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2006 and 2007 were the best of times, and, sometimes, the worst of times for my psyche.

It was at the end of 2006 that I became more convinced that it was time to start finding shorts. The Dow was at 12,500. CNBC was just on fire each day pumping the market, too.

Larry Kudlow was nightly touting “goldilocks”. Jim Cramer had called “the bottom” in housing. Fast Money still had Dylan Ratigan, Jeff Macke, Eric Bolling, and, Tim

Strazzini to offer an alternate take on the cheerleading - if ever so mainstream in their efforts.

And, then there was me.

I began to tell my members about stocks like DXD and QID. I began to tell folks to LITERALLY get out of the market. Just get out.

Now, because I’m a trader at heart, there will always be a trade UP or down in any market. And, I made those calls. I always make those calls.

My “macro” thesis was aimed at those who considered themselves “buy and hold,” “investors.” My dad, my father-in-law, and, my friend Chuck, qualified for that group.

It’s tightrope you have to walk as a stock picker. On one hand you want to offer the best macro advice you can for folks who don’t want to worry about getting “the top” or “the bottom.” On the other hand, you want to get “the top” or “the bottom” if you can. Because, the truth is that - and this is the TRUTH - people that call themselves “investors” or “swing traders” are liars. They want daytrade-esque, surgically-precise entries, AND, they want that “long term” “don’t fight the tape” money, too. If you - as a stock picker - cannot give them the day trade entry, and, they miss a move 0r have to stop/out for a loss, they revert back to being an “investor” and claim that, “you can’t time the market.”

Get those entries and exits timed right, and, even the longtermiest of long-term “investors” will sing from the rooftops of your wizardry.

Get it wrong, and, folks who used to end their emails with, “God bless you and your family!” send missives peppered with, “You’re worse than Cramer,” and, “You’re and idiot,” and, well, the always-acceptable, “You suck.”

At “Dow 13000″ in April of 2007, I turned absolutely bearish. I normally don’t ascribe the terms “bull” or “bear” to what I do, but, I admit that at “Dow 13000″ I drank the bear kool aid 100%.

Something magical happened. Like a bell sounded at the start of a market from the ether. As if the gates of stock-picking shangrila opened to the sound of a cherubic chorus of angels.

It began.

I did not see it at the time. The angelic choir sounded more like Dante’s minions with axes to grind for their time down below”: Flames burst open my inbox daily from “Dow 13000″ to “Dow 14000″ to “Dow 13000″ again.

The closer to “Dow 14000,” the higher the flames danced. The bigger the intraday move, more potty-mouthed and bitter the emails.

It is historic fact that I missed the rally from 13000 to 14000 on the Dow. It is historic fact that I was wrong wrong wrong about any entry at Dow 13000 to short the market. Do not read past this point without an acknowledgment that I fully admit my miss of that last 1000 points.

Oh, but, how right was I when I did my video called, “The Great Crash of 2007″ where I called for a Dow correction 8500? Or, my video at “Dow 9500″ calling for people to get ready to buy stocks again last September? (A video I both learned to love and hate! We’ll get back to that in a moment.)

All those “long term” investors who wanted the “day trade” entries from me back in 2007 and ignored the macro call, were now flaming me again. This time for my call that was early (by one day, mind you) as a time to buy again in 2008.

Now, herein lies admission number two about a “miss” of mine: Last year when I did my “bottom” video in September, I said that it was about to be time to buy and that the bottom would not be more than 10% below 8700. This was at “Dow 9400″.

And, the next day the market tanked.

And, you have no idea - NO IDEA - the level of flaming I took for that. The nuts were out in force after that video. Like they had stored up all their collective crank-job energy and directed at me.

The next day I did a video called, “Day 1 of Buying Opportunities Galore”. You can watch it here: http://www.youtube.com/watch?v=j3S18_bQe70

The heat I took was excruciating. Remember, Jim Cramer had just panicked on the Today Show with his half-ass “take out what you need for the next five years” sob-story.

And, here I come out telling people - no, not “telling,” that’s not a strong enough word - I laid my professional reputation on the line with my video called, “Day 1 of Buying Opportunities Galore”.

BUYING OPPORTUNITIES. Not just any, mind. The opportunities were, GALORE.

