Uncovering The Truth Behind The Agriculture Stocks And Fertilizer Meltdown
First we have to go back about a month ago when I sent out this alert to subscribers.
Parabolic Options Alert 09/02/08
Not since LBJ (Lyndon B. Johnson) have I heard the words "privatized the profits while nationalizing the losses" until this week when The bailout of Fannie Mae and Freddie Mac hit the news wires Sunday evening right before futures began to trade. But if anyone thinks that is the real story then keep reading because that isn't what is moving this market its just currently "today's headline".
The Real Story------>Hedge Funds Are Blowing Up
This Is The Latest In Which This Fund Took Only Weeks To Lose Billions (Apparently they aren't subscribers because the energy and commodity sectors appeared safe to them over the past 3 weeks, but at any rate this is just one of many that you will be hearing about in the coming days.)
What is really driving the price of the dollar and gold and silver and oil? Something beyond simple emotion had to take place. On September 2nd I emailed out an alert, "Ospraie fund to close after August hit" This news should be a wake up call to anyone that thinks a near term bottom is in place. In fact in the commodity market we are so far away from a bottom that this will make the housing bubble look like a day at the beach.
First this was the emailed I had sent out via an alert.
Yesterday's closing of Ospraie Management LLC's Ospraie Fund Ltd.
Ospraie Management LLC letter to investors (9/2/2008):
"The losses were primarily cause by a substantial sell-off in a number of energy, mining, and resource equity holdings during a six-week period characterized by some of the sharpest declines in these sectors in the past ten to twenty years. As the Fund's performance deteriorated, we made the decision - despite continued confidence in the Fund's positions - to reduce and de-lever the portfolio significantly due to concern of incurring even greater potential losses."
"After nine years of striving to be a good steward of your capital, I am very sorry for this outcome."
The above press release was issued to investors just Tuesday of last week. Is this the only hedge fund blowing up on a daily basis? NO, in fact this is just the tip of the iceberg. The good news is I am going to show you ways to profit not from what is being reported on but what is actually happening.
*Natural Gas down nearly 46.25%
*Unleaded down nearly 38.78%
*OIL down nearly 36.52%
*Heating Oil down nearly 36.50%
The pattern isn't what got Ospraie in trouble. The pattern only tipped us off that someone was already in trouble. This "rising wedge" that I can honestly say I called the exact top to the day from Crude Oil, Heating Oil, Natural gas, and Unleaded Gas and have found numerous ways for subscribers to profit from this decline while others have been blowing up. As they say in Wall Street "someone always has to take the other side of the trade". The good news is we continue to be on the right side.
Why is this fund blowing up and so many more just like it that you will hear day after day after day? Because they all lack DIVERSIFICATION, you might think this is 5 or 6 positions (Long Crude Oil, Long Natural Gas and Heating Oil, Long Gold Or Silver, and lastly Short The Dollar) but let me tell you what it really is.......ONE POSITION called Anti-Dollar.
That's what's driving everything a massive deleveraging process that everyone must understand to get a grip on what is about to unfold in the commodity markets that will likely spill over into the entire stock market.
What are "Derivatives"? Derivatives are a generic term for a variety of financial instruments. Unlike financial instruments such as stocks and bonds, a derivative is usually a contract rather than an asset. Essentially, this means you buy a promise to convey ownership of the asset, rather than the asset itself.
When you invest in a derivative, the underlying asset is usually a commodity, bond, stock, or currency. You "bet" that the value derived from the underlying asset will increase or decrease by a certain amount within a certain fixed period of time.
What is happening within the hedge fund community is what we call "OVERLEVERGAED" and we can have a rapid "DELEVERAGING" in process due to tightening borrowing standards from the exchanges. In simple terms they keep increasing the amount of money needed upfront to buy XYZ. (Commodities such as GRAIN, which is what stocks like POT, MOS, MON, CF, AGU trade with whether one thinks they should or shouldn't. I live in the mid-west and farmers are worried and it's costing them more to buy grain and with the current credit crunch they can't all get the credit needed from the local banks!)
