AMBG Trading

You Are Part Of The Herd

2011-09-07T13:39:00.000-07:00

I have a philosophy about life that everyone I meet has something to teach me. From the panhandler to the successful entrepreneur it doesn't matter - I know they all possess a drop of wisdom I can take forward and apply in my life. The panhandler may teach me to be more generous. The successful entrepreneur may teach me about the importance of investing in oneself.

However, sometimes people teach me what NOT to do.

This afternoon someone I follow on my Twitter feed (@Xiphos_Trading) posted the following:

"Obama's $300B in jobs is an election stunt. He's had 3.5 years to create jobs and has proved he doesn't have a clue how to."

While I could focus on the political aspect of his comment that is not where my focus was when I replied saying:

"You're a maniac if you believe any single president could."

My point is that this type of thinking is typical of the masses (i.e. the herd). That is, those who give politicians far more power than they actually deserve. Do you honestly believe a single politician has the power to create millions of jobs for an entire nation?

Continue to bitch and whine and you will succumb to the reality that you ARE the herd. You belong to that group of people who are followers and not leaders.

Your responsibility in this world is to create a future for yourself and your loved ones. Many democratic countries were born (in part) out of this premise - that from nothing one can create everything.

Dismiss the politics that are going on these days. Your life does not depend on the outcomes of an election, nor whether Obama can create jobs. If you don't have a job then go out and find one! "There aren't any out there", you say? You aren't looking hard enough. This world is more abundant that we will ever know. There is an infinite amount of resources, jobs, money, etc. It's our task to tap into that abundance. This requires that you separate yourself from the herd (and herd thinking, complaining, etc).

Guys like Rick (@Xiphos_Trading) are part of the herd. Yes, Rick. You are part of the herd.

Managing Expectations

2011-07-07T09:21:00.000-07:00

I continue to beat home the idea of accepting/understanding the risks involved in your trading strategy.

Here is follow-up video to the Freedom system presentation which you can find HERE:

Poker vs. Trading

2011-03-26T12:57:00.000-07:00

This is an absolutely brilliant video contrasting the game of poker versus trading. I have watched this video 3 times and can't get enough at how eloquently he emphasizes the importance of risk management and how it relates to one's success in any game of chance.

1st Developmental Series Video!

2011-03-22T17:02:00.000-07:00

My previous post mentioned that one of the big projects I have in mind going forward is to put together a series of developmental videos that will cover an array of trading topics with one goal in mind:

That they are instructive, but practical enough that you can incorporate them into your trading.

You can find future recordings by clicking on the "Developmental Series" tab at the top of the blog. Enjoy!

Without further ado here is the first recording!

Get Ready! More Updates to Come!

2011-03-16T18:41:00.000-07:00

I've been on 'blog-hiatus' for quite some time but I'm excited to announce that the blog will be far more active going forward.

On the list of things to come (or are that already here!)

New forecasts
Leasing of ES futures position trading system
Video Developmental series
Much, much more...

Anatomy of a Bad Trade

2011-02-22T18:21:00.000-08:00

Uncle Point

2011-02-17T12:37:00.001-08:00

Is this what you want to see Mr. Market?

A Tale of Two Fractals

2011-01-07T13:12:00.001-08:00

Today's intraday ES futures action:

The SPX's March 2009 climax bottom:

Still Here - 2011 Here I Come!!

2010-12-21T07:54:00.000-08:00

For those of you still dropping by the blog I would like to inform you that postings will resume in the New Year. In addition to my trading I have been busy with personal issues (wedding, a move, etc) which has kept me occupied, and away, from this blog for far too long.

In 2011 my hope is to bring a new and fresh format to the blog along with various products including:

Forecast subscriptions on various markets (Gold, Silver, ES Futures, etc)
Leasing of position trading system on the ES futures contract

Several years ago my dream was to trade full time and now that I have realized that dream I want to give back and help those who also dream of financial independence. It is for this reason I want to maintain the blog and provide the aforementioned services.

Stay tuned and Happy Holidays to you and your family!

Best Regards,
Alexander Grant
AMBG Trading

In Light Of This Tape...Unwind

2010-09-15T12:17:00.000-07:00

Love on 9/11

2010-09-11T09:15:00.000-07:00

It's early Saturday morning and as I sit here with my coffee and laptop in hand it's difficult to not remember what happened 9 years ago this day. Rather than retell what I experienced almost a decade ago, instead I want to comment on the level of suffering and anger (I believe) many people still feel to this day, and how this suffering/anger has in many ways prevented us as a population to move forward and reconcile our differences.

Let's be honest. A microscopically small group of terrible people have attracted the attention of virtually the entire planet and will do so on every September 11th for decades to come. If part of the grieving process is to forgive then why do so many people wash themselves in hatred and suffering every anniversary of this terrible event?