Oh, if I could only have you read my emails from that time. If you could only you read the messages at YouTube. The phone calls were fun, too.

And that, dear reader, is where I first heard the angels sing. Every jab from a mocking troll emboldened me that I was right.

Right, indeed. Flat-out one of my best, most kick-ass calls ever. The next morning I listed 13 Dow stocks to load up on. Those stocks made 30%+ moves in just a day or so.

The crank jobs, nuts, and, flaming trolls? Well, they continued to burn down the house. My members? They saw me stand up, turn into the wind, and, spit a mouth of gold.

I found something out about myself. I discovered that I am pretty good at macro calls. I’m pretty good at entries for short term trades. I’m pretty good at the combination of the two.

But, my best calls come when they are confirmed by what I now dub, “The Crank Job Indicator”: When the charts, logic, and, my interpretation of them are on one side, and, the other side is handled by anonymous flamers who spend most their emails on my teeth, overalls, or, resemblance to Chris Elliott, then, I know I will be proven correct.

It’s not that I’m right - that is, if you define “right” as naming the day. No, I think you can see that I admit my “wrongness” about my call at “Dow 13000″ and at “Dow 9400″.

What I claim, though, is that when I take a position, that position is proven right in direct proportion to the heat I receive for my opinion. And, right now, the heat is pretty darn hot.

“The Crank Job Indicator” is peaking out right about now.

That tells me that my belief it is time to short the market will be borne out. I believe we will see “Dow 8500″ at the LEAST. And, I suggest people find vehicles like SRS, FAZ, and, TZA to take part in that move. I like shorts like CHS, FUQI, NTES, and, BBBY.

Do I have “the top” in either the market or these stocks? No way. I’m sure I’ll have to admit I missed it somewhere down the road. Hey, let me get that out of the way: I don’t have the top.

But, if you disagree, please keep the emails coming. The more I get the happier I am that I’ve made my call. And, I can only hope we hit that magical 10,000 on the Dow.

The angels will sing on that day.

Wednesday, August 12, 2009

Remember, you can still get August and September
in my live trading room for only $99.99. Go to:
http://augustspecial.joindh.com

I can tell you the exact days I knew the “dot com” bubble was going to burst. There are three events that told me it was time to fade the “internet is going to cure cancer so you better load up for the long term on stocks like HorseAuction.com” story.

CNBC had a “special report” on Pets.com. Seems they were bringing in truck loads of flying fish to be shipped out to customers around the world.

…and, yes, I did a double-take.

FLYING FISH?

Talk about “jumping the shark.” I kind of figured the demand for “flying fish” was on the low side, and, maybe if Pets.com was stocked up on that nonsense, they might (call me crazy) have some other less-than-profitable “pets” in warehouses somewhere.

Then, there was the report from the “CEO” of Furniture.com who said they had a problem. Small problem he said. Small, but, hard to solve: Seemed that the cost of shipping furniture was more than the cost of the actual furniture they tried to sell.

“That can’t be good for the ol’ bottom line”, I thought.

And, the moment of zen: Juno.com made a public announcement that their business model was to GIVE AWAY INTERNET ACCESS. That’s right, FREE internet access.

My partner looked at me and said, “Hey, their stock just jumped about 80 points today. Maybe we should start giving our services away free, too.”

We chuckled. Oh, how we laughed. And, then, cried for the knuckleheads who were loading the boat on those idiotic stories.

“Tulips, indeed,” I opined.

I wrote commentary that, for example, Amazon was WORTHLESS and headed for ZERO. This was as Amazon made the move from $30 to $7.

Talk about being right. I could not have been more right. In fact, there are people to this day that will tell you I was a prophet. My calls to sell the market in 2000 and in 2007 helped propel me from just a “guy on the internet” to “guy on the internet with a few people who made money on his calls and continue to support his efforts to provide more good calls.”

Okay, so, that about sums it up. I mean, I’ve been so right, for so long. What a genius I am.

Oh, wait. Did I forget something? Yeah, I did.

Whoops.

I forgot the part about me in 2000 and 2001 being right about the market and yet following some of the dumbest trading strategies ever devised. Some of you will smile at this.

I bought long term options (leaps) on tech stocks. I bought them on margin. I then sold short term calls against these leaps.

