subject: Netpicks 2011 Market Outlook Webinar Transcript Part 2 [print this page] 2011 NetPicks Market Outlook 2011 NetPicks Market Outlook
Transcript Part 2 of 7
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Okay. So one thing that I would say, you know, make a, you know, obviously, a commitment to yourself and I crossed that 2010 because its exactly what we said in January of 2010, no more of the B.S. systems, the Get Rich Quick. Dont buy systems or training that the developers are clearly not trading. You know, you got to go and, you know, be around people who are actually doing it and thats one of the, you know, most important things that you can definitely consider. So I want to spend some time thinking about that 93% and these are some of the things that, you know, that weve come up with.
Now, as far as to me personally, what I think the best market opportunities for 2011 in Forex, the euro-U.S. dollar or the pound-U.S. dollar or the U.S.-Yen, right? Nothing earth shuttering there at all. Those continue to be probably my favorites. I think theyve been most consistent in 2010, whether you day trade or swing trade. Mark, you said Im considering that I do look at form time to time when they seem to really pick up in volatility, the euro-CAD, the euro-Frank, the pound-Frank, the euro-pound. Two of those four you got to be very careful on spreads and brokers are very different on spreads so be, you know, be selective where youre trading.
Markets I dont like and this is a little different than in yours past, the euro-yen, the pound-yen and really almost everything else. I just dont have consistent results personally in other markets. It doesnt mean that some of you are doing phenomenally well in the Aussie-U.S. Im sure that there are those who are. For me, and like I said, this is personal, it doesnt work for me. The pound-yen used to be one of my absolute favorites. It doesnt work for me anymore. You know euro-yen just so choppy, churned sideways. I just dont see the point when I have markets that are moving much more effectively.
Forex futures. I really I continue to think and we -- weve been saying this forever and trying to push people to at least consider these. You should consider them. The commissions are very low. Its completely regulated. Theyre centralized markets. You can get in and out on a split second. In many ways, theyre better than Forex, okay, the spot Forex but just think about looking at Forex futures. If youre one of those 63% who said youre going to do more Forex this year, somewhere along the way this year, take a look at Forex futures.
Now, for my futures traders, for me again, this is personal, crude oil, natural gas, silver. And actually, those are the three that today Im trading. Now, I kind of change and I go back and forth a little bit. Ive looked over that goal. I got people on the staff that trade gold. I used to big in wrestling, I mean I just dont have time for it because Im kind of, you know, sort of hang up on the first three there but continue -- I dont see any change right now why those markets wont be good for me.
Markets I always kind of like look at. Ive rotated in and out of the DAX when Ive had the time but the time for me is not that great with my schedule now and where Im located. Eurex Futures meaning, you know, other things like the bond in a bottle or things I always kind of say, Hey. Im going to do that this year. Of course, Im still thinking about it and NASDAQ Futures because I have seen some better volatility and range there.
Markets I dont like, I personally dont like trading S&P e-Mini but I dont like the Dow e-Mini. I just do not make consistent profits with either one so I avoid them. Stock and option traders, were going to have some other people talk a little bit more about stock and options. I think there really is big opportunities in options trading. Its something that I was into heavily when I started back in the 80s and even in the 90s, this is was how NetPicks started was an option service. I got away from it because I guess I got so excited with e-Mini futures and Forex but it is something that I have in my, you know, agenda on top to really try to get back to.
Hidden gems, some of the coaches will talk about this too, the agriculturals futures definitely some opportunities. As far as big mac or economic predictions from me, you know, how am I called like to make these predictions? I was an economics major at UCLA so basically, that means Im totally not qualified. I was also premed so Im also totally not qualified to be a doctor. So, you know, take these for what theyre worth, which is probably not too much but this is my general top level thinking.
I think 2011 will be bullish. I would be in the camp of, you know, fingers crossed. Its going to be moderately strong to strong by the end of the year. Unemployment I believe is peaked and will be marginally low. I know one of five of you think that Im crazy because you think its going to crash and burn. I think housing will still struggle. Its definitely not bottom but I think some areas around the country that have bottoms and probably the worst is behind us in some areas but not everywhere.
