Matthew from Collective2.com joins Vince for an update.It is a clearinghouse of trading systems. Auditor and reporter for systems results. Can also autotrade your account. Collective2 now has all asset classes. Matthew explains how to use the "Grid". Systems are ranked by how the system performs. Famous system developers have no incentive to be audited. They have a brand name to protect. Results are based on what you order on a given day, not what you said you ordered. Collective2 collects results from actual fills.

PearlFisher is adding positions. Check the newsletter for details. Matthew makes the point there is no holy grail. Figure out what your objective is. Use the Dashboard feature to see reviews of the system. Start small and be prepared to lose. Vince relates a funny story about trading in demo mode. The system is only as good as the last trade. Matthew has a theory that markets change just like an arms race. Things that are working will stop working. Collective2 allows you to see which systems are working in the current market. New autotrade feature will allow you to specify the amount of risk per trade. Forum can provide resources to develop systems. Vince updates on the PearlFisher position changes.

Vince and Bill talk about Roth IRA conversions. You have to examine your situation to see if they make sense for you. Bill explains what a separate account is and why it is important for your broker to have one of these. Prevents commingling of assets should the bank fail.  Bill mentions that all their puts have been closed. Bill is  anticipating a rally into the Spring. Vince will be presenting four things you need in your trading plans.

Jack joins Vince to talk about the new trading options available. You need something that is not correlated to equity.Jack mentions that you can trade the noise in futures. Buy and Hold does not work in commodities. Need active manager to take advantage of market moves. jack suggest that four or more advisors of different styles should be used to eliminate bias in the portfolio. ETFs are trading futures. GLD has no physical gold in the portfolio. Jack cautions that there are high priced risk takers out there. Trading is hard work. Be careful of option traders. You have to understand what they are trading. Jack has max drawdown of 25%.

Consumer confidence took a hit as predicted last week. Oliver observes that there is a strong link between confidence and the market. Divergence over the last several weeks. Expectation was that confidence would be up in line with the rise in the market. Last week in February is historically not a good month. Will use this opportunity to add to positions. Fundamentals suggest move up in the next several weeks. VIX has resistance around 30. Currently about 23. Could retest low at 17.Inflation is still on the horizon. Oil has seen seasonal low in February. Then run to July - August. Oil could get to 100 by June. Copper is tied to inflation. Copper inventories are very high. Makes for limited upside for copper. Cotton is breaking out. Emerging market demand is driving prices higher. India has 12% inflation now. Gold is a standard because it started as a currency. It is trying to break resistance and finding support at the 200 day moving average. Support at 1070. Wheat has good long run fundamentals. Big demand from large traders.

Vince suggest that we could see some more pullback this week. PearlFisher timeframes are 6 months or longer. Yen/dollar ratio is good indicator for bond yields. Japan now the largest holder of US debt. Fed will raise rates sometime this year. Bonds will react negatively. Palladium/gold correlation exists. Palladium has already moved ahead of the 50 day MA. SHould be bullish for gold prices. Bonds continue to decline. Asian markets are not performing as well as Europe. Chinese banks are tightening credit. Euro at major resistance. Dollar may fall for the next several weeks. Dollar will trade in a tight range for the rest of the year. Forecast still in place for 5-10% decline for the year. Preso on Thursday will focus on the next decade and the opportunities.

Fernando Gonzalez joins Vince to explain the key lessons all traders must learn to be a successful trader. A good education at the beginning is critical, so you don't run out of capital before you become consistently profitable. Fernando explains why looking at the broad market is important. Have to integrate the long term into the short term. Skill to see the pattern takes practice and requires continued learning. Top traders need 3-4 years to reach their potential. Never assume you  are going to be right.  Have to manage the flow of winning and losing.

Fernando points out that the market is in slow motion right now. The volatility is very low. Fernando looks at the ATR. Does not use the VIX. Speed of the market is slow and has been for more than Fernando has seen since his start in trading. Take your skills in one market where they are not working. Now with ETFs can trade different asset classes in the same account. Fernando shifts to explaining how to take losses. Fernando projects that 2010 will be negative. Recent rally is countertrend rally in overall downward momentum. 

Carley Garner joins Vince and explains commodities. Carley explains her journey into commodities. Emotions are the key to trading commodities. Reading books will not make you a trader.The new book is for traders new to commodities. It's focus is about preparation before the trade. Explains the different type of commodities. Know the product you are trading. She trades SP and Treasuries futures contracts. Futures are 24/7. Depending on your personality and how close to the fire you want to get. Short options are a good way to start. Mini grains give you the feel without the risk. She recommends using someone with access to the floor in Chicago. She sells the option and if trade works out, she keeps the premium. Risk management is secret to commodities. Futures are taxed 60% long term/40% short term. Long term rate is currently 15%.(mp3)

Carley continues to talk about the amount of capital to invest in commodities. Max of 20% of your portfolio. Managed futures are a way to begin trading. The broker can direct your trades to ensure minimum risk. Trading on leverage makes it different than stocks. This is an active investment. You need to trade the account. Make sure there is adequate liquidity. Lumber is not a good market to trade for this reason. Corn and soybean, oil, gold and silver are liquid minis. Sugar is discussed. Option buying may make sense hear. She recommends an options strategy to play the downside. Gold may be below $950 by June. Fundamentals suggest this may be a top. Selling crude calls here. Selling options acts as a hedge. Keep your emotions out of the trade. (mp3)

Michael Cox joins Vince to discuss his presentation next week. Vince mentions that Michael has just published an article in the New York Times. in it he points out the need for the US economy to adapt to the new global realities. We can not  go back. Change is hard but worthwhile. (mp3)
 

Michael explains why the government needs to get out of the way. Government wants to get more control and votes. US economy must grow the service sector. We currently lead in the services sector globally. Michael will explain in depth at the presentation next Thursday, Feb 25th. Six areas that will be different in the next decade. 3 billion new consumers who are in love with US services. Growth will be ovave to erseas. Consumerism is change forever. The kryptonite to the economy is government debt. Inflation is coming, so change your investments. Michael is seeing that folks are getting the wrong news from the media, politicians, competitors, and academia. The trade imbalance is due to consumer spending binge in combination with government spending. China is using their savings to buy up the rest of the world. Wealth equals freedom. Capitalism grows through creative destruction. When companies use government to erect barriers to innovation that is the wrong use of government.(mp3)

David relates his travels to Baltimore to learn more about neural networks. David and Vince advise against trading the news. However you do need a plan for possible alternatives when the market reacts to the news. David discusses using fib retracements on the Euro to predict price movement. Oil is trading opposite to the dollar. Greek debt crisis is not solved. Gold(GLD) will react as well. David projected $147 for gold. High probability trades have alot of hard work behind them. Vince gets an update from David on DNR. Fibs project $16.10. Value projections suggest DNR is cheap.(mp3)

David analyzes the homebuilding sector. He feels the problem is regional. Recovery will be selective. Ryland as an example is in regions that are stable. Screens for today are ASEI. Seed charts are used to train the neural nets to recognize the gartley pattern. ASEI has gap fill, fib confluence, volume spike. SBUX continues to run. Possible high of $27.20. (mp3)