One Good Trend

Frankly this relentless rally is getting ridiculous. But who are we to complain? We didn’t just happen to nail what I would deem a picture perfect entry but thus far have managed to ride this advance like Jess Lockwood on steroids. Yeeeehaaaaa!!! These are the types of campaigns dreams (and fortunes) are made of and I hope you were wise enough to hop on the bull two weeks ago when I posted this entry.

If that happens to be you then pad yourself on the shoulder and perhaps devote a special toast to your favorite market megalomaniac, which of course ought to be yours truly. While overpaid fat cat hedge fund managers are cowering below their desks after being unable to recognize what was nothing but a good old fashioned trend trading opportunity, we here at Evil Speculator do what we always do: Focus on our charts and bank coin by the book.

And talking about which. This is a snapshot of Ed Seykota, commodity trend trader extraordinaire, with his lovely daughter. He must have had quite a lot of time to prick his banjo as trend trading has been almost dead for the past few years, mostly due volatility producing too much standard deviation during the early entry phases of campaigns. However I remember having a conversation with Scott a few months ago during which we agreed that conditions in the coming year may just favor a return of the mean old trend trading dogs. Thus far it’s starting to look promising!

Gold of course is bound to be launching higher now that it managed to stop me out by a single tick yesterday. I’ve added my pertinent sentiments to the chart.

Fortunately I was a bit luckier on corn – missed that stop run by merely two ticks.

USD/JPY also still survives and there’s currently nothing to be done but wait.

I leave with this:

The Whipsaw Song

You get a whip and I get a saw, honey
You get a whip and I get a saw, babe
You get a whip and I get a saw
One good trend pays for ’em all.
Honey, trader, ba-by mine.

Banjo (Ride Your Winners):
What do we do when we catch a trend, honey … etc.
We ride that trend right to the end.

Mandolin (Cut Your Losses):
What do we do when we show a loss, honey … etc.
We give that dag-gone loss a toss.

Fiddle (Manage Your Risk):
How do we know when our risk is right, honey … etc.
We make a lot of money and we sleep at night.

Guitar (Use Stops):
What do we do when the price breaks through, honey … etc.
Our stops are in so there?s nothing to do.

Bass (Stick to the System):
What do we do when a draw down comes, honey
What do we do when it gets real big, babe
What do we do when it’s even bigger …
We stick to the plan and pull the trigger.

Banjo (File the News):
What do we do with a hot news flash, honey … etc.
We stash that flash right in the trash.