…pause…

…more of a pause as you let that soak in…

…and, now, the punchline…

So, at a time when my call was so very, very right, my strategy was very, very wrong.

Eight years later, and, I’ve learned. Learned myself something fierce. That’s what happens if you lose 2/3 of your money doing stupid stuff that you knew better than to do and let a golden opportunity pass you by while those around you profit wildly off your advice.

That was then. This, my friend, is NOW.

And, NOW, means no margined, optioned, zany “strategy” to make a fast buck. It’s all about small positions. As little margin as possible (read: how about none?) There will be no calls from my accountant saying things like, “Dude, if you don’t clear out you won’t be able to cover your taxes this year.”

I know there may be a few of you that read this and smile. You smile that smile of “knowing.” You’ve been there. You’ve done that. You’ve got the scars to prove you’ve been in the battle.

Others may think, though, that it “can’t happen” to you. And, you will be proven wrong. Horribly, terribly wrong, if you persist in whatever nutty strategy, “black box” strategy, or, “triple dog doo margin” trading.

What works can be summed up with the following rules: 1) Small positions, 2) Follow the charts, 3) Know ahead of time when you will sell on the way up or down, and, 3) Be liquid more than you are in the market.

Yeah, that sounds easy. That sounds like some kind of pablum. I know. I know. Believe me, I know.

And, their are also still people stupid enough to smoke cigarettes when the packs come with a warning that says if you smoke it’s gonna kill you.

So, my tale should be seen as instructive and cautionary. But, the best part is…

…and, this is good…

I’m right about the market again. It’s a great time to sell. The story about “goldilocks,” “the consumer,” “economic nirvana,” “green shoots,” and, the “new bull market,” are all hyped, ginned-up, and, garbage. The way to play them is to keep finding ways to fade them.

Difference is, if I’m wrong, I’ll be able to pay my taxes this year.
Sincerely,
Don Harrold

Remember, you can still get August and September
in my live trading room for only $99.99. Go to:
http://augustspecial.joindh.com

The lesson of this most recent sell-off in silver. Why did it occur? And what should you learn from it?

Was there any obvious real world developments in actual silver supply and demand fundamentals that caused the price to decline? Not from anything I‘ve observed. Investor demand for real metal remained strong for every measurable category from strong ETF flows and record coin production and sales, to dramatic COMEX warehouse withdrawals, to continued disruptions in silver production and refining. Industrial consumption, admittedly weak, didn’t suddenly plunge anew in the last few weeks.

The explanation for the sell-off was the same as it ever was - price rigging on the COMEX. The big commercial shorts engineered the market lower to force leveraged longs on margin to sell, in order for the big shorts to buy back futures and other derivatives. Once again, the derivatives market tail wagged the real world price of silver dog. The good news is that the concentrated short position, while still large and manipulative, appears to be just about as low as it’s going to get, after this recent sell-off and the engineered decline over the past 8 months.

OK, if that’s the answer to why silver sold off, what’s the lesson? The lesson is that you must approach silver in such a way that you are not a victim of the manipulators. Buy for cash, don’t borrow or go on margin. You can’t prevent silver from dropping due to these rigged sell-offs, but you can prevent your silver from being taken away from you by forced margin call selling.

There’s a simple decision that every silver investor must make. You must decide whether you believe that the price of silver is manipulated or if it is functioning as a free market. This may sound weird at first, but if you decide that silver is not manipulated in price, but is trading free from control, you shouldn’t buy it or continue to hold it as an investment, in my opinion.

That’s because if you believe that the price of silver is free from an active downward manipulation, you must believe it is priced in accordance with everything you see around you. You must believe that consistent record demand for an item should result in sharply lower prices. You must be comfortable with delays and rising premiums being compatible with lower prices. You must be able to disregard documented proof of an unprecedented concentrated short position as unconvincing, and regulator stalling and double-talk as reassuring. You must see something I don’t see.

Instead, if you do see manipulation permeating the silver market, that is the best reason for buying. If you see manipulation, you see an artificially depressed price, a price screaming to be bought. If you see manipulation, you see a condition that can’t last, that must end. If you see manipulation, then everything makes sense about silver’s price history and circumstances. If you see manipulation, you know the usual commentary about silver is nonsense. If you see manipulation, you can understand the sharp sell-offs. If you see manipulation, you know it will end explosively to the upside.

