NetPicks 2011 Market Outlook Part 4

8/2/2019 NetPicks 2011 Market Outlook Part 4

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NetPicks Market Outlook 2011

Transcript Part 4 of 7

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Next page. So right now what I’m looking at besides what I’m trading now, I’m reallyinterested in trading -- going back to the bonds like and I’m looking at the 377 tick chart.Starting at -- right now, I’m looking at the same time as crude oil around 8:50. Stilltrying to tweak that so I’m foretasting that then I know TJ is looking at something and we

can -- maybe we compare notes and see how we’re doing. But the last couple of days,it’s over a grand in trading one of two contracts, one trail so it’s looking pretty good. I’malso going to be looking at trading the Spyders and the Qs trading options by actuallyputting the options symbol on the chart. And you have to be a TradeStation platformowner to do this and I don’t know if any of these guys out there have tried to do this or not.

But what you do is you follow up 195-minute Q chart, default settings for the SST, andthen you follow up a TradeStation option analysis window and then you linked them.And then -- and also you want -- you want to have another two charts open, one with theactual Qs open and the 195-minute, and then click on “in the money strike price”

typically the front month. I try to go maybe four weeks out and you’ll find that the “inthe money” option will trade almost identical to the 195-minute underlying Q chart. AndI’m using that for actually just trading that symbol using the SST. And if you people outthere that have a -- and I don’t have an example because I don’t -- I didn’t take control but I could have but we’ll be maybe exploring that maybe in the trade room or but it’sreally an interesting way to trade an option symbol just like the underlying vehicle sothat’s something I’m looking at. The problem with that, though, is you can’t back test it.There’s no historical data. So I’m forward testing it now and seeing how that goes.

And also, I’m looking at swing trading, the agriculturals. And that’s something I got onthe back burner but I’m liking what I see and that’s kind of what I’m doing. I don’t have

any big position except for I have one Super Bowl prediction. It’s going to be Green Bayand New England with Super Bowl and Green Bay is going to upset them.

Mark Soberman: You meant Green Bay and the Jets?

Keith McKenzie: I mean no. No, New England.

Mark Soberman: Okay.

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Keith McKenzie: Sorry bud.

Mark Soberman: Yeah, right. Wishful thinking Mark but a couple of questions for you.Anthony is asking, “Is it very difficult to keep to your plan?” So obviously, you got a

variety of different things you’re doing here, is it really difficult to stay with it or stick toit?

Keith McKenzie: No.

Mark Soberman: Good enough. There’s a couple of questions -- that’s the answer -- onwheat, I want to know where the wheat plan is or was? I believe there’s -- isn’t it in thereplay of our annual meeting? Is that right, Brian?

Brian Short: It’s also TJ has it posted in the owner’s club.

Mark Soberman: Okay, the SST owner’s club.

Brian Short: Yes.

Mark Soberman: Okay, great. Let me see what else we have here in the questions. Petesays, “Keith, your wheat plan was up over 75%, why would you drop it to look at otherthings or have you dropped it or what’s that?”

Keith McKenzie: I -- it’s in the bull pen of simplifying things. If you look at what -- youknow, I’m a -- I don’t want to brag or anything like that, but that silver and crude is just --it’s just -- it’s giving me a large percent wins. And by 10:30 comes along I’ll just -- I’mlooking to go on and do other things. So that’s just kind of a way I’ve -- it’s more of justkeeping myself more simple and I think right now two markets. That wheat, it takes a lotof concentration and I’m ready to just keep that in the back burner at the top -- at thestock.

Mark Soberman: Yeah, it’s a good reminder, you know, because a lot of us keep talkingabout how we’re trying to finish this early as possible. It’s exactly how the way I look. Imean I’m just -- I just want to be done. I want to be positive and when we look at peoplewho are struggling, they want to trade four or five or six hours a day so kind of think about that.

Keith McKenzie: Right. That’s -- and it’s almost goes with Will’s minimalist approach.

Mark Soberman: Sure.

Keith McKenzie: And I -- even though I’m -- I have to admit, I’m addicted to tradingand here I am. I’m talking about but you probably see me in the room saying, “Yeah, Idid this. I did that,” and I guess it’s -- there’s nothing wrong with that but because I dohave a plan, I can work it in many times.



Mark Soberman: Great. What exchange -- I can remember wheats, soybeans or is thatSIMI or is that CBOT?

Keith McKenzie: C --

Mark Soberman: CBOT, right?

Keith McKenzie: CBOT.

Mark Soberman: Okay. The next question --

Keith McKenzie: Actually, it’s -- I think it’s all in one now but you have to subscribe tothe CBOT. Yes, you do have to subscribe to the CBOT or you have to get all the -- it’sthe $61.

Mark Soberman: Okay. That will cover the --

Keith McKenzie: The data fee.

Mark Soberman: Great.

Keith McKenzie: That’s --

Mark Soberman: Okay. I surely appreciate that, Keith. So Bob, you are next. Do youneed me to show your slides or do you want me to give you control.

Bob Malinowski: Sure. Why don’t you go ahead and show mine, that’d be easier.

Mark Soberman: Okay. There you go.

Bob Malinowski: Okay. Mark and Brian asked us to you know, make some predictionsand talk about what worked and what didn’t work. And so, I decided just to take a look at CNBC had predicted for the last year because I find these predictions, often times,don’t meet reality. But, you know, just very briefly here, with some of the financialcomponents for say in treasury yields at fall this year and they did. They did fall this yearbut they went back up again. So there is a prediction which you could say was a, youknow, you know, came an apparition or maybe didn’t but, you know, the same treasuryyields for fall for the year 2010. They did. They want back up.

