Thursday, February 05, 2009


More importantly, tomorrow should provide some VERY good trading opportunities.

We have the job #s, and no matter what they are, I expect us to close the day UP, or at least go green off any gap down. Geitner's "Financial Stability" Plan that is supposed to be unveiled Monday SHOULD get up some short covering and speculative buying.

If you play it, set stops and use proper money management. Probably best scenario is a gap down off the #s which I think should provide a very sweet gap entry.

Next week should be even more interesting. Man, this is some market, we are just completely news driven every day. Anyone says "BOO" and ka-powsa the market reacts jerky herky both ways!

A few people asked me to remark on the mark to market notion, or the notion of getting rid of it.

OK, I am just way too tired to get mega into it, but suffice to say its just another very poor idea. The market MUST be allowed to function independent of NEWS! As long as the movement is related to news as tight as it is now, there is simply no way we can get any kind of lasting rally.

Now, it is definately possible that they could come up with some hair brained fix it idea that actually gets people thinking they have it all figured out. BUT, suffice to say that if that happens it'll just set up one of the greatest shorting opps ever.

I have not set up the TOP TEN SHORTS of 2009 class yet because I need to see what we do here. I don't want to short and then get blown out on crazy news that rallies us, even if I don't think it'll last.

It's kinda funny, every day I get some dude who emails me "DOW 12,000 before 5000!" Hehe, first off I don't see that happening, but secondly- PLEASE LET THAT HAPPEN! PLEASE!

I would almost guarantee that if we went to 12,000 I would make so much money and my clients would make so much money it would be coming out of my buttocks. I would be blowing it out my nose, I would be...ok, enough...hehe.

I am a TRADER< folks. We are not investors! I am not attached to my long term projections! Please let us go DOw 12,000, please please please! That would be SOOOO good for us all. Yummy! Get GS to $250!!! Hehe! (Yes, I still think long term its one of the best shorts out there). Think about this, this is why trading rules.

OK, let's take GS. I've made a TON on GS short. A TON. Have I lost on it on a couple of trades? Sure, absolutely. But, I called GS to $50 when it was $150! It went down on that call $100! Now its back to nearly $100. Great! That just sets up another shorting opp low risk at some point in the not too distant future. I'm not ever taking GS short (the stock) and holding it for extended periods of time, that doesn't happen. Worst case is usually that I would have some puts on a stock like that and I'd make money on the 1st 3 or 4 put trades and then the last move, when the stock has finally bottomed, I will lose on that play. That's what a trader does, he/she takes the trade until it doesn't work anymore, has limited risk and moves on when/if wrong on that final trade. Getting stubborn is a good way to get cracked. I try not to get stubborn, so should you!

I'm long PCLN and BIDU and BAC and FAS and FITB here. Do you think I will hold them for the next 12 months? Of course not. Could I lose on them? ABSOLUTELY! I am wrong at times, believe it or not. So? Then I am wrong and I move on.

YOU have to become STONE, you have to have steel emotions, you have to be willing to wipe a losing trade out of your mind, open yourself up to the next WINNING trade!

Do you know the key to being a VERY RICH trader? It's very simple, and I'll tell you all, but you MUST promise me you will never repeat it, ok? If you do, I'll have to have you arrested, ok? I'll have to gag you and lock you in my basement, ok? :)

OK, here goes, here is the key to being a successful trader -
Ride your winners

Take SMALL losses and move on.

That's it, my friends, that's the key to financial freedom right there!

A lot of the money I've made over the years is simply because I am willing to ride my winners. Far too often I hear how "I got scared so I took a small gain because I didn't want to lose, and I missed the huge move, shoot!"

And, that same trader says of losers "I didn't want to take the loss, I thought it would come back, so I rode it all the way down!"

Remind YOU of anyone? If it does, then you now have the key to being RICH! All you have to do is reverse your pattern(s) and control your emotions. It's simple, but it takes practice and it takes developing a trust of your own instincts. I'm not the only person on earth who has good intuition. I may be better than most as a trader instinctually, but that's also what gives YOU all an edge. Because you get the benefit of my gut! YOU have to develop your own trading plans that work within the context of your trading style and portfolio management. I can not do that for you, that's why its meaningless what my actual trades were or weren't. I tell you guys and gals all the time, the picks themselves are the EASY part! I know some of you don't buy into that, but I am telling you it's a FACT. If you can learn and practice proper money management, if you can PLAN YOUR TRADE AND TRADE YOUR PLAN and STICK TO YOUR PLAN, you should, and I believe you WILL make more money then you can possibly spend.

Don't believe me? OK, tough guy/gal, TRY IT! I dare ya! Go ahead, make my day!

And, then let me know how ya do! I think you will be very pleasantly surprised!



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