees have dissipated with respect to last year (2018).

 

Solar minimum is a fact.  For 2019, heat dissipation is a fact.  Increased volcanic activity with high atmospheric ash ejections, while not a (quantified) fact yet, … may become one.

 

The market analysis skills presented on the open forum of this site have pointed us in the direction of coal.  No matter what the media consensus may be, the charts say coal.

 

Natural gas is in there as well but let’s get real.  Take a look at a nat-gas LNG facility (even a floating one) and then look at coal being loaded into rail cars or transport barges.

 

Coal is in the ground.  You dig it up and then burn it:  Simple. 

 

Our overall lives may be about to become much more simple.


8/31/19

 

Money GPS:  Recession Here or Imminent

 

The video at this link has excellent information on where things really stand concerning the economy.

 


8/29/19

 

The Genius of Wyckoff

 

 

We have included links to Mr.Tony Heller that refute the global warming agenda.

 

Now, there are several responses to Heller (one of which is here) that refutes his claims that refute the warming agenda.  Obviously a normal, thinking person would want to know whom to believe.

 

Wyckoff, in his genius says:  It does not matter. 

 

His writings, dating back to the initial issue of “The Ticker”, in 1907, indicate that if the tape is read correctly, one can discern the most probable direction of the market. 

 

His reason is this:  There are tens of thousands, if not hundreds of thousands of analysts, accountants and ‘elites’ that have more information than the ‘tape reader’.

 

Some of them, with massive capital are literally ‘in-the-know’.  They have information that we (non-elite) will never have.  However, their decisions on what to do with their capital must (dark pools notwithstanding) at some point, show up on the tape.

 

For example, on August 26th, at approximately 10:15 a.m. EST, there was a transaction of 38,800 shares of BTU at the price of $17.42; a “block trade”.

 

That amounts to $675,896, nearly three-quarters of a million.  In addition, it’s only one of many block transactions for BTU.

 

Correctly interpreting these transactions and the resultant “print” on the bar chart is the key to determining our own course of action.

 

The important part is there are no claims, and counter-claims to review.  Reading the tape is difficult enough. 

 

As a result of the incessant he-said, she-said concerning the climate agenda, we’re not going to post any more ‘warming’ debunking.  We don’t need this information anyway as part of generating a strategic plan.

 

Note that ‘warming’ is not the same as Solar Minimum.  For that, we have facts such as the number of sun-spots which can be directly observed and without bias.  


8/28/19

 

Early Frost, Freeze Risk Rises

 

 

Food and energy shocks may occur simultaneously


8/19/19

 

Heller Report:  Record Cold

 

The attached link is one more installment from Mr. Heller.  This time it’s record cold he witnessed last year on a trip to Washington D.C.

 

The important part from a trading/investment standpoint, are the wind-turbines; dead calm and frozen solid.  Time stamp: 4:07 – 5.11

 

If the ‘green energy’ does not work at the time it’s needed, it’s worse than useless.  Giving a semblance of functionality where there's none.

 

Time will tell this winter, if we have officially entered the solar minimum for good (potentially lasting 200 – 400 years, depending on data sources … more on that later).

 

If that happens, it could be way too late for the initial, low risk position in the market.  That of course assumes the market(s) will remain in operation and viable (without a derivatives or bank blow-up) on a go-forward basis; not all scenarios can be mitigated. 

 

The objective here is to identify an opportunity (Strategy ... Livermore), use tape reading skills to enter at low risk (Wyckoff) and focus on a specific market or equity that looks to benefit the most (Loeb).

 

Nearly everyone else is focused on the S&P, Fed, gold, bonds and interest rates.  I have found no trading entity or market based website that’s covering the topics presented here.

  

A case in point is Peabody (BTU).  A quick YouTube search turns up nothing recent.  The latest posts are at least three-years old.


 8/16/19

 

Typical Coal Sentiment

 

All comments listed below, are from the just-released Yahoo Finance article at this link. 

  • Coal is only good for steel making and as a backup for power plants. After China, India slowly ease their dependence on coal, this industry will shrink even more. 
  • Coal is dead. Renewable energy is the future. Move on. 
  • Coal is done, [LNG], renewables, green, and other types of energy has replaced coal. Just like coal replaced wood. 
  • Coal? Lol 
  • We should bring back steam engines and paddlewheelers. 
  • coal going, going.....gone 
  • just die off already 

Only one comment had a hint of intelligence; so it received a down-vote from the group: 

  • That’s ok, coal will be needed again soon, this winter will lay bare the reliance on natural gas and renewables. 

Meanwhile, back at the ranch, Peabody Energy (BTU), is quietly moving up from lows of August 7th.


8/13/19

 

Nothing to see here.  Move along.

 

The USDA report released yesterday, August 12th executed its prime function.  Drive the price of corn and wheat lower.

 

YouTube sites such as this one have some of those commenting scratching their heads on how there can be massive crop failures (or up-coming failures) and yet the price of corn and wheat move lower.

 

The markets are self-regulating.  If they’re too many on one side of the trade, the market by its own action will flush those positions out.

 

That’s why it’s important to pay attention to the ‘commercials’ in the commodities markets.  In the corn market, they have been short (expecting a decline) at near record levels.  So we do likewise.  Stay out.