IPOs, I think this is going to be the year of the IPOs. I think theres so much pent up demand for technology IPOs whether its a Facebook. If they get it done in time or not, theres so many profitable internet and technology companies out there. I think its going to be a big year for IPOs. No big shock there. Without any kind of external shock, I think volatility is going to be, you know, kind of average to lower. I kind of wish it was, you know, more like higher but without something just kind of unexpected happening, I dont think its going to be really off the charts at all.
Corporate earnings, I think, you know, weve had this tremendous growth record setting. I dont think were going to see as much of that in 2011, which maybe will make a little more challenging on the Upside for the markets because I think at this point, I think companies are going to have to start to hire. I mean, theyve kind of squeezed out everything on productivity, probably squeezed out everything that the employee can do. Its probably going to have to start coming from additional hiring cost.
Android versus iPhone, I think is the best thing ever for technology and technology stocks. The love affair with our phones continues. I think this is whats driving. It used to be the PC, now its the Smartphone, right, and the tablets. I mean this is just going to be great for technology. It should really benefit a lot of companies. And my last big prediction the Jets will beat the Patriots this weekend.
So I think thats it for me. If you need a res -- resolutions, finding ways to use trading system automation, Ill get into that later if we want. Not robots, not auto trade. Lower the cost of your trade, look at your spread, your commissions, your slippage, move to a higher quality broker, and definitely look at your charting platform and do your best to improve our math.
So Brian, Im going to go ahead and hand this off to you so we can kind of keep moving through this. Let me see here. Change presenter. All right.
Brian Short: Its a tough act to follow. What we need to do is kind of a report card at the end of the year to see how many of those predictions come true.
Mark Soberman: I already hit the lid on so Im hoping your reporting doesnt work so you cant --
Brian Short: Uh-huh. This is recorded and --
Mark Soberman: Geez.
Brian Short: Yeah.
Mark Soberman: Well, then I hedge everything I said or to go the other way. All right. So youre all set. There you go.
Brian Short: All right. Thanks. Okay. This is Brian, by the way, for those that dont know. Im a partner with Mark and what I want to do is just take you through real briefly my trading, what Im currently doing. And Ive decided in the last six months to simplify a little bit. I used to trade multiple markets. Ive traded the Russell in the past. Ive traded bonds. Ive traded crude, sometimes all at the same time.
Right now, the way Im trading its silver only. Im trading silver on a 233 tick, time frame in today and Im also trading options on silver and gold. And that market right now, for me, is doing phenomenal and I would encourage you to take a look. Some of the stats here on gold and silver for the year gold spend on a 10-year bull run. Most of you that are familiar with the metals know that. For the year, it ended up 30%, pretty good move on the year. And silver is on 84% on the year, almost three times as much. Thats why I like silver. Its definitely moving quite a bit more than gold. And just as a side note, copper up 33% on the year.
Commodities are generally up on the year that that youll hear some of the other coaches talk about the other commodities you can take a look at. I have a friend that has a plumbing business and its interesting he has a pile of copper in his warehouse and hes been waiting to sell that pile of copper for the opportune time and I think hes getting ready to do it. So thats one way to invest is in the physical. And so, again, thats just through the copper in there as a sign of like all the commodities on the year are up.
So lets take a look at a silver chart. This is a daily chart on silver for the year. You can see here at the start of 2010 we were in kind of a tightly bounded range of $5 range that we stuck in for most of the first six, seven months. And this was all very good trading through here, believe it or not. Even though, it was in this range, this $5 range, there are a lot of good moves on a daily basis. Then as we come out of summer and into the fall, we started to get hints of QE2 and for those that dont know thats Quantitative Easing 2, that was the -- what the Fed has done to hopefully stimulate the economy basically buying back our bonds. And so during this time frame right in here, we started to get hints of that. You can see very solid move to the upside and I remember trading this. It was hard to go short during this time frame. Every day was like power-up, you know, the accelerator was going to the upside.