For the record I did not a lose a loved (thankfully) in the 9/11 attacks and I cannot fathom what a family must go through if they did. I am no way trying to be insensitive to those families but I will not sit idly basking in that hatred and suffering alongside those people. If that means turning off the news every 9/11, hugging a loved one or telling my fiance I love her then I will do so.

"Change begins at home" as they say and today I am doing my part to heal the planet of this suffering and hatred many people feel every year.

To end this commentary, I want to say that I love family, I love my fiance, I love my friends, I love my clients and I also love myself.

1930s Fractal

2010-08-30T14:30:00.000-07:00

Below are the charts I comment about in the video....enjoy!

Dow Industrials 1929 - 1930

Dow Industrials 2007 - 2010

Warning From Tony Robbins ( and PTJ)

2010-08-27T09:35:00.000-07:00

The trader he mentors is Paul Tudor Jones.

Heed his advice. The words coming out of his mouth are very likely the words coming out of Paul Tudor Jones' mouth - likely the greatest trader living today. A trading icon.

Heed his advice.

EDIT: I want to add that I'm not trying to suggest the markets are going to crash. I simply want to stress that the possibility is greater now (just as Robbins says). For all I know this could be the mother of all contrarian indicators - and believe me I'm thinking it could - but it makes sense at this juncture to remain open to all possibilities.

CONFIRMED Hindenburg Omen

2010-08-19T13:34:00.000-07:00

CONFIRMED Hindenburg Omen!

As per Wikipedia...

1.- Check!

2.- Check!

3.- Check!

4.- Check! (113 / 70 = 1.61)

Bond....James Bond

2010-08-16T18:20:00.000-07:00

I put together a video describing my thoughts on the bond market....

Hindenburg Omen Update

2010-08-15T15:04:00.001-07:00

I am flabbergasted at the amount of attention my recent YouTube video on the Hindenburg Omen received. Its prompted me to record a follow-up....enjoy.

Stock Market Crash?

2010-08-12T14:43:00.000-07:00

Not just a possibility after today....

NOTE: I recorded a 2nd video today (August 13, 2010) describing what the VIX futures are saying about the possibility of a move between now and September expiration. Enjoy!

Also, take a look at the following document care of Dr. Robert McHugh over at Main Line Investors, Inc. (https://www.technicalindicatorindex.com/) regarding the statistics on the Hindenburg Omen.

The Hind en Burg Omen Oct 2007 Guest Article Jan 2008

Don't Be Lazy

2010-07-26T11:05:00.000-07:00

Realized Volatility Example #2

2010-07-16T07:19:00.000-07:00

I recorded the video when the ES was trading 1076-ish. The projection of ES 1072.75 was pretty darn close to the bottom.

Example: Using Realized Volatility

2010-07-15T08:03:00.001-07:00

Another Dead Tape

2010-07-13T21:56:00.000-07:00

Politicians Who Think They Are More Powerful Than Markets

2010-06-10T10:52:00.000-07:00

Why do politicians believe that markets are wrong???

For hundreds, if not, thousands of years the markets have been more right than any market analyst/forecaster or politician will ever be.

Un-be-lie-va-ble!

Talking About Everything

2010-06-09T21:14:00.000-07:00

I put together a video that talks about a number of issues in the market including oil/interest rate cycles, breadth, and yes....the possibility of ALL TIME HIGHS in stocks!

Enjoy!

Top In Oil?

2010-05-18T17:56:00.001-07:00

I have shown the following chart on numerous occasions that clearly displays both a:

10-year price cycle in spot oil (blue rectangles)
3-year correlation cycle (green rectangles)

Daily Spot Oil (Blue = Decennial cycle; Green = 3-year correlation cycle)

As it stands now, it seems like we may have put in a significant top in oil for at least the next year or two - assuming the cycles are correct.

What's more interesting, however, is the correlation cycle. While the 100-week correlation of spot oil to the SPX cash index is quite strong (0.90), I expect to see it slowly diminish into the end of 2010 or the beginning of 2011 at which point a BIG, BIG move in stocks is going to begin (most likely in early 2011).

So, if you believe that oil has made a significant top and will continue downwards for the next several years, AND you believe in the unwinding of the correlation versus the SPX cash index, it clearly suggests that stocks rally or at least hold up for the 5-7 years.

Interesting, isn't it? As an investor I think this is very interesting.

CHANGE IN TREND

At the risk of overstating the obvious, there is a clearly change in trend in the markets as defined by a very simple moving average cross over system that I implement to guide my own investing decisions. The system in question is the 13/34 EMA crossover on the COMPQ which typically precedes the market.

Daily COMPQ 13/34 EMA Crossover

No need to predict the markets - just follow them.

Another important crossover that has triggered to the downside is the ever-so-popular 10/30 SMA crossover.