These highly leveraged investments are in everything. People aren't going out of business because they made bad investments; they are going out of business because they were leveraged 30-1 up to 100-1. And guess what? These funds also own "stocks" and when margin calls come, "everything get's tossed out".
The good news is these patterns are seen in charts and it's almost like being able to see the future before it happens even though at the time we aren't always sure why it's happening. You might ask how long is this going to last? Through "Thanksgiving" but should be complete by Christmas!
For example last weeks update I was talking about 3 types of "bearish patterns" but I wasn't sure of the catalyst at the time as to why we would see such a huge decline in our shorts and stocks we owned puts in. Just that it was coming. (Hence the reason we were able to booked over 500% gains in POT just this past week). Along with 4 other double to triple gainers and a nice assortment of 50% gainers.
That was the alert I sent out over a month ago on 9/02/08 (albeit I cut it short for this blog and left out all the other happenings because I am trying to keep this entry focused on Ag plays and commodities)
This past week I sent out this update
Video Update (Watch Video Here)
(MON) Head And Shoulders Top Trade Special Update
The pattern the latest stock on our short list is on is called a "Head and Shoulders Top"
The Head and Shoulders Top is an extremely popular pattern among investors because it's one of the most reliable of all formations. It also appears to be an easy one to spot. Novice investors often make the mistake of seeing Head and Shoulders everywhere. Seasoned technical analysts will tell you that it is tough to spot the real occurrences.
The classic Head and Shoulders Top looks like a human head with shoulders on either side of the head. A perfect example of the pattern has three sharp high points, created by three successive rallies in the price of the financial instrument.
A key element of the pattern is the neckline. The neckline is formed by drawing a line connecting two low price points of the formation. The first low point occurs at the end of the left shoulder and the beginning of the uptrend to the head. The second marks the end of the head and the beginning of the upturn to the right shoulder. The neckline can be horizontal or it can slope up or down. The pattern is complete when the support provided by the neckline is "broken."
There are many variations, some of which are described here and can be just as valid as the classic formation. Other factors - including volume and the quality of the breakout - should be considered in conjunction with the pattern itself.
Volume
Volume is extremely important for this pattern.
For a Head and Shoulders Top the volume pattern is as follows.
Volume is highest when the left shoulder is forming. In fact, volume is often expanding as the uptrend continues and more and more buyers want to get in.
Volume is lowest on the right shoulder as investors see a reversal happening. Experts say low volume levels on the right shoulder are a strong sign of a reversal.
In the head portion of the price pattern, volume falls somewhere between the strength of the left shoulder and weakness of the right shoulder. Volume often increases when the neckline is broken as the reversal is now complete and downside pressure begins in earnest. One of the key characteristics looked for in a Head and Shoulders Top by seasoned Technical Analysts is very high volume on the breakout.
Although volume is important, experts warn us not to get caught up in the precise number of shares being traded. What is more important are changes in the rate of trading.
To Learn More About This Pattern Review Here
Other Video Updates This Past Week
4 Bear Patterns POT AAPL GOOG RIMM QQQQs
4 New Short Plays Both Stocks And Options (SOHU, CF, SPWR, BUCY)
Cream Of The Crop Shorts APA EOG GMXR GDP
To wrap this up you can see from the dates in the portfolio when we took "the other side" of these overleveraged hedge funds and took their money legally! Just Review The Following BLOG Updates!
It Doesn't Get Much Easier Than This!! Even A 5th Grader Can Do It!
"Turning Volatility into Big Trading Profits"
Armageddon "Party Of One" Your Table Is Now Ready
"I trust the soundness of our financial system".."where's the emergency exit?"
Thanks John,
I joined in late July and have seen an incredible increase in profits from the disastrous first half of the year due to rat braining on some of my own trades as well as some terrible recommendations from other newsletters I happened to be subscribing to at that time. I have eliminated all of my other subscriptions as of today as I can't for the life of me see the sense in hearing other newsletter writers market opinions as you have been on the right side over 90% of the time which is just amazing.
RichD
John
First let me exspress THANK YOU for the recent optons and shorts....
