Big Bad Bear

Learn more about the most powerful stock market system, The Beanieville System:
here and, more comprehensively, here (with several major posts you can go through).



Karl Denninger's 2009 Predictions below. Suddenly bears are great market timers, after many decades?


* The economy will not recover in 2009. Job loss will continue through the year and unemployment will reach 8% in the "headline" statistic by the end of the year. U-6 (broad unemployment, or the closest to "real" unemployment without government "cooking") will top 15%. All the "talking heads" are predicting a turnaround in the second half of 2009. They will be wrong. Look at their records for 2008 - all of them were predicting closes at or above 1500 for the S&P 500. Why does CNBC continue to put people on the air who, if you listened to them, cost you 40% or more of your money?
* Deflation, not inflation, will become evident well beyond housing. Other capital goods beyond housing will see real price declines for the first time since the 1930s. Debt is inherently deflationary; the "hyperinflationists" will once again be shown to be wrong (how many years running will it be now?)
* Housing prices will continue to decline. I believe we're about halfway done with the price correction. Those who think we will turn this in 2009 are wrong - unless we get an all-on collapse in prices in early 2009, which I do not believe will occur. I've heard several claims we will have positive year-over-year home price changes in 2009. I'll take the other side of that bet.
* The Fed's attempt to "pump liquidity" will be shown to be an abject failure. We will see either a Treasury Market selloff or worse, severe instability in the dollar at some point in 2009.
* GDP will post a 12-month negative number and there is a decent shot that we will actually see an official depression print before the end of 2009, defined as a 10% decline peak-to-trough.
* The Stock Market has not bottomed although you may think it has for a few months. The annual range will be quite extreme; I would not be surprised at all to see 1,000 touched on the SPX in the first part of the year. I believe the SPX will at least touch 500 in the next 12-24 months and the current bottom will not hold. It is possible that we could see a crash to SPX 300 and DOW 3,000 some time this year, probably after the spring (when the "Obama Halo" wears off - if it isn't blown off by economic events first.) Yes, this means I am predicting a fifty percent swing in the SPX in 2009. Lots of money to be made as a trader if you're quick and good, but an absolute minefield if you're a long-term investor.
* Precious metals will not be a safe haven. The callers for $1600 and above on gold will be wrong, unless there is a major military conflict. I do not rate that probability as particularly high, but it is an event (along with a major terrorism incident - nuclear or biochemical - that would cause a rocket shot in Gold prices), so I am hedging that call. The risk of this sort of "response" to the economic crisis is, however, real, and will rise significantly going into 2010 and beyond. We'll revisit this one (a major war) next year.
* The Dollar will not collapse. This is not because we're in great shape or will truly recover, it is because the rest of the world is in worse shape than we are. Last year pundits were all calling for the dollar to collapse to 40 - it didn't happen. Now they're calling the dollar's strength a "Bear market rally." Nonsense; the simple truth is that while we're in bad shape the rest of the world is literally on the precipice of a full-on collapse. European banks are more-levered and less-transparent than our banks as just one example.
* The pound or euro - and perhaps both - will likely be where the FX dislocation initiates if it occurs. I see the potential for the pound and euro to both reach par with the dollar, although I'm not going to go that far out on the tree limb and predict it - yet. Needless to say that would rocket the Dollar Index but it won't be our strength that does it - it will be their weakness.
* The US Consumer will go from a negative savings rate to a seriously-positive one. I am predicting 4% in 2009 but it could go as high as 10%. The math on this is simple - the "consumerist legion of more" has run its course and all that's left is debt. It hurts and bad; expecting the American Consumer to cut off his other arm is just plain dumb. By the way this is a good thing in the longer term for America once the excess debt is forced out and defaulted through the system.
* Commercial Real Estate will effectively collapse and most commercial Real Estate REITs will be either insolvent or limping on life support. There will be calls for bailouts (which may be attempted; the calls are already starting to be heard) but it won't matter - a failed business is a failed business, bailout or no, and overcapacity must go away before sustainable business conditions can return.
* Along with the above, expect 10% of all retail stores to close, and that number could go as high as 20%. That's not going to be fun; there will be hundreds of malls that wind up literally shuttered across America. Stay away from most retailers and property groups as investments. Firms like SPG and VNO are levitating on the strength of their dividends (7-10% yields at present); I believe this is a sucker play; if retailer defaults force dividend cuts (and I believe they will) the commercial REITs will go straight into the toilet.
* Several states will get in serious financial trouble and outright default of one or more is possible in 2009. California leads this parade. But even if there is a default on a state basis, the effect will be highly localized, as county and municipal governments vary in their wisdom and budget process. The real pain comes in state-wide social and educational programs. Be very careful if you are in municipal bonds or thinking of getting back into them (I recommended they be dumped in 2007 - look at what has happened to the closed-end funds in 08! Aieeee!) as the default risk is VERY REAL. If you're buying individual issues and do the work to determine not only the risk of default but also the likely recovery if they do default there are some good deals out there - but only if you're doing the work. "Trust me" (as in buying funds, whether mutual funds or closed-end stuff) is very dangerous.
* Mortgages are not done. The story last year was "Subprime." This year's will be "ALT-A", "Option ARMs" and so-called "Prime". The Fed and Treasury know this, which is why they are playing games with "agency" debt in a desperate attempt to clear this market before the ticking nuclear devices go off. The amount of debt involved in these "bad deals" is vastly higher than that in the "subprime" space and if they fail to contain it (a near certainty) Round #2 of severe bank instability gets served up on us in the second half of 2009.
* If you want to refinance a mortgage you may get one brief shot at it with long rates around 4%. You're nuts to buy outright unless you intend to die in the home, but if you have a solid reason to be obtaining a mortgage or wish to refinance you will probably get the opportunity. This assumes the "buydown game" gets going before Treasuries dislocate; if you get the opportunity take it as it is likely to be fleeting. The few places in this country where homes wind up selling for 2.5x incomes (on average) and you have an opportunity to finance at 4% and change will be decent buying opportunities - if you're sure you can cash flow the note (e.g. your job and/or income stream is not in any danger of collapsing.)
* Those who have said that the corporate bond market is being "unreasonable" in its expectation for defaults will start to look like the jackasses they are. Actual default rates (not projections) on non-investment-grade debt will skyrocket starting in 2009 and there will be no sign of it turning around this year. If you're playing in this area of the market thinking that "the worst is behind us", I hope you like walking around bald as the haircuts handed out to folks like you will be especially severe and delivered with a straight razor.
* The calls for "more lending" to consumers and businesses will go exactly nowhere. The problem isn't credit availability - there's plenty of money available to lend if you are credit-worthy. Those who are being turned down now simply aren't credit-worthy when one looks at what they want to do with the money and what they're backing their repayment capacity with. The more "credit stimulus" is thrown into the economy (and there will be more) the worse the downturn will get.
* General Motors and Chrysler will fail to meet their targets and it will be labor that sinks the deal. At least one and probably both will wind up in some form of bankruptcy in 2009. The UAW is insane; Gettlefinger needs to be strung up by his genitals and pelted with rotten tomatoes by his union "brothers", and if they had a lick of sense they'd have already done it. They obviously don't. I give this mess six months tops, with Ford as the only possible survivor. The recent GMAC games show exactly how desperate they are; 0% 5 year loans to people with 620 FICO scores are flat-out insane and the default rates on those loans are going to wind up in economics textbooks five years hence.
* Protectionism and currency manipulation will rear their ugly heads in 2009, originating not here but in Asia as their economies go straight into the toilet. China and Japan are at severe risk here.
* Commodities will appear to be headed for a new bull market but this will turn out to be a false hope as demand continues to collapse. Attempts to manage oil output to prop up the price will fail. Several oil-producing nations will find themselves in serious economic trouble, with Russia being in the lead but by no means alone.
* Sovereign debt defaults will number at least three with many other nations on "watch" for same; we had one last year (Iceland.) Noise about a US "AAA" downgrade will continue. Highest on the list for probables are Russia, which needs oil at roughly double its current price - and stable - to be financially viable. Not going to happen in the near term.
* China will have its first large-scale rumbling of civil unrest as a consequence of collapsing export demand and thus employment. They'll manage to tamp it down - this year. Don't take a bet on that holding together longer-term. Those who think China will be "ok" are deluded; they have a horrifying overcapacity problem (debt-financed, of course) and there is no way for them to get out of it. They are truly going to "take it in both holes" down the road, but the worst of it won't be in 2009 - that is still a year or two in the future.
* Foreign uptake of Treasuries will be choked off - by necessity. It won't be because they want to screw the US (although they should have a long time ago, given our profligate and unsustainable habits), it will be because they will be forced to redirect their resources inward as their own economies collapse.
* "The City" (London to be precise, Britain generally) will be recognized as getting it "worse than we are" (in America.) This will be the first of many validations of my thesis "we're screwed, they're gang-raped."
* Things will get "revolting" in a number of nations. Not here in America. Yet. If we're lucky the American Sheep will wake up and stage some of that peaceful protest stuff I outlined above. If we're not so fortunate 2010 could be really bad.

