May 6, 2012

Investing Outlook Outlook:

Note: As a reminder. 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. The Dividend Investing 'Sister' Account will also implement the Permanent Portfolio Method beginning in 2012 with $1,120.00 of the cash dedicated towards it.

Permanent Portfolio: As stated in the audio file, I want to hold off on adding the GLD until at least June 15th, 2012.

Aileron Market Balance

Issue 27
Visit Us: NoNonsenseTrading.com Email: aileronmarketbalance@gmail.com

At the same time, we've begun to receive dividends on the TLT and SHY, as noted in the portfolio numbers. No further dividend investing purchases this next week, as noted in the audio comments.

Trading Outlook:
Note: By way of reminder, since the Model Portfolio has only $10,148.98 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' approaches $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 $66.02 and is considered a micro-forex account for the purposes of the model portfolio.

Each

newsletter on Sunday that will contain my thoughts for the week ahead will have an audio file that accompanies it. The audio file that is associated with this PDF will contain my detailed thoughts moving forward into the next week. This PDF file is meant to serve as a rough, general outline to the audio file that many subscribers are finding more advantageous.

Moving Forward
Last week I got rocked, and I got rocked hard. At least for me. I knocked off 2.8% of gains in one day of trading. Which makes that the worst trading day in about two years for me. But this is No Nonsense trading. I don't shovel a line of 'bologna' at anyone, nor do I hide the losses. We have a plan for such contingencies, and we implemented that plan.

Commodity Futures Trading Thoughts

Commodity Futures Market #1 July Sugar (SBN12 or /SBN2 in ThinkorSwim): I will continue to observe Sugar. But I will be wary about a long at just this point. I passed up three greatly profitable trades, simply because I chose to focus in on this market a little too much. So at this point, Sugar opens up at 3:00 am e.s.t. I will watch the open Monday morning, which means that I will be in the Ventrilo Voice Server very early. I will wait to see if we have a slight pullback in prices. Then congestion, and then if we begin to have a good tape at
1 Exact Link http://nononsensetrading.com/methodology.html

May 6, 2012
that support? Well perhaps. I'll just have to wait, watch, and will post my thoughts on the Forums, and speak of them in Ventrilo. Commodity Futures Market #2 July Soybeans (SN12 or /ZSN2 in ThinkorSwim): I am looking for a short in July Soybeans. 1475 to 1480 provides our first level of resistance, to look for congestion. If the market moves higher than 1475 to 1480, then the 1500 region is the next area to begin looking for congestion to short. Commodity Futures Market #3 July Silver (SIN2 or /ZSIN2 in ThinkorSwim for Larger Accounts. For AMB SLV Puts): I am looking for a short in Silver. But before that happens, I would need to see the prices rally just a bit. Preferably to the $31.75 Region. For larger accounts, there is a short there I believe, and for smaller accounts like A.M.B., then SLV Puts could be used. This move generally lasts until June 15th. Commodity Futures Market #4 July Corn (CN12 or /ZCN2 in ThinkorSwim): Again, I am looking for shorting opportunities in July Corn. A messy rally has begun on the Daily Chart. But this is typical for this time of year, and May 9 th generally sees lower prices until May 27 th. So I'll watch this market for a short opportunity. At this point, the chart is just too messy. So I'll wait for some sort of clear picture to emerge. Commodity Futures Market #5 July Wheat (WN12 or /ZWN2 in ThinkorSwim): Again, I am looking for shorting opportunities in July Wheat. But I'd need to see a three or four day rally before I do this. We're too extended on the chart. If a rally develops by May 10th or May 12th, then I would look for congestion to short.

Forex Market Methodology Creation

Stay tuned to my thoughts tomorrow, Monday morning regarding possible Forex trades. I will allow the London open to occur first, before I begin looking for trades.

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 Balance 2 for an explanation of this system).

S&P 500 Year to Date: +8.757 % AMB Total Portfolio Return Year to Date: + 3.083 % Investing Account Balance: $4,039.07 Return / Yield up 0.4383 % Year to date 4.063508 shares of PEP (DRIP on Yield is 3.16 % )
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

4.032392 shares of PG (DRIP on Yield is 3.27 % )

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 3.52 %)

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 4.18 % )

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

Permanent Portfolio $1,120.00 of this cash I reserve for Permanent Portfolio Purchases
2 Exact Link http://www.scribd.com/doc/73238645/Aileron-MarketBalance-Special-Reference-Issue-Portfolio-Management

May 6, 2012
Return from $1048.85 = - 0.4933 %
- $280.00 Reserved for GLD position (Currently $280.00) ( 26.7 % of P.P) - 2 shares @ 139.58 of SPY ( $279.16) (Currently $274.036) ( 26.13 % of P.P) - 2 shares @ 118.17 of TLT ( $236.34) (Currently $236.26) ( 22.53 % of P.P) - 3 shares @ 84.45 of SHY ( $253.35) (Currently $253.38) ( 24.16 % of P.P) Upon the next re-balance SHY will instead work as pure cash