Like the Madoff ponzi scam that lasted 13 years and 12 investigations, the termination of controls on the price of silver will be something we look back upon and marvel over how long it existed. Just make sure you are looking back while holding as much real silver as you can.

Visit Jeremie’s YouTube Channel Here: http://www.youtube.com/user/davincij15

Unwaveringly upbeat despite all the suspicion, Barack Obama and British Prime Minister Gordon Brown planned that Thursday’s momentous G-20 economic session might manufacture a serious all-inclusive understanding to grapple with the intensifying global economic decline. Others don’t see it that way.

France warned on Wednesday that neither it nor Germany would agree to unsound accommodations that moderate a need for rugged financial policies in order to hinder wrongdoings that created the lengthening chaos.

But, beyond the carefully written assemblies, dissenters broke windows on banks, and, bombarded the police with fruit and vegetables.

The stock market’s first-quarter rally slowed a bit when the Obama administration spurned turnaround plans from General Motors and The Chrysler Corporation. That story provided the stock market an economic wakeup call and hammered the Dow Jones Industrial average.

The Dow, Nasdaq, and, S&P 500 plummeted nearly 3% Monday, including the Dow Jone Average, that declined almost 254 points, all the same, ended the session above its low. Stocks in the financial sector weighed down on the stock market amid concerns that relies might demand more liquidity injections.

Despair with reference to a car manufacturer bankruptcy have been looming over the stock market over the last few months. The additional news, which took into account the removal of GM’s Chief executive officer Rick Wagoner, made Wall Street very much more troubled not just in regard to the auto industry, but the economy as a whole. And, pundits commented the draw-down, which started with a 148-point market plunge in Wall Street Friday, was not surprising after the stock market skyrocketed 21 percent over just ten trading days.

LEARN TO TRADE OPTIONS WITH NEIL BATHO:
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People email me with comments like, “Don, why don’t you do a video about how we are all getting screwed by Obama’s socialist agenda? He’s added trillions to the deficit in only his first 60 days in office. You need to tell people about this.”

Some people email to say, “Don, there’s a video going around that shows how this (insert coming month of your choice) there will be a (insert calamity of your choice). You need to warn people!”

Can you imagine the kind of things people send?

To which I reply: Why would I do those videos?

I tried to do something BEFORE we found ourselves where we stand, now. I begged people in 2006, 2007, and, 2008 to PLEASE:

1) Sell or short the market from “Dow 13,000″ to “Dow 14,000″.

2) Buy gold and silver.

3) Get out of debt as soon as you can.

4) Stop watching the liars in the mainstream who all have a stake in whether you are “in the market”.

5) Learn to trade and increase your wealth incrementally in all market environments.

6) Be liquid more often than not.

7) Get out of debt as fast as you can. (Such a good idea, I must say it again!)

None of the things I argued people should do depended on who the President was, what the makeup of Congress was, whether or not the federal reserve were “good guys” (thanks for that one, Jim Cramer!), or, what the next financial disaster would be. My comments were - I thought - common sense.

You know, like, “When a market is at a top for the day, week, month, quarter, year, decade, century, and, uh, forever, you are at the ‘high’ in the ‘buy low, sell high’ equation.”

Or, “Look at the charts. Every time the fed starts to cut rates, the market gets hammered. Every time the fed raises rates, the market goes straight up. If the fed starts to cut rates, the market will be destroyed. Maybe down to ‘Dow 8,500′.”

And, “When Goldman Sachs comes out and says that it’s time to buy oil at $150 a barrel because it’s going to $200, and, every chart in the world shows that oil is overbought and about to hammer people, and, every analyst on TV is shouting ‘you gotta buy oil’ (Fast Money, Mad Money, CNBC’s entire network), you gotta short that thing.”

Bet, you forgot my call to BUY THE DOLLAR and SHORT THE EURO in MARCH 2008.

But, this is not about my great calls. It’s about the response to them.

I was laughed at. I was mocked. I read comments about how I dressed like, looked like, or, was a: redneck, hillbilly, nobody, “Jim Cramer wannabee,” etc.

A few folks took heed. For them, I am happy. Most, laughed as they lost money, time, and, most importantly, freedom.