Let's Hear It From The Bears

I'm generally optimistic of a recovery in 2009. But it's always a good idea to hear from the other side - the enemies.

Individuals, companies or cities with heavy debt and shrinking revenues instinctively know that they must reduce spending, tighten their belts, pay down debt and live within their means. But it is axiomatic in Keynesianism that national governments can create and sustain economic activity by injecting printed money into the financial system. In their view, absent the stimuli of the New Deal and World War II, the Depression would never have ended.

On a gut level, we have a hard time with this concept. There is a vague sense of smoke and mirrors, of something being magically created out of nothing. But economics, we are told, is complicated.

It would be irresponsible in the extreme for an individual to forestall a personal recession by taking out newer, bigger loans when the old loans can't be repaid. However, this is precisely what we are planning on a national level.

I believe these ideas hold sway largely because they promise happy, pain-free solutions. They are the economic equivalent of miracle weight-loss programs that require no dieting or exercise. The theories permit economists to claim mystic wisdom, governments to pretend that they have the power to dispel hardship with the whir of a printing press, and voters to believe that they can have recovery without sacrifice.

As a follower of the Austrian School of economics I believe that market forces apply equally to people and nations. The problems we face collectively are no different from those we face individually. Belt tightening is required by all, including government.

Governments cannot create but merely redirect. When the government spends, the money has to come from somewhere. If the government doesn't have a surplus, then it must come from taxes. If taxes don't go up, then it must come from increased borrowing. If lenders won't lend, then it must come from the printing press, which is where all these bailouts are headed. But each additional dollar printed diminishes the value those already in circulation. Something cannot be effortlessly created from nothing.

Similarly, any jobs or other economic activity created by public-sector expansion merely comes at the expense of jobs lost in the private sector. And if the government chooses to save inefficient jobs in select private industries, more efficient jobs will be lost in others. As more factors of production come under government control, the more inefficient our entire economy becomes. Inefficiency lowers productivity, stifles competitiveness and lowers living standards.

If we look at government market interventions through this pragmatic lens, what can we expect from the coming avalanche of federal activism?

