April 1, 2012

Dan Shy

dan.shy@gmail.com

IN FOCUS:
Trading Focus and Goals

State of Dividend Investing

For the last few weeks, I've been here and there and everywhere.

I've been trading Micro-Forex. Missed quite a few opportunities in Commodity Futures. I've been in Mexico. I've been in the United States. I've been in Mexico again. One of the advantages of this business is the freedom that it affords you. Of course, like any freedom, there is an associated cost. I say the above, to say that while I have enjoyed the freedom of moving between Mexico and the United States I feel my investing and trading 'focus' is beginning to suffer. I have not really had the opportunity to really sit and focus on investing and trading for an extended period of time. So that is to say that for the next few months, I'm going to be concentrating on my investing and trading efforts. Profits. Making money. I hope to have the instructions on connecting to the new Ventrilo Voice Server in the next week. So keep your eyes peeled for that.

Trading Outlook

Summary of A.M.B. Model Portfolio

State of Dividend Investing

As far as equities and the stock market we have now almost reach 1% gain year to date in the very, very small dividend investing account for this newsletter. Not bad considering that when we began that account, we only began with $4,000.00, and the balance on January 1, 2012 of this year was $4,056.86. So the 1% gain is this years gains. Since inception of that account, we are up 2.248%. Of course, some of these gains are unrealized. But it demonstrates that even for a dividend investing account that is very small ... a) Gains will take some time to build. I have mentioned this many times in the past. Yet at the same time ... b) We are beginning to see that patience and discipline is paying off. That's not to say we won't experience some drawdown at some point. Unrealized gains can reverse course, with the flows of the market.

April 1, 2012

Even though we are waiting to reach $10,700.00 in the larger trading account before we engage in another redistribution of capital to give the Dividend Investing Sister account more capital, we can see that the aforementioned patience and discipline is beginning to pay off, and DRIP is starting to do it's work. I state each and every week in the Note that proceeds the summary of the A.M.B. Model Portfolio It is my intent to demonstrate how to grow the size of these positions from 2 shares, to 300 shares using the three sister portfolio management style This is the process. This is how it works.

bias. On the day I was leaving the United States in fact, the very hour that the wife and I began the drive I mentioned that I loved that are of Crude Oil for a long. That trade would have worked out well in the futures market ... May Crude Oil 10 Minute Chart Wednesday Mid Day

Trading Outlook:
Note: By way of reminder, since the Model Portfolio has only $10,188.88 in the Commodity Futures and Stock Trading portion of the portfolio, there will only be 'brief day trades' at this stage of the game for Commodity Futures trading in order to escape the risk of over-leveraged gap opens in the commodity futures markets. This is an attempt to demonstrate how account size relates to trading style. As I mention in my methodology series1, as the 'trading sister' reaches $30,000 I will graduate the account into 'swing-trading' and demonstrate how I would go about doing this. Stock trades may last more than one day. The Forex account has $67.12 and is considered a micro-forex account for the purposes of the model portfolio.

But that was then. As I often tell Futures traders if you have to day trade then groom those stops, lock in profits, and wait for the market to move. That would have worked out well in this case because shortly thereafter, the Crude Oil market then quickly fell apart. May Crude Oil 10 Minute Chart Wednesday to Friday

I'll begin by saying that as of this night, I'll be going to bed in a few minutes, planning to awake early to post to the restricted area of the No Nonsense Trading Forums for subscribers. So thoughts that I post here should be with that in mind

Commodity Futures Trading Thoughts

Commodity Market #1 May Crude Oil (CLK12 or /CLK2 in ThinkorSwim. USO for the imperfect ETF ): Last Week I was long on Crude Oil. That was the overall
1 Exact Link http://nononsensetrading.com/methodology.html

Actually, this is a case where you could have had a win for the Futures trade, and a loss on the USO call