$--OUT THE WAZOO--$ still have to get out of "GUHVH" but it's at 308% at the moment, its hard to think of asking for anything more from you. Just keep them coming and being a newbe others please just take a deep breath and pay attention to what John advises ...
you will make MONEY...
Thank you Bfee.
John,
I am very pleased with the expanded level of options executions you have incorporated into the T123 business plan. This is obviously a welcome, successful, and profitable change. Further, your "bonus" day and swing trades in the chat room are truly "having your cake and eating it too". These "quickies" have given me, and others, nice over the top profits on top of profits (today's aapl move is a fine example). Just as important is the excitement and learning that comes with all of this. This is evident every time you say "who want's to play a day trade?" or "Ohhh, I see something, is anyone interested?" When you say it, the energy and anticipation in the room is so intense, well, it's palatable.
I close my comments with a quote that is my personal view on the current direction of Trending123 and equally so...the recent mood and direction of the chat room "Nut Hut":
"An empowered organization is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organizational success." - Stephen Covey
Thank you John!
Bud
Hello John,
I have been a subscriber to Trending 123 for about 18 months I believe. I finally entered the trading room and have observed, learned and contributed some just this week. I joined Trending123 shortly after joining Navellier's "Emerging Growth" and had never traded options. About 3 months ago I was teased into subscribing to Navalliers "Quantum Growth" at a fairly high premium, suggesting a secret stock (S&LF) that could triple in the next few months. And also possibly double approaching earnings, and soar after that.
Sign up to find out. I did. S&LF went up and then tanked after earnings. It was quickly missing from the new "buy list", and had been promoted as the #1 pick. I sent a message asking where it was, and was informed it was just an error and it should still be on the new buy list. It came back and at the next update, it was officially on the "sell" list.
I never did buy it. But what I did do in 2 trading days with you is make a great deal of money! I was able to get into the APPL, MON and BUCY puts. Waited to long for CF and APA as they were about 10% above your entry price. I learned from this. Next time I will consider the ultimate success percentage, and may enter slightly above the entry price at my own risk. It would have been worth it with CF and APA. I do not know if this is protocol, and perhaps I can find out what others do here and learn.
I sold the MON puts after 1 day trading on your advice, at I believe 153%. I entered the trading room late today(about 11:30), missing the invaluable information and a new short-term opportunity. I ended up a little shaken by the magnitude of the success of MON and sold my APPL puts for 103% about 12:30 today. I then got out of my last trade, BUCY at about 59%. I thought I needed the weekend to think about all of this. Realizing now I should have stuck tight. Next time I will.
No one can become trustworthy until you instill trust in them. I did instill that trust in you and now I also trust in you.
I am very impressed and almost feel as if I will be punished by my Creator for the ability to realize these type of gains. Understandably not all the time, but the potential in and of itself is staggering. And I know now that this is real. But I am a generous fellow and give so much more than I take in this world, I am confident I will walk independant of the lightning strikes.
I am cancelling my Quantum Growth subscription now and will give that money away. Or better yet, invest it with your guidance, and give a whole bunch of money away. That is what is thrilling to me.
Since I am new and almost a stranger in the trading room, I will act a little strange and quite, as I learn and become familiar with the diverse personalities. For a while at least. As I become more comfortable, I will begin to ask questions that I believe are also helpful to others and eventually perhaps just for me.
Here are my respectful and timid suggestions as a new participant, but not a new subscriber:
1. The consideration of some comments made applying universally to the collective audience. Assuming different levels of education, experience and longevity in the trading room. I felt comfortable and welcomed with my few entries, but believed I was the only one new to the forum. Perhaps I was.
I certainly did enter a very, very dynamic and successful production in progress. One I intend to start taking advantage of every day from now on.
2. Do not change a thing. The format is engaging, informative and light hearted. Always kept in check with the pertinant, and easy to become a familiy affair for me.
I have many friends and relatives who seek my investment advice. I told them what I have done this week. Now they want all this information to their dismay. I am teasing them now as I was teased to join themselves. I tell them it is not expensive and the stock picks and details are not mine to give away. But unlike me, they may be teased to join with great potential for success. What I experienced was more like being beguiled, which means being cheated into chear.