By borrowing more than it can ever pay back, the government will guarantee higher inflation for years to come, thereby diminishing the value of all that Americans have saved and acquired. For now the inflationary tide is being held back by the countervailing pressures of bursting asset bubbles in real estate and stocks, forced liquidations in commodities, and troubled retailers slashing prices to unload excess inventory. But when the dust settles, trillions of new dollars will remain, chasing a diminished supply of goods. We will be left with 1970s-style stagflation, only with a much sharper contraction and significantly higher inflation.

The good news is that economics is not all that complicated. The bad news is that our economy is broken and there is nothing the government can do to fix it. However, the free market does have a cure: it's called a recession, and it's not fun, easy or quick. But if we put our faith in the power of government to make the pain go away, we will live with the consequences for generations.

Mr. Peter Schiff is president of Euro Pacific Capital and author of "The Little Book of Bull Moves in Bear Markets"

We will gap down , based on SPY closing price of 90.24

We could sell off hard on Friday.

Bought SPY

@ 89.7

Infested With Bear Talk

I know we've all been hearing all kinds of horror stories from the bear of bears about how focked our economy is and that the USA will meet its comeuppance. We're at the brink of unmitigated disaster. We're supposedly the next Rome extinction.

It isn't as bad as the gloom and doom sayers say we are. I hear predictions of Dow 4000, Dow 2500 and Dow 0. Geez louise, we get these kinds of similar predictions in EVERY bear market. While we may be going through a tough recession that might last some time, it isn't the end of the world. Who knows, we may actually be near the tail end of the whole mess, as the market typically looks 6-9 months into the future. We may get one more leg down but I think that will be the end of it.

We need to start looking into what the next bull market will look like and who will lead it. Who will be the next Google or Microsoft within the next 5-10 years. I believe all the ingredients are now in place for an alternative energy bull market once we come out of this recession. Specifically, I think solars will be red hot and I believe they will spawn whole new industries, much like what the chips have done. Call me a dreamer, but I'm holding tight to FSLR, ENER and SPWRA.

Stay away from margin, buy the leaders, trade the Beanieville Way, and you will be ready when the solar revolution comes at you like a freight train.

Thank You For The Kind Words

I've gotten lots of emails as a result of the previous post, most asking me to continue on to do what I do. Some are new readers and have very kind words.

I have thought about this for awhile before making the decision. I don't ever want to live a life of regrets...I have a chance to spend as much time with my daughter as possible so I better use that opportunity. As you know, you only have one chance and one life to live. Once the moments pass by, you can never turn back time.

Who knows, maybe once my daughter grows older and goes to school, I might revisit "active" blogging. :)

My New Year's Resolution

It has been several years now since I first started blogging and it has been a great experience, and I still enjoy doing it as well as reading other people's blogs. I cherish those moments - communicating and sharing ideas with people who live a world apart. However, very soon I will no longer be interacting with any of you in the form of daily comments whether it be answering questions or talking to myself (lol) on my blog or posting comments on other blogs. While I liked every bit of it, from posting my trading thoughts on my blog throughout the day to irritating the easily irritable traders on other blogs, you and I know eventually I gotta move on. I'm 37 years old now and my two year old daughter is growing up fast. She is my pride and joy and I cherish her everyday. I want to spend as much time with her as possible whenever I get a chance to. Posting comments, while fun, can be time consuming. Since my daytrading bread and butter are mostly the morning fades and the Beanieville Overnite Daytrades, I will be leaving my computer more often and taking my daughter to places she enjoys. Even though I am very afraid of flying, I will also be looking into traveling more.

I'm a keen observer of the tape, at least I would like to think I am. I'm always trying to look for patterns in the charts that seem to frequently repeat themselves. That's how I brought you the Batwings Formation (which is all over my blog and is free for taking) and the Beanieville Overnite Daytrade (whose methodology is explained in the manuscript). When I find more neat tricks I will talk about it in a future version of the manuscript. Don't worry though, if you own the manuscript already, I will send you the new tricks as I discover them. Tricks are always helpful and can make you some nice coins, but trading the Beanieville Way (what the core of the manuscript is about) is what will multiply your wealth many times in the long run. I am very confident that in the future most people will trade the way I laid out in the manuscript, if they are logical and want to build long term mega wealth.

I'll still have the daily posts like I normally do. If I want to reveal some of my trades, I will make a new post, though to a lesser extent. Once my trade is done, I may already be away from my computer and out the door. That also means I won't be posting the "Overnite Daytrades" everyday. Eventually, many of you will probably need to invest in the manuscript. It's a really good thing; No, it's an awesome thing. You simply cannot go into battle without the right thought process. Work out the numbers in your head and see how much you have already lost and continue to lose and decide if you might need to make a change.

Also, I won't be reading much of the commentary anymore (although if I see trolls posting disruptive comments I may have to eventually turn to comment moderation or remove the comments section altogether), but if you got something urgent for me, feel free to email me at beanieville@gmail.com . I'll try to answer everyone's mail.

I wish you all the very best!

Happy New Year!


Beanie

The Easiest Daytrade To Make

Essentially there are 3 timeframes to trade when it comes to "daytrades":

1) the open

2) the close

3) and everything else in between


As you know by now, #3 is really the toughest to trade. It is the lowest probability trade of the three types, and your stops frequently get hit. Frequently, even if we get the direction right it is not very profitable because we get whipsawed like crazy. However, this is where many trades can be made, so the scalps do add up to a good chunk if you know what you're doing.

Most of the money is actually made trading #1 in the morning because of the big movement that normally occurs at that time. We call that "fading the gap". It is a fairly high probability trade and highly profitable trade if you have the stomach for it.

Trading #3 as you've seen my calls on the SPY, via the Overnite Daytrades, appears to be the highest probability trade, though the profit may not be as big as #1, fading the gap. This should be the preferred trade for most of you, because the number one rule of making money in the stock market is NOT TO LOSE MONEY, or lose as much as you need to. The nice thing about the Overnites is that even when we were wrong about the direction, frequently we were able to get out at breakeven. That is such a sweet spot to be in!