April 1, 2012
long. I had neither, since as I mentioned I was traveling. I should state that if had owned that USO call option, by $104.50 it should have been dumped out of. So what now? Well, the chart above tells me to look at the $102.00 to $102.50 region. That's the region of our cupport, and what I'll be watching. And as I always monitor multiple time frames, it's also advantageous to note that this is a price level of support on the daily time frame May Crude Oil Daily Chart For larger accounts, this would mean an outright futures position. I also will not be averse to trying my hand a USO Call option for an account the size of A.M.B. I'll just need to see some price congestion, the $102.00 region hold, and then the price begin to move higher. Keep your eyes peeled to the No Nonsense Trading Forums in the subscribers section. That will let you know what action I'm looking at taking ... Futures Market #2 June Japanese Yen Futures (JPM12 or /6JM2 in ThinkorSwim): I am looking at this market for a long opportunity. The 0.012 region looks like a firm basis of support, so I'm looking for a bounce higher at this point. Any points of congestion (such are forming at the time of this writing at 10:34 pm Mexico Central Time), I will look to buy on breaks higher, as long as that 0.012 region holds as a basis of support.

Which reaffirms to me that the $102.00 region, from the 100 period exponential moving average (ema) is a price region of support. We also notice that the overall trend is up. In essence, what we have here? This is what we call a 'dip'. Seasonally, the Crude Oil market is strong from April 1st to April 30th. Not good news for the price we pay for gasoline at the pump. But it does give us an 'edge' for a trade. So at this point, I'm still not averse to having a 'long' buying position. But I want to see if that $102.00 price region holds. I will watch the overnight markets to see if that happens.

I'm also eyeing up the Silver market. But before I discuss my thoughts, one way or the other I just want to watch that market. The date for the seasonal move is a few days away, towards the end of the week. And technically, the market looks a bit 'messy' at the moment. It may be a bit pre-mature to state anything one way or the other at this point.

Forex Market Methodology Creation

Actually, if you tune in to the Forums tomorrow morning, I may have further Forex thoughts. I'm somewhat hesitant to write regarding Forex thoughts on a Sunday night considering the fact that part of my methodology states that I will not be trading the opening hours of the Forex market. In addition, I trade mean reversions and with trend. So anything that I see tonight may well change by tomorrow morning.

April 1, 2012

Summary of the A.M.B. Model Portfolio

Note: In the beginning of this hypothetical portfolio, the share purchases of the Dividend Investing 'Sister' will be extremely small. It is my intent to demonstrate how to grow the size of these positions from 2 shares, to 300 shares using the three sisters portfolio management style. It is also understood that readers of this newsletter have a firm understanding of my 'three sisters' portfolio management system (See the Special Reference issue of Aileron Market Balance2 for an explanation of this system).

8 shares at $32.39 on 12/22/2011 w/ $5.01 Commissions 0.081305 shares DRIP at $34.93 on 3/23/2012

Cash: $3,000.61 ( 73.37 % )

Percentages of that Cash - $2,680.61 of this cash I reserve for 'maneuvering' capital / hedging / new purchases ( 89.34 % ) -$80.00 of this cash I reserve to Dollar Cost Average PEP further in the future ( 2.66 % ) -$80.00 of this cash I reserve to Dollar Cost Average PG further in the future ( 2.66 % ) -$80.00 of this cash I reserve to Dollar Cost Average JNJ further in the future ( 2.66 % ) -$80.00 of this cash I reserve to Dollar Cost Average WM further in the future ( 2.66 % )

$505.14 ( 12.35 % of this account ) available from Slush Fund S&P 500 Year to Date: +11.88 % AMB Total Portfolio Return Year to Date: + 5.192 % Another Dividend was paid out last week. Pepsi-Cola (PEP) paid a dividend, and the dividend was DRIP'd for the purposes of this Model Portfolio. And somehow, in the midst of the craziness in the last two weeks, I missed that Waste Management (WM) paid a dividend. I have noted the numbers for both stocks below ... Dividend Investing Sister Inception to Date

Investing Account Balance: $4,089.91 Return / Yield up +0.8149 % Year to date 4.063508 shares of PEP (DRIP on Yield is 3.13 % )
4 shares at $63.31 on 11/15/2011 w/ $5.01 Commissions 0.032263 shares DRIP at $66.95 on 1/3/2012 0.032145 shares DRIP at $66.25 on 3/30/2012

Stock / Futures / Forex Trading Balance: $10,255.74 ( Return / Yield up + 8.111 % Year to Date ) I personally had no commodity futures trades last week, as you can see on the No Nonsense Trading Forums. Commodity Futures Balance: $10,188.88 Return / Yield up +8.184 % Year to Date Next Re-Distribution Goal: $10,700.00 Original 3% risk tolerance gives us approximately $282.54 for my drawdown tolerance. $505.14 available from Slush Fund