And then finally on November 3rd, the Fed announced QE2 and when you look at this chart, that is a strong move to the upside. At some point here, you got to think that this price is going to consolidate, thats going to be one of my predictions here in a moment. Back to this QE2 event on November 3rd, it took -- I piled on some options here on gold and silver right on this part here. And I remember talking to Mark about that that the initial reaction when the Fed announced was down, silver and gold both shot to the downside. And I used the Seven Summits Trader method to get me into this trade, to the upside. You can see here lots of profits were -- I can tell you lots of profits were taken on these options over this five-day period. Then we get the snapback. I wasnt interested in shorting at this point and then we got another move to the upside. So again, puts more options on.
So my point here is, silver, a very good market moving very nicely. Its got some good range. Ill say over the last two days of intraday trading that the range has been a little tighter but I think thats the mode were in right now with this move to the upside, I think were going to see a little bit of consolidation, potentially a downward slope until the economy gives us or some external factors give us a reason for the market to either head higher or lower. And so thats kind of what Im personally doing at this point.
Just some things to keep in mind as we move forward into 2011 QE2 runs out in June. Theres already been a little bit of talk about whether the Fed will do QE3. So Id encourage you to watch for hints of QE3 just like back here in September, October, we started to get hints even the Feds started to hint that they were going to take that kind of action. If you see that, then you got to know that were going to head even further to the upside here on both gold and silver.
So as far as predictions go for me for the year, you know, my prediction would be on gold and silver that they will both end the year higher than where they are now. If I have to predict silver, Im going to say probably -- potentially $10 higher from here. And on gold, gold is currently at $1,379 just below the $1,400 level. I can see gold going up another 200 bucks on the year at some point. So well see.
Again, those are predictions and I want to stress that I dont let any of this information or predictions get in the way of my trading. I have a methodology that I trade. I use the Seven Summits Trader and I let that methodology read the price action and dictate the trades that I take. So I would encourage you to do the same whatever your method is. Dont let all of the outside influence all the predictions, you know, get in the way of your trading. Stick to your trade plan. So its my advice for the year and kind of what Ive been doing so well go on to the next coach which is Will.
Will Feibel: Hey, Brian. A couple of quick questions from --
Brian Short: Yeah.
Will Feibel: -- people. What times of day do you trade silver?
Brian Short: Oh, great, great question. Thanks a lot. I start trading at 8:00 in the morning. The pit opens at 8:20 and I find a lot of time shell start to get some pre-moves and sometimes you dont get anything. I will step aside for news at 8:30. If theres significant news at 8:30 i.e. nonfarm payroll, you know, some of the big red reports I will step aside. So I from 8:00 to 11:00 each day and the way Ive been trading is I trade the session. And so, I trade that in higher time. And in some cases, youve heard us talk about power of quitting where you get a couple of trades and youre done. I do trade that entire session.
So take a look, I think theres a lot of good price action. If you look back in time, youll see a lot of the moves happen in that 9:00 to 10:00 to 10:30 time frame. A lot of the price action for the day will happen right in there so thats why we target, thats why I personally target that time frame.
Will Feibel: Okay, a couple of more questions, what is QE2?
Brian Short: QE2 a good question, Quantitative Easing 2. Do a Google on it and theres a great cartoon that talks about it in more detail, but thats -- its the Feds way of printing money to buy back the dollar bonds that basically China doesnt want any more of. And what that -- what happens when that process is engaged is devalues our dollar. If the dollar goes down, what happens to the commodities? Commodities go up, that includes gold and silver, crude. Anything thats based on the dollar is going to typically head higher in that process. So if we see that happening again, QE3, then we know that most likely, these commodities are going to head higher and you can kind of make some plays on that if you so desire.
Will Feibel: From Mike, point value on silver?
Brian Short: Great question and I should have said that also. Silver is not for the beginning trader trading silver futures. I do believe Trey is going to give you -- everybody an option in the live training how to, you know, an option, a mechanism they can trade with lower risk but the point value is $25 per tick or $50 per point. The trade setups that I put on typically risk $1,000, okay? So you got to have a decent sized account to trade a contract of silver on the futures.
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