I believe it was Mother Teresa that said "grow where you are planted". And I am now firmly planted here.
With sincere appreciation,
John C.
John,
Since Sept. 1 my trading account has INCREASED 195% !!! I am retired and do this as a hobby. Trading with your Trending 123 advice has helped me to keep my total retirement funds even and slightly ahead thru this turmoil in the markets. My retired friends are really hurting during this time, but I am just SMILIN'.
Thank you for your excellent advice and teaching skills. I am very much appreciative!!
"Duck"
JL,
OK, this one is not strictly speaking a T123 trade, and JL has mentioned numerous times in the chat room that he does not recommend ETF trades. I am in almost all of T123 trades. I miss some daytrades when I am not nimble enough (like when I tried to look for the perfect entry myself).
I missed the first AAPL daytrade in the room today, but I had my own going, so that was great all the same. Back to my trade "inspired" by JL. I have been trading the QIDs. There was a batch of QIDs I bought throughout September from the mid-$48s all the way to the high-$56s. As the market tanked yesterday (10/2) I sold them all (700 shares) at $61. I "knew" the market will rally before the Congressional vote because of the chat room discussions and JL's updates. I bought 800 shares today at $57, and sold them near the end of the day at $62.
Still left some money on the table but not bad for a one-day turn-around. Previously I had given testimonial to the awesome profits from JL's option trades. But even for those who don't trade options, the T123 service can be very profitable if one is willing to learn and then put the knowledge to good use.
I am a self-directed trader, but I use a portion of my trading portfolio to follow JL's trades exactly as instructed, and then another portion of it for "trading around" JL's ideas. Not every trade yields obscene profits, but the overall returns have been wonderful.
I closed 16 options trades already in October (three trading days), all of which were in some way related to JL's recommendations, and the overall return was 97.33%, for an average of almost $3,400 profit per trade, and over $12,700 realized profit per each trading day in October!! And I have been very conservative in my allocation of trading $s to the options trades. My trading portfolio is over 50% in cash!! I don't think I will ever be as aggressive as the chat room participate who claimed he/she turned $600+ into $60K+ over the last few weeks. But had I been in the position in which I could afford to take similar level of risk....
Thanks to JL, my realized profit this year is over $1,000 for every trading day, thus far. I am happy with that. I am not greedy.
Coach A
JL Thank you...Thank you...Thank you... Well you get the picture .....Im almost afraid to tell my wife of my sucsess over the last few days.. making 5k 10k 15k per day is almost unbelieveable but it did happen.
Bfee
Thanks JL Portfolio doubled in the last 8 days. Awesome.....
Even with missing Friday's APPL trades........
I began option's trading just last month so I have been quite tentative but just like everything else it becomes easier with more experince.
Thanks again!
Yole
John and Trending 123,
Thanks, performance tells it all:
CID 61% gain
DQRUK 228% gain
EXCUM 42% gain
APAVQ 164% gain
APAVQ 146% gain
PYPIJ 34% gain
RULUT 178% gain
RULUT 149% gain
DQRVH 100% gain
DQRVH 66% gain
APAVQ 155% gain
CGJVL 107% gain
CGJVL 25% gain
PYPVF 95% gain
PYPVF 260% gain
PYPVF 123% gain
AULUA 94% gain
APAVA 58% gain
RTHVQ 58% gain
GUHVH 471% gain
GUHVH 100% gain
CFWN 154% gain
DQRVF 36% gain
DQRVF 73% gain
MONWP 143% gain
MONWP 131% gain
Portfolio has increased 697% overall in three weeks...that is the facts and I know there are a lot of people out there who are experiencing the same results from your hard work...most are John's recommendations, 1 from Fina and 2 from myself.
Awesome stuff! Thanks for everything JL.....
Tbird
hey john
You are the best game ever up over $60,000 in the last to weeks options trading is unreal thanks a bunch
fatsv
CF, MON, MOS, POT, APA, QQQQ, SOHU, BUCY, SPWRA, APA, EOG, GMXR, GDP, AGU