CNBC also predicted that the U.S. dollar would explode higher and it didn’t go up thefirst half of the year but then it went back down during the second half of the year. FastMoney had predicted that gold prices would topple to $900 an ounce. That one justdidn’t happen at all as you see no gold is up around $1,400 an ounce. Stocks would dropby 10% in the first half of 2010. Well, they did. They dropped by about 10.5%. That



was a pretty much a right on prediction from CNBC but then it went up 24% for thesecond half of 2010. They didn’t predict that particular move.

This prediction here, the utilities are best performing sector in the U.S. stock mark -- in2010. Well, utilities are essentially flat for the year and gold stocks which was supposed

to be the worst performing group, actually did quite well as Brian said up, you know,33% for the year. The second half of the year, CNBC predicted that GDP would turn flat.Well, it didn’t turn flat. At the third quarter, we had a 2.6% growth and for the fourthquarter the numbers are not in yet but they’re looking on 2.2% so we’re still looking atsome positive growth.

The next chart, Brian, the last two predictions of CNBC Fast Money had, you just flip tothat next one. The first one -- there we go. I think I have one more chart there.

Mark Soberman: Do you want me to go to the next one here?

Bob Malinowski: Yeah, you can just go to the next.

Mark Soberman: Sorry about that by that.

Bob Malinowski: Yeah. Tiger Woods would make a comeback. They predicted thatthey’d be -- he’ll reconcile with his wife and his popularity would rise to record levelsand sounds like, you know, some stock market predictions. And the final prediction wasa weakened Republican Party in disarray. My only point here is I don’t try to predictanymore. I used to do it. I listen to these pundits all the time. I listen to Mark and Brianand Will and they are much, much more on the mark than any of these fellows that youwill see in the popular financial press or in the financial media.

What I like to do is I like to follow a proven system with an edge and let it tell me whereto place my trade and where to get out and not try to predict. It’s really good to havesome basic ideas like Brian looks at his silver market. You can look at the chart and say,“Look, silver is going up. I’m going to trade silver but I’m only going to take long trades because, you know, we see a trend going up.” The first prediction for the year 2011, Itried to stay out of the prediction and I just let the charts do the talking and I let thesystems with an edge give me that edge. And I’m also onboard with, everyone you’veheard so far this presentation about simplifying. I have traded the UMT, the AT, theHVMM. I love them all. Systems all give a nice positive edge. But, for me, this year,I’m going to be focusing primarily on the SST because I find it easier for all the stressthat is involved in trading to not have too many systems trading at the same time.

So I’m going to be primarily using the SST and I’m going to be diversifying by marketand by time frame. So I’ll be trading the crude oil, the silver and the Russell as far as daytrading futures, do stock and ETF trading with the options that Mike and I have beenputting together with the options live course from 130-minute chart. And then this year,I’m going to do something new for Forex. Most of you I see 70% like to trade Forex. Ihave not really done a whole lot of Forex cash trading. This year I’m going to look at



some swing trades in the Forex market, start looking at some of those Forex marketswhere I could do some swing trading.

Again, trading where I’ve got an option to take my time in these setups and not be sittingin front of the computer all day long. And so that’s my goal for the year, simplify, focus

on SST, diversify by market and timeframe, and let the charts do the talking. And that’smy summary.

Mark Soberman: Great. Thanks, Bob. We appreciate that. So next up we have Shane.So Shane are you all set? Do you want me to hand it off to you?

Shane Daly: ______ [0:56:49]. Well, if you just want to do the charts like thePowerPoint for me.

Mark Soberman: Here we go.

Shane Daly: Do you have the PowerPoint that I have there?

Mark Soberman: Give me a second and I’ll --

Shane Daly: Sure.

Mark Soberman: -- move up here real quick. I kind of have a lot of these cut and pastedin, so let me pull yours up real quick.

Shane Daly: Okay. If it’s easier doing that way or you just want to hand it off, whateveris easier, faster.

Mark Soberman: I’ll tell you in about 15 seconds. Let me see here. Okay, 2011 PPThere we go. Okay.

Shane Daly: That’s mine. And while Mark is doing that, I’ll set for me. Let me tell youright now, I’m on the same boat as everybody else, you know, minimalist trading, youknow, going back over last year and making things easier for myself. You know, we allget into trading, you know, for our own reasons but one of the reasons I did was -- Iwanted more free time. You know, I don’t want to be glued in front of the monitor.

And so this year is something I’m looking a little bit different and I’m sur e that mymarket outlook and I don’t have one much like everybody else. I just -- there’s so manyvariables that go into having an outlook. And as Bob just showed you, most of the timesthey’re wrong and, you know for me, I’m a situational-type trader. You know, the chartsare going to show you what’s out there. Your strategy is going to show you what’s outthere. You stick to your rules, right? That’s what we have control over as traders and --yeah, I’m not smart enough to decide for all the fundamentals of the world, I’m just not.



I went to college. Took Economics like these guys when I was in college course and I just read the books and I actually left because they weren’t teaching anything you canread in a textbook. And we can see, you know, it doesn’t matter what you predict. Itdoesn’t matter what you think. All you need is one word from someone like TimothyGeithner and the market plunges. We saw it happened, you know, 400 points the market

falls.

You know, so hanging your hat on your predictions is, my own opinion, is not a smartway to go and nevertheless, you know, we all have this thing inside of us that we don’twant to be wrong, right? So how many times have you held on to or believe aboutsomething you’re being proven wrong but you don’t want to, you know, admit it. Andwe all have that at times so we just, you know, just something as simple as not getting outof a trade when you should have a long time ago. So I understood what works for me.I’ll get a little more into that in a minute. And I think my positions have shown up andwith my proper risk percentage. I’m not going to be afraid to get out when the trade isnot working, right? That where my control lies.

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NetPicks 2011 Market Outlook Part 4

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