Friday, July 25, 2008

The Fourth Bell Is Set To Toll

Good Morning and Afternoon,

After today's positive economic data, Durable Goods Orders and Michigan Consumer Sentiment, we are inching toward scenario #4 in "Four Whom the Bell Tolls." Scenario #4 is the most bullish for equities, and allows Bernanke's FOMC to begin raising rates.

Is that why crude oil is currently trading lower ahead of the weekend?

Crude oil rarely falls before the uncertainties of a weekend, so the pendulum of yesterday's negative trade has been more than neutralized in our opinion.

Here is "Four Whom the Bell Tolls"(Four Scenarios):

A safe & healthy weekend to all, please visit the Island Saturday night, as we will have an in depth "Psychology in the Upcoming Week's Earnings and Economic Data." The Psychology of the Call team leaves you with the 11 Commandments:

The Eleven Commandments of Trading

1. Never trade more than 10% of your total capital/account value in any one position.
2. Cash is King, and we recommend keeping 20% liquid to take advantage of dislocations and volatility.
3. Cut losses to 15% maximum whenever possible. If your psyche is shaken, step away and don't trade for 1 week.
4. Take and enjoy profits of 30% or more.
5. Never fall in love with a stock and never force trades or over trade; remember commandment #2.
6. Never accept excuses from management, period.
7. Use technical and fundamental data & psychology/sentiment from the conference call to select trades.
8. There are two sides to the market, long & short; take advantage of that leverage.
9. Understand the significance of the macro geo-political economic environment.
10. Unforeseen events/shocks will happen, inverting the market upside down (remember commandments #1 & #2)
11. All of the above are void without reading the Psychology of the Call.

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