'Trading is a process of observing the market's action until such a time you can find and form trading ideas and get involved.'**

Friday, November 4, 2011

 

The C=L U=M Principle

Most people like to stay within a range of relative comfort; a range that is self imposed. This is known as your comfort zone. For most of us, the grand majority of our experiences and daily life’s routines are within the limits of what we already know; the boundaries that we set, the fence that we build around us to feel safe.

We tend to ignore the outer limits of this circle of comfort almost all of the time. The unknown is a scary proposition for most. The CLUM principle simply states that COMFORTABLE = LESS OPPORTUNITY AND UNCOMFORTABLE = MORE OPPORTUNITY; C=L U=M

The simple fact is: opportunity is in the areas that few are willing to venture. In the circle of humanity, you’re part of the circle. And, in order for you to take advantage of inefficiencies in the so-called system, you must go outside the system. You must, at some point, be a lone wolf. This requires you to be a little different than the “norm.”

You will need to go beyond what you know the outcome is going to be. That’s right; you need take some risks and go outside your comfort zone. It won’t be easy, because most people will tell you you’re crazy or it can’t be done. However, you will likely notice that most of the people who try to discourage you are usually not very successful and the ones that encourage you are generally the more successful people.

Now if you want to be successful and achieve your dreams, this will require a new way of thinking that entertains the idea that we have a much greater capacity for living, for accomplishment and enjoyment; that we can enjoy things that may seem unenjoyable at first glance. And, that we have the capacity to stretch our comfort zone to new limits and dimensions.

When you stretch your comfort zone to a new limit, it never returns back to its old dimension; it becomes your new comfort zone, ready to challenge you to go beyond its limits or walls once again.

Like a game of golf; you’ll never shoot a perfect game of eighteen holes in one. However, you keep trying to improve and stretch your game to new limits and the game is always challenging.

Whenever you hit a limit, whenever you hit a wall or you feel nervous or scared in the face of a challenge or a new idea, view these situations or experiences in life as the chances that you’re given to succeed and reach your true potential. These are the times that you could look back on and say “that was my big break” or “that was when I should have done x”. It’s your choice.

These moments happen all through your life and give you a multitude of great opportunities to accomplish and to achieve your desires if you’re willing to take the risk of going beyond what you already know and try new things. It’s at those specific moments that you are asked to go beyond your limits and stretch your thinking that will, in the long run, define your success.

So, next time you’re faced with a tough decision or a challenge, look at it from a new perspective; tell yourself that this is one of those great moments that life is offering me; a chance to be all that I can be. This is one of the great gifts of life; the natural call to arms. It may not always work out, but these are the moments that offer you the opportunity to be different than most; to be a winner.

Mark Minervini

Volatility Will “Crush the Stock Market” Says Ben Stein

In no particular order Ben Stein has been a speechwriter for Presidents Ford and Nixon, an actor, the host of "Win Ben Stein's Money," an economist, a columnist specializing in corporate fraud for Barron's, a novelist, a screenwriter, a trial lawyer, a poverty lawyer, a professor, and this guy. The man is a walking bucket list.

His latest book is "What Would Ben Stein Do?" Breakout being a financial show, I started asking him what he would do with his money. Specifically, what would Ben Stein do if he were 30 years old and trying to build a nest-egg in a world where stocks have been dead money for as long as anyone can remember and there's a growing sense that the financial world is rigged in favor of Big Money?

"If I were 30 I'd put a third in short-term Treasuries, very short-term," he tells me in a voice I can only describe as Ben Stein-ish. "Then I'd put two-thirds in the broadest possible index, which would be the VTI, the Vanguard Total World Stock Market Index (VTI) and I'd just add to it every month, even when people were in deep fear."

Buy and hold?!? Dollar cost averaging? Dump more money into this ticking time bomb of a financial system? Stein is ready and more than able to debate every point of the erosion of the global economy, but his trump card for owning equities is simple: "There's no alternative." No, gold bugs, he doesn't think being long commodities is a long-term solution, either. He's actually terrified of gold.


