There it was, right there on the screen. You had to see it to believe it. They did it! They did it! They pulled it off. No one had ever done THAT before.

At halftime, the score sits at 10-6, the Indianapolis Colts leading the New Orleans Saints. In the locker room, someone with all the guts he needed to make something awesome happen told his idea to someone else and they agreed, and the plan was spun. It was the oldest trick in the book in action. You know, the infamous “tapping on a person’s left shoulder, when you’re standing on their right.” Who made that call? Who made that call? Who said, “We should kick the ball to ourselves”?

Playbook in hand, special teams took the field, and the New Orleans Saints did what no team had ever done. They kicked the ball to themselves at the START of the half. No one does that. Onside kicks are used when a team is under extreme duress—when there is almost no time left and it is your only choice. And since it is obviously your only option, the other team knows to line up their defense in anticipation of it.

But not that day. Not during Superbowl XLIV. They New Orleans Saints did an onside kick before they HAD to, so no one expected it, and that is why it worked! The oldest trick in the book. The surprise was beautiful. No team had ever done that before during The Super Bowl because no team ever had the guts to take that risk—until now! Now sports history is forever changed because the storybook, fairytale, underestimated, Kim-Kardashian-datin’ New Orleans Saints took that risk and it worked. They did an onside kick to start the second half and it worked. IT WORKED!!!!!!

Whatever happened after that didn’t matter because when you take that kind of risk—BELIEVING it can happen—then the universe conspires to help you achieve it. The ending was written when the risk paid off. No one ever gets there the same way, and the saints did it their way: with a gutsy, brilliant surprise.

I love this game. From here on out it will never be the same. And perhaps, after this lesson in mettle, neither will I.

Now that’s entertainment.

And the beat goes on.

The Saints Nailed It

Meanwhile, back at the office, Flash and I are discussing life and markets. Flash has been on and off the payroll for years. Strategically, I employ him as a sometimes/sometimes-not consultant. I remember when I knew he and I would work together. We had met through some money dealers in Asia, and he was describing some of his best trades.

“You’ve had a lot of great trades. How did you prime for so many good ones?” I asked.

“By being able to stomach the bad ones,” he smirked.

Ever since then, Flash and I have collaborated. If you’d like to communicate with him directly, try him at flash at mrvolatility dot com.

Positioning

My year end positioning remains the same. The trend in gold and silver remains up, and I am still looking for new highs into year end. In this instance, I am not the market. Be that as it may, I can control my entries and exits. I continue to monitor world events. Like any other trade, the most important thing is the exit plan. Don’t let winners turn into losers.

Private Eye

Due to the media’s obsession with sports icons at the moment, I feel it appropriate to update my readership connection on my relationship with Pinky Megiston. Here is the deal: our relationship continues to be appropriately inappropriate. I will explain. Pinky is my client in that she pays me a retainer for private investigation services. We are also romantically linked. I know you are thinking that this dual intimacy is highly unbecoming, as in most circles it is unacceptable to date your client. But in this instance, the faux pas is forgivable—if not favorable. The logic: everything has been disclosed online.

Words

It’s been a while since I’ve written. Special Ops assignments require intermittent withdrawal from the world wide connection. It’s great to be back, however, and I would like to I’ll leave you, the faithful, with some relevant words (the ones blaring in my ears as I write in fact). No one lays it down like the mighty Mos Def:

“You know you can’t stop my go
You can’t stop my go
Born to be who I am
(Been born to be who I am)
Bright light from a distant star
(Bright light from a distant star)
Miracles, answered prayers
(Miracles, answered prayers)
Huh, all in together now
You can’t stop my go
I’ve been born to be where I am
A bright light from a distant star
Miracles and answered prayers
You can’t stop my go
I’ve been born to be where I am
Mos light from a distant star
Miracles and answered praaaaaayers…”

And the beat goes on.

Meanwhile, back at the office, my online presence continues to be in it’s infancy. That said, the plans that are in the works have some of my collaborators collaborators–and everyone in between–smiling real big. We are all on the same page. This whole thing is one huge party. Most importantly, as my voice grows louder, the parties will become grander on a logarithmic scale. I hope you’ll be there.

It has been a while since I rapped out a market rap. Let’s start with the big picture weekly and zoom in to the shorter term daily chart of the S&P 500.

The weekly chart indicates that the downtrend in stocks is still in effect–the S&P is still within the normal range of a pullback within an overall downtrend.

S&P 500 - Weekly

Switching to the daily chart, we see a nice looking uptrend. This means that the big money is still to the downside, but on a shorter timeframe–daily as opposed to weekly–you cannot be short. Don’t short into buying; short into selling. (It works both ways: don’t buy into selling; buy into buying). How? Wait for signs of distribution and then go short.

S&P 500 - Daily

A great example was when I positioned short in July. The market showed distribution–an increase in the selling that overwhelmed the orderly buying. I shorted stocks and I lost money. What happened? I was dead wrong. In my younger days, I’d have taken a 20 mile run and said things to myself like, “How dumb can a man get and still go on living?” That was before I knew the game as well as I do now. Though I was wrong, I limited my losses.

This is not archery, it is more like baseball. Frequency of being right is not as important as the magnitude of the gains when you are right. I don’t always get it right, but when I do, I have magnitude on my side. That’s what works for me, but remember, as Mark Twain said “there is more than one way to skin a cat.” The best thing a trader can do for him or herself is not attempt to do what works for someone else, but to do what works for him/her. As part of my vision, I hope my writing helps you develop what works for you.

Zooming into the intraday charts, we started to see some sign of distribution in the last 45 minutes of the equity session. While the jury is still out as to the exact catalyst for the late day sell-off, the general consensus is that it was the downgrade of Wells Fargo (WFC) that came over the wire. One day does not make a market, but when the selling starts, it will first appear on the intraday charts. Today could have been it. Stay tuned.

S&P E-mini - 15 Minute

Last night X and I had a call about global oil demand and game theory. I have known X since we were very very young. He usually knows what I am thinking. “You’re waiting for signs of distribution to get short again, aren’t you?”

“You bet I am.” I responded.

“The big money is in the big swing. The path of least resistance in the big swing is still down. What the catalyst for the inevitable sell-off is, I don’t know. However, I have done this long enough to know that the rubber band can only be stretched so far. Eventually, it breaks–which really hurts–or it snaps back inward and finds a new equilibrium.”

And the beat goes on.

Gary completely gets it and he is the definition of eBC (eBusinessCasual.biz). This guy makes an impact and we need more people to follow in his footsteps. Keep it eBC Gary.