 

As of yesterday, we see exactly why they’re short. 

 

Now, we watch to see if CORN pushes lower and heads for new yearly lows.  Doing so, would flush out nearly every last speculator and give the commercials excellent, low risk opportunity.


8/9/19

Fall is Coming ... Fast

 

"The chances of a cooler fall are drastically increasing":  Time stamp 12:49

 

This detailed and data supported video validates our position in the markets that natural gas is first, then corn.

 

Over the past weeks, nat-gas price action may be changing character right before our eyes.  This morning in the early pre-market, it was a wild ride in the futures.  We may have tested the lows as postulated in this video (from yesterday’s update).

 

My firm could still get stopped out of our position.  Anything can happen.

 

However, the data is pointing to the fact that corn prices may be kept artificially low until the onset of fall.

 

Even then, one would think there'll be significant efforts at manipulation (lower) on a go-forward basis.

 

Rising nat-gas prices would not result in wide-spread public panic.  Sure, it’s more expensive to heat your home but you’ll still be able to buy food … that is, until you’re not.


7/14/19:  Futures Account Re-activate

 

 During the next meltdown, the stock market may close but the commodity market(s) could stay open.

 

The money GPS has speculated and rightly so, during the next downturn, there'll likely be continual market closures as equities (and bonds) successively gap lower session after session.

 

This site has proposed the “50% gap-lower overnight”, scenario many times. 

 

Such behavior on a smaller scale was already exhibited during the 2008 – 2009, collapse but this time external conditions are more severe.

 

The commodity markets could be different.  They are the nuts and bolts of the economy and the nation.

 

Even the ‘elites’ need to eat. 

 

It may be just as well.  If the equities market is closed and the commodity markets remain open, it’s just one more step in separating the average from their wealth and retirement.  The futures markets require a whole other set of skills (on top of trading equities) to navigate.

 

So, it’s probably time to re-activate my firm’s account with TradeStation.  That account has been dormant for some time as it was used during mentorship with David Weis nearly ten years ago.

 

At the time, I was trading primarily gold and silver futures and had signed up (and paid for) a total of ten mentoring sessions with Weis.

 

Somewhere around the seventh or eighth session (held once a week), Weis concluded (paraphrasing) ‘You have a firm grasp on the technicals and good market sense.  There’s nothing more that I can teach you.  Would you mind giving up your remaining (mentoring) sessions to those on my waiting list?’

 

What was I going to say?  That I wanted my money’s worth:  To complete the program?  I had just received the ultimate compliment from the Wyckoff master himself.  I took it as such and relinquished my remaining spot in line ... free of charge.  J

 

I have more to say about the incredible stress experienced when opening, funding and trading a futures account for the fist time in preparation for mentoring.  That will be discussed in a future post.


3/22/19

The Data Is False But The Price Is Right

 

In the Ft. Worth Star Telegram for Wednesday March 20th, Section 12A, is a half-page page article titled:  “Hot records falling twice as often as cold ones”.  The article sites NOAA as its source for temperature data.

 

It's basically a global warming article that attempts to show how temperatures are moving higher at a brisk pace.

 

A quick review of this link (one of many) shows just how NOAA cold “records” are being deleted.  Of course, if the cold data is being erased, then it must be getting warmer, right?

 

This data eradication (or manipulation) is not just confined to one area of government sponsored entities. 

 

Let’s try unemployment numbers.  Real unemployment numbers are here

 

It’s an interesting read on how John Williams got his start on researching the actual (unreported, real) data.  For more info, go to the home page and scroll down to ‘Biographical’ information.

 

So it is with corporate earnings, inflation numbers, GDP, and on.  The good part is that from a Wyckoff analysis perspective, the official numbers are not a factor in deciphering price action. 

 

David Weis published a bond trading article in the early 80s where he discusses the Wyckoff method.  A link to Part 2, of that article is here:  Scroll to the last paragraph for his thoughts on ‘data’.

 

Wyckoff approached the market by asking; what’s the market saying about itself? 

 

Or, as Livermore put it; what is, not what do you think it is.

 

The official narrative is false.  Data is false, statistics are false and numbers are falsified; all to project the intended thought-shaping outcome.

 

The one thing not false is price  

 

The price is right (to borrow the phrase).  Delete all other distractions and focus only on price. 

 

The market itself will give clues to its next move


3/21/19

The Narrative

 

The 900 Days:  Recounting the German siege of Leningrad (St. Petersburg) during WWII.

 

During the years leading up to the assault, launched one day after the summer solstice 1941, the Russians were convinced that any such attack would be quickly repelled and subsequent fighting would not occur on Russian (Soviet) soil.

 

This belief was so entrenched into the psyche of the public as well as the military, that it was incorporated as curricula in the military academies.

 

The military was taught, trained and indoctrinated into a behavior pattern(s) of responding to an attack in a pre-defined way.

 

The results of that belief are well illustrated at this link.

 

So it is with this report.  ‘Inflation will be lower’.  Stating what will be, before it actually happens.  Most likely, massive crop failures and huge spikes in food prices (just one of several potential upsets) for 2019, are not part of the ‘official narrative’.

 

Ignoring these types of alternative data inputs stands to have a similar effect on one’s investments as the Germans had on the Russians.

 

What is the market saying about itself?