Daily SPX 10/30 SMA Crossover

BREADTH

Breadth-wise, as measured by the McClellan oscillator, we are approaching levels that typically indicate a short/medium term bottom so keep this in mind. Also, keep in the back of your mind the possibility of a some positive divergence in this indicator which is a very reliable set up to go long.

McClellan Oscillator

FORECAST

I am only offering the forecast as a very-low-fee subscription service due to the amount of work that is required to put the updates together.

If you are interested in receiving (or trying out) these updates, you can learn all about the forecast HERE.

Here is a chart of how it has performed over the past two months....even I'm impressed!

Daily SPX Forecast

Fresh Start

2010-05-16T16:53:00.000-07:00

I'm finally back from my month-long holiday and I cannot begin to tell you how much I needed it. As most of you can appreciate, when you stare at the markets 6.5 hours a day, 252 days a year you tend to drive yourself a little crazy after a while.

All in all the trip was fantastic and I urge you all to consider visiting South America. Many of you have likely traveled to Europe but I can assure you that while there are many European influences in Latin America, the culture has a zest of its own that cannot be matched.

Here is a video I recorded of my girlfriend and I in the Atacama desert. We took a private 4x4 tour that I highly recommend if you visit the region (ask for Atacama Connections tour office).

Here are some pictures....

Chilean government building - La Moneda

Having dinner in Santiago, Chile (drinking Pisco sours!)

Eating a seafood empanada

At the beach in La Serena, Chile

Small car we rented for the day in La Serena, Chile

In the Atacama desert

On a giant salt flat in the Atacama desert

A beautiful salt lake in the Atacama desert

Me trying to pose for a picture on the mother of all rocks

Arden and I

Breathtaking scenery in the Atacama desert

At the Chile/Argentina border in the province of Jujuy (very windy!)

View of our hotel (La Comarca) in Purmamarca, Argentina

View from restaurant at La Comarca hotel (Purmamarca, Argentina)

Nice photo of white wine with a meat empanada

My first beer after being sick (we were at 5,000m in Atacama)

In a corn crop with cousins at my uncle's ranch just outside Buenos Aires

Arden and I sitting on horses at uncle's ranch

Cousin standing on horse at uncle's ranch (he's a phenomenal horse rider)

Arden and I taking in a tango show in Buenos Aires

OK, enough of that...let's get to the markets!!

MR. MARKET, WHERE SHALL THOU GO? DOES IT EVEN MATTER?

It took me about a week to finally get back into the 'groove' of the market. It's interesting, however, how I traded after having been 99% isolated from what was occurring in the markets. I found that I was clearly looking at a different market, yet, the market itself had not really changed. What had changed was the way I was perceiving and reacting to it.

Very interesting wouldn't you say?

My time away gave me an opportunity to critically think about (pay attention here!) what the market is to me. Not what the market is, but what the market is to me. They are two entirely different things.

We all too often get emotionally involved (either consciously or subconsciously) in the notion that one must know where prices are headed in order to succeed in the markets, and I suppose to some extent that is true. But in actual fact it is almost irrelevant (this is coming from someone who uses a forecast as his primary trading tool.)

The reason most of us, at some level, think the markets should be predictable in order to succeed comes from our conditioning. We (humans) don't appreciate and enjoy the uncertainty of life as much as we should. We've been conditioned to value the known, the facts, the certainty. I guess that's why trading is so hard because it requires one to recondition the brain to be OK with not knowing.

What is the market to me?

It's a giant video game that has a primary rule:

IF YOU TRADE IN THE OPPOSITE DIRECTION OF THE TREND, YOU LOSE MONEY. OTHERWISE, YOU MAKE MONEY.

Conversely,

IF YOU TRADE IN THE DIRECTION OF THE TREND, YOU MAKE MONEY. OTHERWISE, YOU LOSE MONEY.

Trading in and of itself is simple. Not easy, but simple.

What's simple is to trade with the trend. What's not easy is to change your opinion on the spin of a dime when it is appropriate to do so. Even the best of traders have been caught offside at some point during the 2008 - 2010.

TREND

The trend of the market is clearly down at the moment whether you are a bull or a bear, and will remain so until it's not (as overly simplistic as that sounds.)

The 150 and 200-day daily SMAs are excellent targets over the next few days/weeks. Clearly, any break of the 200-SMA and you will see some panic selling.

SPX Cash Index (daily)

Keep in mind, however, that if we do break the daily 200-day SMA that the bull run can stay intact. There are a plethora of historical examples when the markets seemed to have changed their longer term trend by dipping below the 200-day SMA, only to reverse their march higher.

BAD BREADTH

By all accounts, breadth has been absolutely terrible and it's very discouraging for the bulls that we have seen FIVE 9-to-1 negative down days in a span of a month. Not good.

Negative Breadth

All in all, I continue to be bearish until (a) stocks stabilize or (b) we move up on good volume/breadth.

I'll have more on the markets over the next few days. I have a lot to talk about and don't want to put it all in one post.