After The Noise Takes a Vacation

China Life Insurance Co. LTD (LFC) was recommended to me in an email I received a few days ago. I'm always willing to look. When I do, often I am mystified as to why a "buy" is suggested after a nice run up.

After The Noise traders can see the opportunity here. It happened at about the $43 level. Within the "noise" archives you'll find dozens of graphic examples of this simple trading method. The idea is to take a small risk under specific circumstances when a stop-loss can be set at an appropriate level. If you got in now, where would you put the stop?

Maybe LFC will pull back to the moving average lines. Maybe...maybe...under those circumstances...maybe a trade will make itself known.

NO VACATION FOR KNOWLEDGE...

All my trading e-books are available here at this site. And you are welcome to the "free" intro ebooks. Just email me with your request.

But it is time for me to take an AfterTheNoise vacation. Other projects now demand my full attention, such as....

http://www.thelakethatstolechildren.blogspot.com/

and

www.daniellesbeacon.blogspot.com

Please visit those sites. Many thanks for your interest in my work and these simple techniques. Contact me by email if you have questions.

Evil Knieval Takes a Leap with Dow Jones Chart

Jim Sinclair at www.jsmineset.com offered this view of the Dow Jones rally. His point: Bear market rallies have nowhere to go but down if no uptick rule is put in place.

The uptick rule so necessary in the stock market does not exist in the mini-Dow Jones futures market. For this reason, it is relatively easy to trade up or down, whenever a trader sees a signal to get in.

It is never too late to learn something about the mini-Dow Jones futures market, which offers flexibility and leverage. To learn why this is an important part of your trading arsenal, email me to receive your FREE REPORT: How to Ride the Mini-Dow Jones Up or Down.

Do it before Knieval goes Kaput.

China and the U.S. Treasury Bond

What does this man have to do with the U.S. Treasury bond chart below? Zhou Xiaochuan, above, is the governor of the People's Bank of China. In an essay released this week, Zhou has suggested that it is time to develop a new currency that would replace the late but great king of all currencies -- the U.S. dollar -- as the global standard. The proposal includes revamping the world's financial structure. Such a revision would, Zhous said, help dampen the growing discontent among developing nations, who are weary of U.S. dollar dominance.

China, Japan and other nations, such as Great Britain, buy enormous sums of U.S. Treasury bonds. This buoys our economy as it puts money in our government coffers. If these buyers become sellers of bonds, we'll see bond prices fall hard.

A scary thought. But there is a solution. Average American's can learn to trade Put options in the U.S. Treasury futures market. Those options will grow as the price of bonds fall.

The techniques are not difficult to understand, but there is always risk. Past performance does not necessarily indicate future gains.

Even so, some option can be purchased for a few hundred dollars, not thousands. My free ebook How to Beat Hyperinflation Before it Beats You is an excellent introduction..

Will John Q Take The Hint? Pain = Gain

Warren Buffett knows a financial market bubble when he sees one. In the late 1990s he watched red hot internet stocks implode. This decade he witnessed the housing bubble pop. Now the Oracle of Omaha says the ultra safe U.S. Treasury bond market is overpriced and ready to blow. But do you think Main Street America, those good folks who could use a few extra bucks, will listen? Doubtful. This hardworking, fair-minded group wouldn’t know a bubble if it exploded in their faces.

Yet this “for the ages” opportunity could help middle-class homeowners and others burdened with credit card debt hedge against more hardship – and maybe make a profit. They don’t need a lot of money to get in. They don’t need to own U.S. Treasury bonds.

What they need is to learn how to risk – and there is risk – small sums of money buying Put options. And, if they can afford a far more risky venture, they need to learn how to sell U.S. Treasury bond Call options, which will immediately add money to their accounts. Powerful strategies that use both techniques are also worth learning. And you don’t need a degree from the Harvard Business School to understand these methods.

But who is listening? We all know people who bought at the top of the internet stock craze. Last month I read about a smart business woman who launched a real estate business in 2007 – and quickly went bust. She should have known better. Yet right now I wager she and plenty of others are tempted to buy those "triple-A" rated debt instruments known as U.S. Treasury bonds. Backed by the government, by golly, they can’t go wrong.

Oh yes they can. As Mr. Buffett explained in his annual letter to Berkshire Hathaway Inc., shareholders, the yield on t-bonds is next to nothing. That’s because in late 2008 the price of bonds soared as the stock market took a beating. As a result, interest rates fell to near historic lows. But now the U.S. Federal Reserve and Treasury Department are trying to avert financial Armageddon with a stimulus package the size of which boggles beleaguered minds.

In the end, the cure may cause inflation, the well-known enemy of fixed-income instruments like bonds. The pin that bursts the bond bubble may very well be the kind of hyper-inflation that forces interests higher and quickly decreases the value of bonds. But one man’s wipeout may be another man’s windfall. If only John Q. would take the hint: this is the equivalent to that “hot” insider tip you always dream about. The penny stock that explodes upwards. The horse that can’t lose.

