Matthew Klein joins Vince and updates on the Lossy award. The Lossy award got two nominations It highlights a very interesting trader problem - admitting you are wrong. This is one you need to listen too. Collective2 now has over 10,000 systems. Matthew has updated the site to better understand it’s purpose. Matthew has found that the magic is in having a strategy and executing when signalled. Market are very effecient so a winning system will slowly decline as others exploit the opportunity. Signals from Collective2 can be autotraded thru several brokerages. Matthew latest technology does not require your computer to be on all the time. (mp3)

Oliver joins for the second half. Oliver expecting bounce next week. Will continue until early May. European markets were up today and Oliver felt may trigger US prices. Big picture forecast still in place. Had expected 10% decline in January, now at 7%. Worrys are high P/E on ten year basis, will have to decline. Sentiment indices are at extreme levels. Big support for Euro dollar at 1.34 sith sideways movement in 2H10. Low for commodities maybe next week. Seasonal low in February for Oil. Sugar fundamentals say higher. Inventories putting pressure on copper. Lumber early indicator for housing. Watch for breakout above $260. (mp3)

Winning number is 367497

David and Vince discuss the current state of the market. David has heard going to 4000 and breaking out at the other end. Earnings will determine the size of the correction. Range of 15% to 20%. SP at 930. Example in 1990 was 38% correction from fear driven selling. Inflation may rise with rise in economy. You need a plan in place before the market moves. Vince highlights how important validating that your patterns still work. David reinforces how important risk management is when using your systems. Drawdowns can exceed 50%. At some point, you have to preserve your capital and profit. Be safe, make money. (mp3)

David reviews AAPL prospects for IPad. Feels like price still too high, will wait for next version. Probably not a major impact on revenue. Wireless phone service from ATT gets the once over. Lack of infrastructure seems to be the problem. Neural nets are highlighting ASIA. Forecast shows rise from $24 to $37. TIN(Temple Inland) is showing a possible entry in the next week. Rally to $22 within the next 2 weeks. Possible run to $27. Vince looking at DNR. David says wait for the momentum to turn. Review of last week’s picks. TAO fell apart because of interest rates. INFA may show another buy signal. TEF broke down as well. CNL and DUK are sloppy according to David. (mp3)

Winning number 367537

Oliver talks about the weekly PearlFisher update. Indicators last week prompted hedge position. Minor correction bottom next week. Outlook predicted up market until summer, then down. Last week high volume and  volatility. Friday was 90% day which has high correlation to turnaround. High sentiment numbers will decline in next 2 weeks. Indicators are moving into preferred territory. Bonds exhibiting strength but will decline. Euro/dollar ratio of 1.42/1 is level to watch. Eurozone countries may struggle with budget deficit negotiations this summer. Oil still forecasted for $100 by summer. Oliver likes to review daily, weekly, monthly time frames to form an opinion about the market. Oliver announces that hedge will be taken off, leaving 40% exposure to portfolio. (mp3)

Vince points out that a trader style and an investor style are different. He warns to be careful about mixing the two styles. Most advisors are not directly pulling the levers on their trades. Specialization without communication with other specialists restricts your focus and may miss the “big picture”. In reviewing some portfolios, Vince is seeing products which are not appropriate for them. This decade will be about government debt which will create volatility in the markets. Downgrades are coming. Oliver tosses out wheat as having a good year in 2010. Wheat spikes with inflation on the horizon. Could take several years to take advantage of total rise. Sugar prices are still showing positive supply/demand. Semiconductors are doing well. Banks will need to make new high for market to make new high. (mp3)

Vince explains the purpose of QID in the PearlFisher portfolio. Oliver makes the point that finding good data is more important than analyzing data. The longer term patterns are better than the EMH. $VIX jumped today to 24, Semiconductors are overbought. Oliver thinks correction is short term. If this continues for more than a couple of weeks, may have to react further. Oliver surveyed institutional clients and they replied that downside hedging was the client’s responsibility. Vince and Oliver have complete control of the trades in the portfolio. Oliver discusses TBT with rising price till 2H10. (mp3)

Europeans have a high savings rate but the demographics are going the other way. In the US, the consumer drives the economy. By 2016 in the US the demographics are favorable. One of the key drivers for the macro model are interest rates over the last 200 years. They exhibit a 60 year cycle. We are currently in the 30 year period where rates increase. This will be the background driver for all portfolios. Dollar/euro has pattern which implies the dollar will turn around for 4 to 5 years. Oliver explains why analysts follow the crowd. (mp3)

Winning number is 367662

Michael Thomsett joins Vince to discuss using options to protect capital. Michael talks about the insurance put and how to protect trade. Extrinsic value quantifies the unkowns. Vince highlights the non-correlation between the underlying and the option. He thinks it’s market manipulation but Michael explains why this may be an accurate reflection of true option price. Michael mentions CBOE virtual trading platform as test plan. (mp3)

This book is relavent right now because people are worried about the market going down. With puts, you can participate in the volitile markets on the next decade. One important point is using puts in a swing trading strategy. Picking underlying is an important consideration. Michael looks for 3 to 7 point range with cycling behaviour. Common targets are 50% loss or 200% gain. Vince reminds everyone that gains must exceed losses to have a profit.  Michael has updated, Options for Conservative Investors, which details additional strategies to get folks off the sideline. He also details what he calls rescue strategies. He then mentions options for GLD. (mp3)

Oliver and Vince in Austin next few weeks.

New winning number is 367551

Vince talks about a nugget from yesterday about a short on AAPL. Quick $3-$4. David points out the economy still has major problems. Most players still on the sidelines. Large gains from March still need to be protected. QID showed up on David’s screen. He’s looking for confirmation before committing capital. CHD met target. CPB still showing up on nets but support being tested. KMB is still a hold but must move in the next few days. Vince mentions that you should hear and learn from other’s mistakes. No one makes a good trade each time. Sucessful trading is making money with 70% winners. (mp3)

David talks about TAO. It has broken below support so may not hold up as a trade. Will look at it over next couple days to see if confirmation improves. Fib ratios are not lining up completely. David uses fibanacci ratios to confirm trades. David spends alot of time to not catch a falling knife. He gives up a little profit to minimize losses. He uses value and sector analysis to further minimize risk. Health care stocks are an example from last November. TEF and CNL are similar TAO. INFA is a long for David now. Amgen is showing up on the nets with rally to 63. RMBS(Rambus) is showing Gartley pattern for run to $27. (mp3)

Winning ticket is 367623

John joins Vince and discusses the MA Senate election. John thinks lift in market due to election results. John mentions that engineers have trouble as traders because they need all the info before making a decision. Macro indicators John recommends (global trade, solvency/consumption of US consumer, banks willing to loan money). Global trade indicators  to use is Baltic Dry Index. Retail sales for consumer demand. $3T in commercial real estate loans on books of regional banks. SP500 at 25 times earnings if earnings not there, prices will slide. Productivity increases and lower work week come from layoffs with no hiring. (mp3)

John suggests taking partial profits in sugar. Key employees should be major holders of stock in the company. John will be in Houston and Dallas in the next couple of months for the OTA Alumni events. Gold is fulfilling it’s role as a flight to safety. It is a super currency. Most currencies today are backed by a political promise. Silver is very volatile versus gold. Gold pullback would be healthy for long term prices. Japan has had a 20 year bear market. US has been in bear market since 2000. John leaning to deflation scenario. (mp3)

Winning ticket is 367730