The Batwings Formation

No, no, not the one above!

It's this one, the one below:



That's what we got on Friday on the SPY. Check the 5-day chart. Bat gotta fly back where it came from..... down.

Will All The Novice & Advanced Traders Please Stand Up?

Ok, I got lots of questions from beginning traders asking me if the Beanieville manuscript is for them since they're only beginning traders. I highly suggest any beginning trader to own the Beanieville System manuscript as the foundation of their trading/investing. Do not spend another dime on anything until you've gotten the manuscript. I'm serious. I wish someone would have taught me this (of course nobody can because they don't know it) when I first got involved with the stock market. That way, I wouldn't have blown out several accounts years ago, read so many books that I've read, paid for several stock picking services that I did, and generally feeling in a constant state of loss and confusion for years.

The manuscript is about 60 pages long and focuses mainly on the two supreme components of any successful trading and investing methodology: Compounding and money management (not the type of money management you're accustomed to, if you even use it at all). So why am I charging $849 for this and not turn it into a book and charge $32 instead? Because I know there are plenty of people paying megabucks (from 10's of thousands, to a million of dollars for an hour lunch with Warren Buffett) for powerful and unique information on how they can best approach the stock market. And the Beanieville System contains extremely powerful information on how to approach the stock market from day one, whether you're a beginner or an advanced trader.

I'm not worried that selling the Beanieville System will impact my future earnings as a trader and investor, because the system can be applied to most etfs/indicies and stocks. Even though I give out the Beanieville Overnite Daytrade methodology in the manuscript, the system isn't about that at all, or some other type of secret black magic trading methods. Because if it were, I would keep the whole thing to myself instead of selling it. (And remember, there are no such thing as holy grail indicators...even though some do come pretty close, like the Batwings and Overnite Daytrades. Even if there were, none of it can be compared to the power of long term portfolio building techniques that use the power of awesome money management and compounding.) You see, if you been to my blog long enough, you'd know I gave out the powerful Batwings Formation absolutely free. I still use that everyday whenever I spot it, and I don't care if all of you folks know that formation and make money from it. So you know, I don't need to keep anything to myself.

If you want to approach trading or manage your portfolio (IRAs included) from a fresh powerful perspective, then you really should consider getting the manuscript. Beginners, it will save you many years (perhaps a lifetime) of headaches. Advance traders, it will take you to the next level in how you manage your account(s) to boost your returns to a whole new level that you never thought was possible.


Enter...

Are You At Your Best?

Nice Links For This Weekend

Linda really is as smart as they say.


Waxie was my first master and taught me the basics of trading. The stepping stone kept me open-minded enough to eventually led me to discover great things, like the Beanieville System before you.


I finally figured out why I had a couple of problem creators on my blog for months, even using multiple ids to attempt to mess up my blog. They thought they could take my traffic and drive them to their blogs. If they only knew the truth about blogging.


This advertiser has been with me for months, but I got no clue what it is that they do. Do you?

Get the Preface and Introduction of the manuscript for FREE by emailing us at beanieville@gmail.com .

Prediction for Monday

We could gap higher in the morning but we should close in the red as a result of the "Batwings Formation".

The Cat Was Thrown

So You Want To Be A Financial Blogger?

Why? Can one really make lots of money from blogging?

I'm gonna be brutally honest with you, if you think blogging is a good way to make money through ads and affiliate programs, blogging is a total waste of time unless you have something original to offer that has long term usefulness for your readers. With my decent blog traffic I make about $200-$300 per month on the ads on my site, enough for 2-3 nice dinners per month with my wife. Shocking, I know, but true.

The only way you can make a decent amount of additional income (to your own trading and investing) is if you can offer something uniquely original and useful to your readers. That's it. That is the only way. So do you have that? If not, you're better off spending more of your time mastering the stock market until you gain such a strong knowledge base that you eventually have something original and of value you can offer to your readers. Only then will they frequent your blog/site and perhaps buy your unique knowledge or know-how.

Whatever you have to offer, you better be original or have something better than what is already out there.

Can you compete with Brian who does video charts on general market direction and wrote a book? Do you think your blog will last if you just post a bunch of visual charts on your site, while a thousand other bloggers can do exactly the same thing?

If you offer stock or option picks, can you compete with Waxie, who offers stock picks, option picks, a chatroom, and gap fading techniques? By the way, Waxie was my first master who taught me the basics of daytrading. Can you compete with that if you're offering the same thing? Did you write several books like Waxie did?

If you're into penny stocks, can you compete with Timothy, the pennystock whiz kid who has a unique pennystocks charting analysis, trading alerts, and a book?

Can you compete with Tim Knight if you're offering visual charts and analysis on your site? Tim wrote the Prophet Charts program, used by many options and futures traders, and he wrote a charting book.

Can you compete with me? I got the Batwings Formation, the Beanieville Overnite Daytrading methodology, and the powerful and unique Beanieville System. My manuscript is essentially my first book. Everything I offer is totally unique and original.

Ok, maybe you just want to post about economic news and your personal evaluation. What makes your blog even remotely as special as Barry's blog that does just that? He also offers Fusion IQ, his proprietary software platform on his blog. Can you even hope to compete in that arena?

You see what I'm talking about? The financial blogging world is so crowded that if you think you can make decent money blogging without something very original to offer, you're likely toast. Take it from me, put more time into mastering yourself and the stock market that is much more worthwhile.

With that said, the nicest thing about having something original and useful to offer to other people is that you can potentially generate additional income while in your sleep. For me, when someone buys my manuscript, it's like a weekend income for me, that I can put back into my portfolio so it will compound even faster.