But most folks will only moan about the big problems that are out of their control. On one hand, they are right: Nobody on this planet from President Obama to the Oracle of Omaha can insist that a man-made global phenomenon behave itself.

On the other hand, knowledge is power. Learn something new. Nature repeats. Like all bubbles of the past, the bond bubble will eventually burst. You can take that to the bank – if you learn to trade bond options.

Financial Survival is Your Only Option: How to beat the 'street' with options and new knowledge

Learn something new. That is the essence of survival. When pushed to the limit, the hero in many stories must dig deep to discover fresh insights, resources, clues. Only then does he or she save the day.

Save your day – or make your day – by looking inside. Leaning on old reliable skills is valuable, but it may not be enough. Make a list of things that may have helped you avoid a current financial disaster, difficulty or debt load. Master one thing on your list – if you believe it will be useful in the future.

The future is now. It’s not tomorrow or further down the road or in next month’s subscription of your favorite magazine. Actions must be considered and then taken – now. Small things first. Nothing so radical that in months to come it will be seen as hasty or detrimental. But change now, in some way. Don’t wait for change.

Expand your creativity. Consider the opinion of Barrett Prelogar, CEO of Winntech, a Kansas-based marketing group that has earned a non-conformist reputation for encouraging entrepreneurs to think big and take action. In February he attended a conference where he listened to other CEOs discuss massive cutbacks and ways to hunker down until the economy improves. Wrong, wrong, wrong.

“The reaction to a bad economy is to cut costs and save, when in reality that’s the worst thing you can do. For small businesses, all the corporate scriptures and rules do not exist. They should use those freedoms as opportunities. I can be bullish on innovation even if I’m not bullish on the economy.”

Prelogar and the Winntech staff helped launch a new retail clothing chain owned and operated by a former college football player who had no previous retail experience. They did it for a fraction of the cost normally associated with opening a business. They have been cash-flow positive since Day 1 – even though they opened in the dismal fourth quarter of 2008. Name of the store? Plush.

Take a 30 minute vacation. Set aside concerns – no matter how bad they may be – and luxuriate in a half hour of creative thought. Think of it as a mind spa. Clear out the demons, the noise, the negative voices. Relax and listen. When times are tough, ignoring the obvious won’t help. But mental vacations from the turmoil are free. And they are a tried and true survival technique.

Often experts talks about cutting back on spending. Fine, do that. But every time you cut back, write down an idea that might actually bring a little money in. No “get-rich-quick” schemes. We all know that path is bogus. Instead, focus on simple gains. Sell something that is not essential, such as books, CDs, etc., that you no longer use. Someone else will enjoy the bargain, and receiving a few extra dollars can feel great. Remember, you’re not trying to create a windfall. If it happens, great, but the idea is to use what you have for gain. Celebrate each extra dollar.

Finally, learn something new that is money related. Something that does not demand a large expenditure or risk. Yet something that will prove valuable as your new world takes shape.

-- Douglas Glenn Clark

Warren Buffett Says Beware the Bond Bubble

When Warren Buffett speaks, investors and traders listen. The Oracle of Omaha recently revealed his concern about the high price of U.S. Treasury bonds. This "safe haven" has been a popular place to park money as the stock market works out its troubles.

But what goes up must come down. Long-term bond investors may be in for a shock, Buffett says, if interest rates rise and push down bond values.

How can they -- or you, even if you don't own bonds -- benefit from the burst of the bubble? Learn how to risk small sums for big gains in the U.S. T-bond option market. The Only Option Plan explains it all for you.

Warren Buffett wrote:

When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s. But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary.

Clinging to cash equivalents or long-term government bonds at present yields is almost certainly a terrible policy if continued for long. Holders of these instruments, of course, have felt increasingly comfortable – in fact, almost smug – in following this policy as financial turmoil has mounted. They regard their judgment confirmed when they hear commentators proclaim “cash is king,” even though that wonderful cash is earning close to nothing and will surely find its purchasing power eroded over time.

Approval, though, is not the goal of investing. In fact, approval is often counter-productive because it sedates the brain and makes it less receptive to new facts or a re-examination of conclusions formed earlier.

Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

The Only Option: Survival

Thank you Jim Sinclair and www.jsmineset.com for the very serious cartoons. They are a reminder of the absurdity of our times.

Survival may seem like a problem that has only one solution -- more money. But we need more than money now. We need new ideas that create a better monetary system. The one we have is seriously compromised and probably broken for good.

When will things get better? Only when we have new goals to move toward. When crisis develop, too often we look back and wish for those good ol' days. In fact, we need to look forward.

If the only option is survival, the only strategy is -- Learn Something New.