Stock / Futures / Forex Trading Balance: $10,215.00 ( Return / Yield up + 7.681 % Year to Date ) As I've mentioned I got rocked in the last week. 4 losses this week, in addition to the 3 before that. 7 Losses in a row now.
Long 1 SBN2 from 21.40 to 21.33 LOSS - $85.40 on 4/30/2012 (including commissions of $7.00) Long 1 SBN2 from 21.36 to 21.31 LOSS - $63.00 on 4/30/2012 (including commissions of $7.00) Long 1 SBN2 from 21.40 to 21.33 LOSS - $85.40 on 4/30/2012 (including commissions of $7.00) USING DRAWDOWN SLUSH FUND OF $238.80 Long 1 SBN2 from 20.62 to 20.55 LOSS - $85.40 on 4/30/2012 (including commissions of $7.00)

Remaining Cash: $1,932.38 ( 47.83 % )

Received TLT Dividend of $0.57 Received SHY Dividend of $0.08
Percentages of that Cash -$1,618.38 of this Maneuvering Capital I reserve for Hedging and New Purchases ( 83.75 % ) -$80.00 of this Maneuvering Capital I reserve to Dollar Cost Average PEP further in the future ( 4.141 % ) DCA Price on PEP - $60.00 -$80.00 of this cash I reserve to Dollar Cost Average PG further in the future ( 4.141 % ) DCA Price on PG- $58.00 -$80.00 of this cash I reserve to Dollar Cost Average JNJ further in the future ( 4.141 % ) DCA Price on JNJ - $59.00 -$80.00 of this cash I reserve to Dollar Cost Average WM further in the future ( 4.141 % ) DCA Price on WM - $28.00

As you can then see, we then transferred from the slush fund / Drawdown Kill-Switch in the savings side-pocket $238.80 to the trading account. So when I calculate yield from January 1st, I calculate the $9,418.08, and then add on $238.80. So I calculate the yield from $9,656.88. We were up 8.614 %. We're now only up 5.096% Commodity Futures and Stock Balance: $10,148.98 Return / Yield up + 5.096 % Year to Date (Yield calculated on beg. Balance + additions) Next Re-Distribution Goal: $10,700.00 Original 3% risk tolerance gives us approximately $282.54 for my drawdown tolerance. $268.34 available from Slush Fund Futures 'Sister' Account Year to Date

$268.34 ( 6.644 % of this account ) available from Slush Fund Dividend Investing Sister Year to Date

May 6, 2012
My current money management stats for that account is .

Micro-Forex money management stats

Forex 'Sister' Account Year to Date We also had a few of Micro-Forex trades that ended in a small approximate $0.01 profit for the week

Long 88 GBP/JPY @ 129.65(5) on 4/30/2012 Exit 88 @ 129.68(4) - PROFIT of 2.9 Pips - $0.0319 Long 100 EUR/USD @ 1.3144(5) on 5/2/2012 Exit 100 @ 1.3149(7) PROFIT of 5.2 Pips - $0.0520 Long 115 USD/JPY @ 79.90(8) on 5/4/2012 Exit 115 @ 79.83(8) LOSS of 7 Pips - $0.1008 Long 115 USD/JPY @ 79.84(5) on 5/4/2012 Exit 115 @ 79.86(8) PROFIT of 2.3 Pips - $0.0331

Micro-Forex Balance: $66.02 Return / Yield -3.239 % Year to Date Return / Yield since Reboot + 0.64 % $268.34 available from Slush Fund

May 6, 2012
Forex Capital Graph Since Reboot
$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 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% - One $10.00 One Year CD Purchase on 4/21/2012 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: $1,796.57 Capital is -11.43 % Year to Date (Return different) $2.00 Interest end of April is applied to Slush Fund / Drawdown Kill Switch Fund $268.34 for a Slush fund / Drawdown Kill Switch fund $1,010.29 for a Base Savings
Percentages of that Cash: $814.29 of this cash reserved for Long Term Variable Capital PP - ( 80.60 % )

$505.14 for Emergency Savings Getting Paid Fund: $12.80 Total Portfolio Balance: $16,050.64 - Total Inception to Date Return: + 7.004 % Return / Yield up + 3.083 % year to date) S&P 500 Year to Date: +8.757 %

If you have any questions regarding my personal outlook, or any other comments, please feel free to contact me at dan.shy@gmail.com or aileronmarketbalance@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. I discuss which trades I take and do not take on the No Nonsense Trading Forums, as well as the Ventrilo Voice Server. 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

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

May 6, 2012
initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 16 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.