If you don't really have anything original to offer that has long term usefulness to your readers but you still enjoy blogging, you might want to consider forming or joining a band. At least you'll get a nice and fun place to express your ideas.

The Impossible Dream

The Law Of Attraction

Merry Christmas.

Lately, Cramer Thinks Everyone Is A Daytrader

But it does seem like everyone is a daytrader these days...

The 'Holy Grail' Of Trading

"Traders and investors have always dreamed of magical formulas or Holy Grails enabling them to beat the market and reap huge profits. Pursuing Holy Grails only ends in disaster. For example, among the garbage you will find out there: black boxes or secretive computer systems where the rules are hidden. Black box systems lose in the real world. They are useless. The absolute key is a proper overall education.

.....If you want the quick fix, the instant profit landfall or the insider's tip, no one can help you. Some would just rather have illusions than reality."
--- Turtletrader


There really is alot of truth in the above statement. So many traders look for the magic indicator(s) or system that they hope will print easy money for them. Some don't even care for indicators or system, they want a guru to market time for them so they can piggyback on the trades and make instant big money. The latter group, in the end, being absolutely lazy and blind that they are, will be in much worst shape than the first group constantly looking for a magic indicator or system.

I believe that there are indeed 'Holy Grail' secrets to trading, but not through indicators or systems. I truly believe that someone like Warren Buffet has found his Holy Grail of investing, but through powerful thought processes regarding money concepts rather than through chart indicators or trading/investing systems. I doubt he has some magic formula or system that helped him turn $1 million into over $50 billion in the course of 35-40 years. The Holy Grail, I believe, lies in how he approaches money management and the money concept of compounding. Unfortunately, very few traders grasp the supreme importance of this. They keep on looking for Holy Grails when they never have the right thought processes to begin with; hence, they will never find what they so desperately try to look for, not in their entire lifetimes. An incredible number of these traders prefer leverage over compounding; that's why many get involved with options or futures trading. Read this eye-popping post about leverage and compounding and why leverage will never surpass the power of compounding.

Even though I put an addendum in the manuscript about how to trade the "Beanieville Overnite Daytrade" (and it is a darn good trading methodology!), you're not going to find much more than that particular trading methodology in the entire manuscript. It is because the Beanieville System, in its core, is really about money management and money compounding concepts applied to trading and portfolio management. Believe me, coming from both a daytrader and investor that I am, it is by far the best approach to the stock market. Last year, someone paid over a million bucks to have an hour lunch with Warren Buffett. Obviously, that person who won the bid wants to extract Warren Buffett's Holy Grail approach to investing. I'm telling ya, you do not have to spend a million bucks to talk with Warren Buffett. Just buy what he buys, and funnel those stocks into the Beanieville System via a little bit of trading the Beanieville Way and you should be able to do extremely well.

Rich People Should Put Most Their Money Into The SPY

...and learn to trade for themselves a little, the Beanieville Way.


More Madoff victims













Merry Christmas! I'm offering the sample manuscript for free from today to the midnight of Christmas. Email me at beanieville@gmail.com for a copy sent to your email.

Where Is Santa?

Santa is already two days late.

We had an "inside day" today so a possible rally tomorrow. I don't have high hopes for it though. Last week's rally may have been the top.

I think holding SPY short until the end of the year will likely be very profitable.

Traders are very negative towards the market. Many feel that SPY 500 next year is already a foregone conclusion. That's gonna hurt if the bears get their way. At SPY 400-500, many stocks will become penny stocks. Make sure you watch your portfolio. Make sure your stocks are at least market leaders, if you're gonna invest.

Today's move should set up a rally for Tues.

We had quite a bounce into the close which sets up for a morning gap down. I think after the gap down, we should rally at least the first part of the day. We are short term very oversold. My feeling is that the last week of December will not be good for the bulls.

Fade the SPY on the gap down and/or morning dip.


Richart Branson on Business

Market Can Be Pretty Disturbing At Times....

I've been reading some nasty chit out there that says we could see the SPY cut in half next year...... and then another half a year after.

That is quite disturbing.... considering how much our govt is doing to get us out of this mess.

In real life, So far, where i live, not much has changed. The malls are still as packed as they've been.

I think we've bottomed, but i'm not a good bottom caller. I'd say I'm wrong if we breach the 2002 low. Then, we really have to be very careful.....

Got this video from a reader:

Solars about to move even higher?

If the market gaps up on Monday, be sure to watch the solars like ENER, FSLR and SPWRA.

Some people have said that if oil goes to $40 a barrel, solars will be penny stocks.

Well, we're near $40 right now and solars are still standing. Obama is a real gem for

the solar industry. Everytime he speaks, solars rally.

Do You Have The Right Tools To Trade?

9 for 10!

That is one big fat hen, no matter how you cut it.

Keep on layin those golden eggs with those Overnite Daytrades!



We rock!

When It Comes To Trading.....

You don't need Tony Robbins, you only need the Beanieville System.

Move along....

We pull back in the morning....

but I think this week we could rally huge, as shorts are forced to cover.

At some point, traders will probably take profits or sell due to year end tax loss.

So be aware of this.

Ready To Turn Your IRA and 401k Into A Money Making Machine?

How far do you want Beanie to go with the "Overnite Daytrades" before you believe that the Overnites are for real and that the even more important Beanieville System is for real? 15 plays? 25? 50? 100?

Most people's IRA and 401k are decimated beyond recognition. What do you do in times like these? Sell and take the loss and turn everything into cash and never to go back to the stock market? Or do you want to turn your 401k and IRA into money making machines starting from day one, and everyday and into the longer term?

No kidding. He can help you when it seems like nobody else can.

