Remembering Yogi Berra

Posted October 6, 2015 By Phil Elrod

When I was a kid my dad instilled in me a love of baseball. My favorite team of the time was the Boston Red Sox – and my favorite player was, of course, Ted Williams. And along with loving the Red Sox, it was considered mandatory to hate the Yankees. And I did just that – except for one; Yogi Berra, the Yankee catcher. For some reason, I always liked Yogi, even when he made a clutch hit and ruined the day for the Red Sox.

Yogi Berra passed away this year. He will be remembered – not only for his excellence on the baseball diamond, but for his legacy of great quotes. If there is anyone in baseball that has been quoted more often Yogi Berra, I do not know who it might be. I remember so often a Yogi Berra quote while I am watching and trying to figure out this weird market we have today.

I don’t think Yogi ever made a comment about the market directly – at least I do not recall one. But he made several that are so apropos that they could have been intended for the markets. For example: “If you don’t know where you are going, you might wind up someplace else.”

I can’t think of a statement that is more valid about our current market. No one has any real idea where we are heading in the short term – or in the longer term for that matter. We are all just watching, waiting and trying to figure out what is going to happen next.

And Yogi had a quote for that as well: “You can observe a lot by watching.”

So I observe and I watch. Just about the only thing I am sure of is; yes, another Yogi Berra quote: “No matter where you go, there you are.”

I will always remember you Yogi.

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The Yen this Week

Posted September 19, 2015 By Phil Elrod

Once in awhile I like to remind readers of why I use a strading method called “See the Music of the Market.”

The following chart is of the USDJPY pair for the past week. The chart is plotted at 5000 ticks per bar and the white bars represent the first bar of each trading day.

The horizontal lines were placed on the chart the Sunday afternoon before the trading week began. Watch the price bars as they move along during the week. Notice that virtually all oscillations began or reverse at or very near a horizontal line. I could write a book about how the trader can use this information to trade short-term successfully. In fact, I already have written such a book. Actually two of them!

Having a very good idea where price is most probably going to turn and move in the opposite direction is what short term-term traders long for. It works on ever single security market I have ever tried tot rade.

The secrete to producing those lines is available in my book See the Music of the Market for less than $10.00 and is available from this site under “BOOKS.” The indicator that guides you in creating and using them can be rented for only a few dollars a month from TradeStation. It is called the RMI and is probably the best value in trading tools ever made available. You can pay many times more, but for predicting short term oscillations, I will put my RMI method up against anything, anytime. Order the books from this site. Order the RMI by clicking the link below:

A custom indicator package will all my custom indicators shown above is also available at:

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The Week of Much Ado About Nothing

Posted September 19, 2015 By Phil Elrod

The FED did what most knowledgeable people expected – NOTHING. They have painted themselves into a corner and have little that they can do about it – except talk. And talk is all that they did. Our economy limps along on a wing and a prayer and everyone hangs on the words of the FED – like they know what they are doing.

I am not a noted economist – I am just a little nobody. But even I know that the FED is not the answer – the FED is part of the problem. I can see that – why the hell can’t they see it. Job security and ego come to mind – there are other possibilities, but I don’t want to be too harsh and call anyone a dummy without sufficient proof. Some might say that the FED’s record of predicting economic activity accurately provides such proof.

So the currency markets traded up and down and the stock market swooned a bit. Monday may bring more of the same – or we may return to our euphoric state of “life is good” and things start going up again. Of course they will only go up again until the next wakeup call sends investors scurrying for safety.

One of the places FOREX investors seem to think is safe these days is the Japanese yen. We live in a very strange world.

And Donald Trump was in town this past week. He wants to make America great again. I’ll go along with that – sounds good to me. However, with our national debt going through the rook and into the stratosphere, and the value of our dollar in the cellar and looking for the drain, I personally think that our greatest need is for someone to save our financial ass. After that, making America great again makes a lot more sense to me.

Yes, my friends, we live in a strange – and scary – world.

But what the hell – we have survived almost 7 years of economic mishandling, political idiocy, diplomatic ineptness and military blundering. America must be invincible.