My own dad and father-in-law scoffed openly to me. I begged both to buy gold and silver in 2005. I begged my dad not to buy real estate in 2006. I begged my father-in-law to sell his stocks at “Dow 14,000″.

And, the chuckling drowned out my pleas.

Speaking of freedom, I hear people now worried about what the Obama administration has “planned” for us all. The odd thing is, the people who worry about Obama are - get this - the same ones who LOVED George Bush, the Patriot Act, and, excused the handouts Republicans gave to the banks and brokers last year as “necessary, under the circumstances.”

Yet, it’s those same Republicans who now freak out at the thought that the Obama administration will actually use - gasp - all those “tools” created by the Bush administration.

Well, some people warned about this happening 8 years ago.

And, those people who warned were mocked, scoffed-at, and, called “conspiracy nuts”.

Are the stories about the Obama administration’s “plans” true? Who knows. I mean, if you listen to Rush Limbaugh, Obama will destroy America. If you listen to every single Obama supporter I’ve spoken with, Obama is the “one,” the “answer,” the “chosen one.”

Polarization has not been this strong since any time I can recall. Clinton polarized with his personal life, Bush polarized with his policies, Obama, though, seems to polarize with his BEING.

And, now that it’s the Obama administration, right-wingers are all beside themselves with fear, worry, and, anger. The “conservative” crowd can’t believe what’s happened to our budget deficit in the last 60 days.

As if what happened in the prior 6 months did not happen. As if the largest increase in our A) deficit, B) size of government, and, C) trade imbalances, did not happen since George Bush took office in 200. As if, Bush’s former Treasury Secretary, Henry Paulson did not receive the ability to take as much of our money as he wanted (and now, Tim Geithner) and do with it as he pleased…

…which includes literally handing money to foreign banks, brokers, and, fatcats on Wall Street.

AS IF THEY DID NOT ALREADY PRINT, HAND OUT, and, GIVE AWAY MORE MONEY IN THE SIX MONTHS PRIOR TO OBAMA TAKING OFFICE THAN HAD BEEN DISTRIBUTED SINCE OUR COUNTRY BEGAN.

While, your kids, grandkids, (etc) will be saddled with all that debt.

And, wait, let me get this straight, I’m supposed to be upset about Barack Obama? What in the world? Why?

Why would I be upset about Barack Obama? He is just doing what he said he’d do. At least I knew what we would get with Obama. There’s nothing to be upset about. Barack Obama just does what he told us he’d do: Spend, spend, spend.

As for Geithner: What do you expect from the man who engineered most of what’s happened to our economy? He was at the federal reserve prior to his stint with the Treasury, before that, the IMF. And, even earlier, the Council on Foreign Relations.

So, why would I be surprised that Geithner blames US for “what happened”? He said today, “We came through a period where people borrowed too much and we let our financial system take on much too much risk… And, the consequences of those choices, made over years, were a huge boom. And that boom, the air is now coming out of that and that’s causing enormous damage.”

Left out of Geithner’s position is the fact that the reason for all that “borrowing” was that the federal reserve dropped interest rates to their lowest rates in history (until Bernanke got a hold of things last year). That interest rate drop under Greenspan was championed by none other than, Timothy Geithner, your current Treasury Secretary.

The man who now holds the keys to your money.

Why in the world would I be surprised?

Geithner also said today, ” “the market will not solve this” while disclosing a bailout fund for battered banks has $135 billion left and might need more.

Does it surprise me that Geithner’s answer is to give the government more control? To blame the people for “the problem?” Should I be surprised that “the market” is blamed, when, in fact, “the market” simply acted on the “leadership” of the federal reserve (Tim Geithner, etc), Goldman Sachs, er, The Treasury Department, and, the past 16 years of policies handed down under Clinton and Bush?

No.

I acknowledge that it happens. I accept that it happens. I understand why it happens. This is what happens to a country run by banks, not on a sound-money standard, and, with a fiat-currency (read: printing presses that run non-stop to “liquify” markets).

Yet, the time to be “upset” was in 2006, 2007, and, 2008. The time for worry was before all this “news”. The time for preparation was years ago.

Which, ironically, is when I tried to, well, you know.