Yes, We Hit 7 for 8 on those "Overnite Daytrades"!

...as of this morning.

See ya the last 5 minutes, and let's make it 8 for 9!

We're hitting 6 for 7 on those "Overnite Daytrades"!

...since I started making it official that I will call the SPY everyday towards the close.


Let's make it 7 for 8 tomorrow!

Oil going higher this week.

Look at the volume on that reversal last week on the USO, which closed @38.10 on Friday. That kind of volume is to be respected and I think we get at least one more week in the same direction of the reversal.



So i expect oil to move higher this week, and solars should follow.

But USO is a better play if solar is not your thing.

The Secret To The Stock Market Lies In The Awesome Power Of Compounding

It has been said:

"If you remove the 10 biggest one-day moves for the U.S. Stock market over the past 50 years, your returns are cut in half? Half the gains in the stock market are directly due to events that the mathematical models we rely on assume will never happen."

Yes, the above statement is true, if you had invested in the market index.

This speaks the extreme long term importance of the concept of Money Compounding that very few traders ever address. Everybody is always looking for the right or perfect way to time the market, yet overlook how to best manage their money to take absolute full advantage of compounding. Figure this out, and you will own the stock market.


“What is the greatest miracle known to man? Compounding!” - Albert Einstein


“Compounding is the eighth wonder of the world.” - Bernard Baruch

Linda IS One Smart Gal

Dear Beanieville readers...

I have not had the pleasure of meeting as many professional traders as Adam Hewison from Ino has. The good thing is that with the free version of INO TV, you can meet four of the world's top traders and have a front row seat to their seminars for free.

As a regular user of our INO TV service, I am a huge fan of professional trader, Linda Raschke. Honestly, I don't know why I put her in a class of her own among the other many amazing seminar authors.

It could be that she has had continued success in the trading arena for over two decades. It it could be that I am drawn to her superior presentation skills. It could also be that she is a great role model for young women pursuing a career in finance and/or business.

Ok, ok... I wont play the gender card. I am completely aware that over 91% of you individual traders are men. However, no matter what gender you may be you can recognize Linda's trading intellect and appreciate the tips and strategies in her seminar that we present in the complimentary version of INO TV.

"Classic Indicators - Back to the Future"

Besides lecturing to thousands of individual traders in over 18 countries, Linda is a principal trader for several hedge funds and is president of LBR Group, Inc. She was profiled in Jack Schwager's book, "The New Market Wizards," and frequently is featured trader in numerous financial publications and on national radio/television
programs. Currently she is the vice president of the American Association of Professional Technical Analysts.

Self-directed traders have spent big bucks to learn from Linda, but we are offering one of her lectures for absolutely no cost.

She is one of my INO TV personal favorite trading experts and I hope you will become fond of her as well.

Watch her seminar, "Classic Indicators - Back to the Future" today at no cost on INO TV.

click here

Enjoy Linda's Seminar,
Ino.com


Free stock trend analysis

30 years ago I learned this market secret

From the desk of Adam Hewison


I can honestly say that 30 years ago I learned how to trade the markets in the pits of Chicago.

It was there, in one of those sweaty, tumultuous, in your face trading pits, that I learned one of the most valuable trading secrets in the world.

This one trading secret opened my eyes to why things happen in the markets.

This trading secret, which is over 800 years old, is one of the most monumental mathematical discoveries of all time.

The publication in 1202 of the "The Book of Calculation" was never meant to be a road map to success in the markets. However, it turned out to be an extraordinary blueprint for how modern day markets work.

The number sequences contained in this amazing 800 year old book, is like having a virtual DNA for every stock, futures and foreign exchange market.

No one knows for sure why these number sequences work. Some traders believe them to be mystical, others, like myself prefer to call them one of life's little mysteries.

I have been using this sequence of numbers to trade the markets for over 30 years. I have to say that after all this time, I am still amazed that these numbers still work!

My new 8 minute educational trading video that remains true to core principles of the "The Book of Calculation." Show you step by step, exactly how you can benefit from using this trading secret.

Once you view the video and absorb this valuable educational trading lesson, you can apply the exact same principles you learn to your own trading. What could be better than that.

We do not require you to register to view this video.

Discover and benefit today, from what I learned over 30 years ago in the trading pits of Chicago.

click here to see the video

Oil & Solar gonna fly next week

Sometimes the best charts are the really simple ones from Yahoo. Go ahead, immerse your eyeballs into those charts. Extrapolate what the next move is. Are they telling you that they're gonna swing to the upside?

ENER

FSLR


The USO has bottomed, likely.

Gettlefinger, Benanke & Paulson: Here It Comes!

by Karl Denninger


the UAW decided to destroy the United States auto industry, refusing labor cost parity on an immediate basis as the price of a bridge loan for the auto industry.

Labor cost parity should have happened fifteen years ago.

Tonight, it was the last straw, and the game of chicken that the UAW played with the American economy turned into a head-on collision at 140 mph.

Mr. Gettlefinger, this is your responsibility. GM will file bankruptcy within days if not hours. Your employees will lose their jobs. Ford will survive, but all auto production in the United States will be non-union within 12 months.

You have proven the age-old canard that labor unions will literally destroy a company in order to prevent accepting that the labor costs you demand a firm stomach cannot be afforded. At a time of deep economic recession your arrogance and personal decision to destroy the jobs of over a million Americans is breathtaking.

You're done, the UAW is done, and you both deserve to be done.

The bigger story, however, is how Bernanke and Paulson ruined this nation. How they poisoned the well by lying repeatedly to the American People and Congress, destroying trust between everyone who comes before Congress and Congress.

Congress finally had enough, and the vote went down - this time into the maw of the holiday recess - the last holiday recess.

Its over.