Noting that investors who bought gold as long ago as 1978 would still be "licking their wounds" on an inflation-adjusted basis, Stein says it'll likely be the Chinese who pull the rug out from under gold this time. If and when the Chinese realize hoarding the barbaric metal has been a mistake "that will be the end for gold."

So we're back to stocks as the only place for real savings but it's hard to be very happy about it. I've spent most of my adult life in the markets and even I find it disturbingly frenetic lately. I frankly can't understand why anyone who didn't already have money to spare would be comfortable buying and holding an asset as volatile as equities.

Stein doesn't entirely disagree, saying volatility "is going to crush the stock market as a vehicle of investment for the ordinary citizen... at least for a while." Regardless, he still thinks investors are stuck with equities if they want real returns.

That being the case, Stein would spread his portfolio of stocks "across asset classes, geographically, industries, sectors; the broadest possible diversification." He'd try to minimize his correlation to any specific market and put away 10% of his gross wages every month. "Tithing for yourself," if you will. The goal is self-reliance in your old age, and as Stein sees it, the stakes couldn't be higher.

"Human beings are not that nice," says Ben Stein. "You don't want to have to rely upon them for survival in your old age. You want to rely on money. Money is sometimes cruel, sometimes nice, but don't try to rely on people. Rely on what you've got saved up."
The market (YM) tumbled today due to European concerns and as the usual Friday profit taking day.

Stock index futures point to mixed start

 
On Friday November 4, 2011, 6:41 am EDT

NEW YORK (Reuters) - Stock index futures pointed to a mixed open on Wall Street, with futures for the S&P 500 flat, Dow Jones futures up 0.1 percent and Nasdaq 100 futures down 0.2 percent at 1008 GMT (6:08 a.m. EDT).

The main focus will be on U.S. non-farm payrolls, the latest piece of data to show how the United States is growing, with private employers expected to add 120,000 jobs last month, while the unemployment rate is seen unchanged at 9.1 percent.

Corporate news is another focus, insurer American International Group third-quarter results missed expectations following an impairment charge in its aircraft leasing unit.

Starbucks Corp's quarterly profit beat expectations following strong global sales at cafes.

Acquisition news will also be in the spotlight, a sale is expected to be agreed by the end of the weekend of MF Global's operations in Asia and Australia after the provisional liquidator for the brokerage's Hong Kong received nearly 40 credible offers.

Separately, MF Global may have temporarily slashed the debt it was carrying before publicly reporting its finances each quarter, disguising its debt levels to investors, according to an analysis by the Wall Street Journal.

PepsiCo Inc beverage subsidiary in China is being sold in China to an unlisted unit of instant noodle and drinks maker Tingyi Holdings Corp, a source with direct knowledge of the matter said.

Groupon Inc has raised $700 million in an initial public offering, making it the largest IPO by an Internet company since Google in 2004.

Banks will also be in the spotlight, the Wall Street Journal reported, citing people familiar with the matter, that the Bank of New York Mellon Corp is in talks with federal prosecutors over a currency lawsuit which accuses the bank of overcharging clients.

The White House said U.S. banks exposure to the euro zone crisis is modest and the United States can cope if the region's debt crisis grows worse as worries intensify about Greece.

European shares rose on Friday on hopes a proposed referendum in Greece on a new bailout package which could threaten its membership in the euros would be avoided, easing concerns about a Greek default.

U.S. stocks rallied on Thursday, also on hopes the referendum would be called off, with the Dow Jones industrial average was up 1.8 percent, the Standard & Poor's 500 Index gained 1.9 percent and the Nasdaq Composite Index rose 2.2 percent.
The market (YM) is on the idle level at this time from the Globex market as shown from this 5-min. chart.

A Friday profit taking trading today.

It might trade on the sideways as far I can sense unless there is a positive/favorable news out there that will send the market to the bullish trend.

Let's see how it goes in the regular open.

Thursday, November 3, 2011

The market (YM) made a nice smooth ride after it pulled back at 10:00 am. ET for a big 200 points.

Trade Summary

Showing the 1-min. chart from the DIA etf (similar to YM Futures) the entry and exit trade.

The market made a nice pull back when it gap up in the open and made a nice setup from the pullback.