We may not be invincible – but so far we’ve been hard to kill – but the scars of battle keep piling up. One of these days the bell is going to ring for the next round, and Uncle Sam is not be able to get off the stool. When is that gonna happen. I do not know – but it is probably going to be sooner that many think.

Monday starts another week – and another chance to make hay while the sun shines. Let’s hope we can harvest enough hay for the coming winter – from where I sit it looks like it’s gonna be a rough one.

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Is ¼ Percent Difference a Deal Killer?

Posted September 10, 2015 By Phil Elrod

You are a business executive and you are looking at an investment loan. The loan is for one million dollars ($1,000,000.00).

You are about to close the loan when your banker tells you that he must raise the interest on the loan by ¼ percent. What do you do? Kill the deal or proceed with your investment.

If you are like me you would look at the numbers.

Your $1,000,000.00 would now cost you $2,500.00 more interest for the first year.

Now $2,500.00 is, on the one hand, a lot of money; but compared to what a million dollars can do when invested properly it does not appear to me to be a deal killer. Any business investment that could be killed by such a trivial amount is probably too risky to do in the first place.

Something is wrong in America. Whether the FED raises interest rates by a ¼ percent next week, or not, should not even be news worthy if there was not something very wrong elsewhere. Markets are affected in the long term by fundamentals, like interest rates; but in the short term they are driven by the mass psychology of the participants.

The problem in our financial system is not that ¼ percent increase in interest rates; it is the perception of what that change represents.

Perhaps it is a warning shot across the bow that we need to wake up and look at what we are actually doing with our finances. Debt matters. It must be dealt with at some point in time. And it should not take a genius to understand that the bigger the debt the bigger the problem.

We have been printing and spending money like a drunken sailor. It will eventually have to stop – that is a fact.

The only question remaining is when “eventually” will arrive. I do not know, but I sense that it is closer than we would like it to be.

So let’s make money while the sun shines and try to stack up a few silver coins for the last days of fiat money.

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A Yen to Trade

Posted September 6, 2015 By Phil Elrod

I have to confess that these days I have a yen to trade the yen. Central bankers of the world, whom I like to think of as the jockeys riding their respective currencies in the race to the bottom of the value barrel.

If that sounds negative, it was meant to be. Fiat money gives central bankers a license to print and they are exercising that privilege all over the world in a manner that is not going to end well. The US dollar is heading for a big time bruising somewhere down the road. But it will evidently have plenty of company.

However, the yen, thanks to the Bank of Japan’s implementation of Abenomics is determined that our Fed, nor any other central bank will not out print them. So the yen is probably going to become totally worthless before the US dollar. In the ugly contest currently going on in the currency world, the yen is the winner over the US dollar and just about any other currency on planet Earth. The yen is almost certain to tank before the dollar.

So I watch for opportunities to trade against the yen. Our current string of Wall Street selloffs is providing me opportunity after opportunity to get short the yen at attractive prices.

Currency traders are a strange lot. They run for cover of a safe haven currency whenever they sense a financial crisis is brewing. And we have financial crises brewing right and left these days.

What I find strange is that they consider the Japanese yen a safe haven currency. Once it was, but I have a hard time figuring out how it can be at this time. Of course I always try to remember a quote from one of my early mentors in trading, Alexander Elder, “the crowd may be stupid, but they are stronger that you are.”

So I continue to watch for opportunities to jump into a long position against the yen – usually using the USDJPY pair. But the markets are very volatile, so trading in these markets implies more risk than usual and a trigger finger ready to react quickly to changes in market momentum.

But I have an advantage over many other traders in hot and volatile markets; my RMI indicator. It provides three critical things needed to trade volatile markets:

1. It tells me where to place horizontal lines of future support and resistance.

2. The probable direction of the market in the near term

3. Sudden and significant changes in market momentum.

However, it is not for the lazy trader, as it does not pop up signals, you have to understand how it works and observe its action in real time trading situations. It takes a little effort, but is the best way to assess market oscillations I have every found in thirty years of futures, stocks and FOREX trading.

You can try the RMI for TradeStation free by clicking the link below:

And as a bonus, after you have been signed up as a RMI user for thirty days, I will send you a free copy of my eBook, See the Music of the Market.

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