For that, Mr. Bernanke, Mr. Paulson and Mr. Gettlefinger, you must all share responsibility - for you are all responsible, personally, for what is to come in this country.

If any of you had one iota of honor you would commit Seppuka by morning.

But you don't - you're all cowards and thieves.

United States manufacturing is dead as a direct and proximate consequence of your actions - all three of you....

click here to read more...

Scary In The Morning

We just had the next Enron thrown at us virtually overnite; obviously the market hasn't built in the surprise.

Beanie is now the SPY guy

It's been very nice and profitable to trade the SPY. There is much less manipulation there compared to individual stocks that are frequently erratic and run on news. Also, I can put in much more money there and still sleep better at night. But don't think that's the only thing I'm trading. I also do the solars.

Since most stocks do move with the indicis, if I call for an SPY short you can be pretty sure that whatever stock you're trading will go down if the SPY goes down. So, trade accordingly.

I've found the Beanieville Overnite Daytrade to be amazingly powerful trade. We're gonna keep on milking it until it can't be milked anymore. Something tells me we'll be milkin' it for a long long long time. This is also a very good trade for those who have less than $25k, since it doesn't use up any of your daytrades.


Trend analyze the SPY.


If you think the Beanieville Overnite Daytrade is cool, find out what I'm doing all day with my main account. A real class act approach to the market. Awesome for those with under $25k, fabulously awesome for those with over $25k.

Restore The Uptick Rule!

By CHARLES R. SCHWAB

The last time the stock market suffered from extreme volatility and risk of market manipulation as severe as we are experiencing today, our grandparents' generation stepped up to the plate and instituted the uptick rule. That was 1938. For nearly 70 years average investors benefited immensely from that one simple stabilizing act.

Unfortunately, in a shortsighted move, the Securities and Exchange Commission (SEC) eliminated the rule in July 2007, just as we were about to need it most. Investors have now been whipsawed by what appears to be manipulative trading, what we used to call "bear raids," which drive stock prices down without warning and at breakneck speed. Average investors feel the deck is stacked against them and are losing confidence in the markets.

For the sake of our children and grandchildren, and to avoid a needless future repeat of a bad situation, it is time to restore the uptick rule.

The uptick rule may seem far from a kitchen-table issue, but it is critically important to ordinary investors. With more than half of all U.S. households invested in the stock market, either directly or through a retirement plan, it matters a great deal. The average 401(k) retirement account has lost 20%-30% of its value over the last 18 months -- more than $2 trillion in retirement savings has been wiped out. Behind those numbers are real people who planned and saved, and who are suddenly facing an uncertain retirement and the prospect of working longer.

click here to continue reading....

No Recession In German Solar Industry

By Erik Kirschbaum

DRESDEN, Germany, Dec 11 (Reuters) - Crisis? What crisis?

While the the rest of the economy plunges into recession, Germany's solar power industry is full of optimism, fat order books and factories humming at full capacity -- in stark contrast to the surrounding economic gloom.

Throughout eastern Germany's "Solar Valley," manufacturers are racing to keep up with global demand for solar panels and the state-of-the-art machinery that makes them, even though share prices have fallen sharply this week.

"There's no recession here," said Frank Asbeck, the founder of SolarWorld AG (SWVG.DE: Quote, Profile, Research, Stock Buzz), the world's third-largest photovoltaic company, which makes everything from solar-grade silicon to solar cells and solar panels.

click here to continue reading...

Forget about what anybody thinks

Everyone has an opinion on why the market is moving in this direction and that direction. Most are wrong.

Remember everyone (but me, lol) thought that oil at $150 a barrel was warranted because there was global demand for it and that's why it made sense for oil to be headed to $200. Turns out it was more like stock traders demanding oil shares! lol

Focus on the next administration, for the next 4 years. What will they most likely do? What sectors will be the beneficiaries? Figure that out and position yourselves for the likely bull run in those sectors.

That's all there is to it.

The Simple Math on Why You Should Not Trade Options/Futures

People say that when it comes to trading, the order of importance in consideration is this:

1) Money Management

2) Stock picks


Well, I say that when it comes to trading, there is something else even more important than money management. Here's how it should be re-written:

1) Compounding vs. Leverage

2) Money Management

3) Stock picks


Leverage is basically options/futures/2x and 3x etf trading.

In this post, I talked about how you can make a living just by trading the SPY and I gave you one approach on how you can trade the SPY.

I've been trying to get people off of their options/futures addiction for as long as I started my blog. People just don't get it. Even really smart people. Most traders think that leverage is the key to making money in the markets. That is why they resort to things like options/futures. They are wrong. The key is not leverage, the key is compounding. It's as though you have to run the simple math through their thickened skulls before they finally get it. I ran some math last Friday, and I'm sure it opened some eyes, wide. I'll do it again at the end of the post.

Most options traders are really happy if they make 100% (and that is usually on a really good year and they're totally focused). I've already talked about how risky options are, that you gotta get the direction, magnitude and timing correct in order to make money. In short, other than for hedging purposes, options trading really is a suckers game.

Futures trading is a little better than options, but you have to be one of the best traders out there in the world in order to make money consistently. More than 99% of traders will eventually blow out their accounts. If I were trading futures, I know for a fact I'll will be part of the sordid statistics. I think I'm a good trader, but I'm not the top 1%.

I'd like to proudly add that the beanieville system should allow you to beat the pants of any trader. With the beanieville system + morning gap fades + overnite daytrades + account greater than 25k (so you're not subjected to the pattern daytrader rule), you can potentially make 400-1000% in one year (trading regular stocks or etfs with no options or futures) if you're focused and you know what you're doing. (*All disclaimers apply though, and i'm not making an explicit guarantee, but you'll understand why i say this if you've read the beanieville system.)