That was when the laughter, tales of goldilocks, and, “economic nirvana,” filled the halls of every brokerage firm in America. While Americans filled the aisles of Home Depot and Wal-Mart and spent all that “wealth” they’d “created” when they refinanced the house they lived in (yet was - and still is - owned by the banks, who, now own their house, and, have their money, too.)

If you want to watch videos about how “evil” Obama or his administration is, head on over to YouTube. (I’m not convinced that Obama is any more or less “evil” than any other President. He just does what he says he’d do: Spend. That’s kind of rare, I suppose. A President who does what he says he’d do.) If you want to find out how much of your money flows down the drains now, there are plenty of channels on YouTube that outline all that for you.

But, please don’t waste your time or mine with an email explaining how “evil” and “terrible” Obama, Geithner, or, anyone in this administration “is.” If I want to find that “information”, I’ll do as I suggested you do: I’ll head over to YouTube and get my fill of that “information”.

I do not like where we are with our economy. I am not happy about the situation we find ourselves in with congress. I do not believe that the Obama administration holds “the answer” to any of this.

Those opinions of mine, though, are based on my desire for fiscal and social forethought. Ideas which were posited by me over the last 20 years.

So, no, I have no plans to do videos about the Obama administration, Geithner, or, their “plans” outside of my continual quest to help you: Get out of debt, increase your wealth incrementally through smart trading, and, prepare as best you can for whatever comes our way.

If you get out of debt, increase your wealth incrementally, trade smart, and, prepare yourself and family for whatever may come your way, you’ll find an interesting truth:

The President, Treasury Secretary, and, federal reserve’s actions will worry you in direct proportion to your debt, wealth, and, preparedness.

Sincerely,
Don Harrold
http://www.donharrold.net

The market’s March surge carried on on Thursday this time, due to unexpectedly good earnings from a few key consumer brands.

High demand with regard to government debt at Tim Geithner’s Treasury Department’s latest auction also supercharged stocks. Wall Street had been uneasy with regard to the government’s power to pay for its economic recovery and financial bailout plans.

The Dr Pepper Snapple Group, ConAgra, and, Best Buy, all produced quarterly net profit that topped modest analyst expectations.

The Dow Jone Average added 174 points Thursday to close at its loftiest peak in virtually 45 days. The Dow has increased by 21 percent since it hit the 12-year bottom on March 9.

Market analysts are fast to remark that a move higher to that extent could fall back overnight, particularly in an unpredictable financial world.

Equities dropped Wednesday after a underachieving sale of U.S. government debt raised worries with reference to how well Washington can raise cash to pay for President Obama’s economic recovery plan.

Wall Street yielded a stunning negative response to a $24 billion auction of 5-year Treasury notes Wednesday, a day after a $40 billion sale of 2-year notes showed strong demand. Treasury prices likewise worsened following the auction.

The uS government is hoisting record-breaking shortfalls in order to take care of a multitude of plans to encourage gross domestic product and support to the country’s discombobulated banking system. Comments that demand for united States government debt is waning may be damaging for equity markets.

The market had been higher earlier in the day on enthusiasm over economic reports showing increased demand for big-ticket manufactured goods and higher sales of new homes. Both readings came in better than forecast.

Obama says it will be impossible to balance the budget if the government can’t lower health care development costs and boost economic growth.

President Barack Obama was responding to Republican naysayers and some congressional analysts who count on deficits of $9.3 trillion over the following decade based on obama’s budget.

The President said he came into a deficit that the Republicans had caused, and pointed out that the Republican Party has neglected to muster up another plan.

The President says if he doesn’t deal with reliance on foreign oil, improve the education system and drive down the price of health care that the economy can’t grow at either his value of 2.6 percent, or the congressional budget analysts’ number of 2.2 percent.

President Barack Obama’s administration aimed squarely at the credit crisis Monday with a program to buy up up to $1 trillion of insecure mortgage paper in an agreement with private investors. Finally, Wall Street approved.

The news, leaked out all day long, filled in huge holes in the Obama administration’s plan to save the financial system and formed what Obama characterized as “one more critical element in our recovery.”

The coordinated effort by the Treasury Department, the Federal Deposit Insurance Corp, and, the Fed depends on a combination of private and public cash, mostly from hedge funds and other institutional investors, to facilitate financial institutions get rid of real estate related securities from their balance sheets that turned out to be strikingly difficult to assess.