4.032392 shares of PG (DRIP on Yield is 3.12 % )

4 shares at $61.94 on 11/28/2011 w/ $5.01 Commissions 0.32392 shares DRIP at $64.83 on 2/15/2012

4.035 shares of JNJ (DRIP on Yield is 3.46 %)

4 shares at $62.31 on 11/28/2011 w/ $5.01 Commissions 0.035 shares at $65.14 on 3/13/2012

8.081305 shares of WM (DRIP on Yield is 4.06 % )

2 Exact Link http://www.scribd.com/doc/73238645/Aileron-MarketBalance-Special-Reference-Issue-Portfolio-Management

April 1, 2012
My current money management stats Micro-Forex money management stats

Forex 'Sister' Account Inception to Date Futures 'Sister' Account Inception to Date

The exact trades listed from last week, that I discussed on the No Nonsense Trading Forums ... Micro-Forex Balance: $66.86 Return / Yield -2.008 % Year to Date $505.14 available from Slush Fund

Short 170 EUR/USD @ 1.3339(5) on 3/26/2012 Exit 170 @ 1.3339(5) LOSS of 21.1 Pips $0.3587 Short 170 EUR?USD @ 1.3348(3) on 3/26/2012 Exit 170 @ 1.3348(3) PROFIT of 5.7 Pips $0.0969

April 1, 2012
There was an interest payment to the Savings SidePocket Account Balance on the last day of March. A portion of this was placed in the Getting Paid fund. The rest was split up amongst the savings side-pocket account itself. That has been noted below.
at 0.50% - One $10.00 One Year CD Purchase on 2/21/2012 at 0.50% - One $10.00 One Year CD Purchase on 3/21/2012 at 0.50% $20.00 of this cash reserved for the first side-pocket purchase ( 1.98 % ) $20.00 of this cash I reserve for the second sidepocket purchase ( 1.98 % ) $36.00 of this cash I reserve for the hedging account ( 3.563 % )

Savings Side-Pocket Account Balance: $2,033.37 Return / Yield up +0.2959 % Year to Date $505.14 for a Slush fund / Drawdown Kill Switch fund $1,010.29 for a Base Savings
Percentages of that Cash:

$505.14 for Emergency Savings Getting Paid Fund: $12.80

$814.29 of this cash reserved for 'burn rate / maneuvering' capital ( 80.60 % ) $120.00 of this cash reserved for CD Ladder creation ( 11.88 % ) - One $10.00 One Year CD purchased on 11/21/2011 at 0.60% - One $10.00 One Year CD Purchase on 12/21/2011 at 0.50% - One $10.00 One Year CD Purchase on 1/21/2012

Total Portfolio Balance: $16,379.02 - Total Inception to Date Return: +9.193 % Return / Yield up + 5.192 % year to date) S&P 500 Year to Date: +11.88 %

If you have any questions regarding my personal outlook, or any other comments, please feel free to contact me at dan.shy@gmail.com. I will say that if you have questions about your own trading and you want to ask for my input? Please include your most recent money management performance statistics in any email correspondence.
Until next time, stay safe trade well, and remember that loving other people doesn't cost a dime.
Note: I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. The above statements should not be construed as an investment or trading recommendation. Aileron Market Balance is a newsletter that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this newsletter; as larger accounts may require a different strategy as the ones presented here. Any trades or investments that I discuss within this newsletter are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. This newsletter simply contains my trading and investing thoughts for the next week. I personally only enter any market after watching and reading the tape and I trade using money management principles3. The losses in trading can be very real, and depending on the investment vehicle and market, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 15 years of experience in trading and investing in these markets. The Model Portfolio accounts are hypothetical accounts,with all of the inherent problems therein, which are used within this newsletter in an attempt to track the results of this newsletter, and is run for the education of other traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this newsletter are believed to be public domain. Any charts that are displayed using the ThinkorSwim platform, and other pictures were obtained through Wikipedia's public domain policy.

Exact Link - http://nononsensetrading.com/MoneyManagement.html