By the way, you do not need the beanieville system to generate 1 point on the SPY on a daily basis. Most good traders can do this. The Beanieville System, whose concepts are as timeless as Compounding itself, just gives you lots more power and flexibility.


Now, let's do the math. If you were to make an average of 1 point on the SPY per trading session. You got 5 days in a week, and 4 weeks in the month. A trader can potentially generate 20 points per month on the trades. With the SPY at $85, the yield is near 25%. That is a "potential" 25% gain on your money per month.

If you were to use compounding, what would your return be by the end of the year?








Answer: About 1,400%


So now, I ask, why would anyone want to put Leverage above Compounding? Because they don't know any better, is my guess.

Will start to add Overnites to my covestor account

As you know, my Covestor account (starting value = $12,000) is down something like 33% after 5 months. So I got 7 months to go to close out my first year at Covestor. I've already decided that the account there will live or die by investing in solars. So follow me at your own risk. Also, the Covestor account is not my major focus because the account will not support me and my family. lol

As a full time daytrader, being subjected to the pattern daytrader rule is like a midget driving a minivan where half of his eyeballs are above the steering wheel. There are many instances where I want to get out of my trades/investments when the market came tumbling down but could not. The account went thru a market crash as well, and I was mostly fully "invested".

My goal is still to beat the pants of the pennystockers and especially Tim Sykes. He started with 12k, so it's only fair I start there as well. However, Covestor does give pennystockers a big advantage in that the site does not consider actual account return at all. It is based on "return on investment", or ROI. So if you trade with 10% of your money and you buy 1 stock that makes you 50%, Covestor sees as though your account is up 50%. Covestor sees as though you put 100% of your money into the trade, when in fact most pennystock traders cannot do that or they run the risk of blowing up their account quickly. But for me, pretty much all my money goes into a trade, so whatever you see at Covestor, 'return since inception', is close to my actual account return. For pennystockers, their 'return since inception' is huge but is not representative of actual account return. Tim Sykes shows nearly 4000% "return since inception", but his actual account return is about 200% for the year, which is pretty good still. So this is something to keep in mind when you look at huge % of returns some of the traders are getting. The way Covestor makes the calculations are the same way a fund manager's returns are calculated, but it is fairly accurate, since most fund managers are FULLY invested most times.

I have decided to add the "beanieville overnite daytrades" of the SPY to the covestor account, via a little bit of margin usage, to help juice up my returns a little. That will start tomorrow.

In the long term scheme of things, I know I don't really need to do that, but some of you are really wrapped up in short term returns and you want to see me get rich quick. (lol). So I'll add the overnites for awhile.

Let's rock!

Make a Living Trading the SPY

The Beanieville Overnite Daytrades have been extremely profitable, as it should because the successful rate is somewhere north of 80-90%. One could get an average of 1 point profit move on the "overnite daytrades". You got 5 days in a week, and 4 weeks in the month. A trader can potentially generate 20 points per month on the trades. With the SPY at $85, the yield is near 25%. That is a "potential" 25% gain on your money per month.

Those who use the Beanieville System should consider making SPY your core holding/trading. SPY will never go bankrupt on you and will always have trading volume. Add the Overnite Daytrades to your toolbox, and, along with the morning gap fades, you can absolutely (in my opinion) make a living trading the stock market for the rest of your life. The SPY is for you, especially in these uncertain times. Why waste time worrying about individual stocks that could become the next Enron?


Learn more about the Beanieville System.

The Psychology Is Changing

The last two days we had major bad news out and the market still rallied huge. The huge mega selloff on monday wasn't met by continued selling, which kinda surprised the bears, much to the joy of the bulls.

We're coming into what is typically an uptrending December. And having fallen off the cliff hard in November, this sets up nicely for a december rally.

The bears are calling for another massive leg down coming soon. It will have to start happening the next 1-2 days or so for their case to have any chance to play out, imo.

So we gonna gap down tomorrow, and likely huge, but let's see if the bulls can reject the bears again towards the close. If the bulls can clear SPY 90 soon, it's gonna be a joyous Christmas.

Another Batwings Formation

I like seeing Batwings on a one or two day timeframe and I usually notice them rather quickly and trade on them.

Guess what I see on a multiday chart? I'm lazy to do my own charts so I give you one done by the Evilspeculator guys:



Looks like a Batwings formation to me, from November 13 to Dec 2. Btw, the Batwings formation is 80-90% successful if you trade on them. So this Batwings is saying we could go higher tomorrow. Next stop is SPY 89-91, at least. The end result of the formation could take us even higher than that.

Geez louise, it's no wonder we bounced off at the low SPY 80's today!

I don't usually get too wrapped up with these multiday Batwings formations because I think they fail more often than the 1-2 days Batwings. Something to think about if you plan to trade on it.

On a different note, I think solars could rally tomorrow. Pay special attention to ENER and SPWRA.

The market should gap down tomorrow. Let's see where it goes from there.

More downside this week, but be very careful

If I just use FAZ as a barometer for the market, i'd say that the etf is set to go higher with the next resistance at about 106 and the market going lower short term.



Today's rise was on nice huge volume. I think 100 is already a foregone conclusion. If FAZ goes higher, I'm pretty sure the market will already be seeing red.

The bears went out feasting again and pulled the skin of the bulls today. Still, I want to be cautious shorting at these levels. An intermediate term rally could be due at anytime and there could be a huge government stimulus that catches all the bears by surprise. I don't know when and I don't know what. Maybe there will be no stimulus and maybe the market is just meant to go alot lower before any rally. Just be careful if you're trading options. Any overnite mega gap up could kill your puts if you're late to the party.

One day at a time. Tomorrow is Tuesday. Let's see if the bulls can mount a reversal later in the day.