LAST BLOG OF THE YEAR

And the shortest one. Yesterday – Monday – the Dow closed at 16.504, which is new high again. This is the 51st record close in 2013. What a year!!! That was great year in Wall Street and we do hope is gonna be for the Main Street in 2014 either.

One of the nicest chart I have ever seen. This year we made more than 72%! So it is best time now to drink and celebrate.

http://www.marketwatch.com/story/5-things-you-dont-know-about-champagne-2013-12-30

Happy New Year Folks!

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

HOW TO LOSE MONEY ON GOLD

Easy. You only need to buy gold this January and holding still today. The SP500 gained this year 30% and gold lost the same percentage. Many of us well remember in the last couple of years how many times we heard the gold is a perfect investment for your savings, it is the perfect money haven. That is not true anymore. 30% is a brutal loss within a year, it is not a collapse, but might hurt much. The gold bubble has burst in 2013.

This year certainly started with expectations for 2,000usd, but now we are closer to 1,000usd. After 13 years long run, this year the price volatiled the trend and turned clearly south. 2013 is the first year since 2000 when the price went down on yearly basis. The long bull run is over. That 30% is the biggest annual lost since 1984. The popularity of gold is over, most of traders left the market only small investors are active, which is a clear indication of bearish sentiment.

Whata are the reasons? I have some ideas:

• 13 years is a long period, always needs to come correction after that long bull rally
• The stock markets got started gain again, no more scares about the recession
• Many investors looking for alternative investments, like property, shares or bitcoin 
• Tapering might mean smaller inflation too, which is bad for the value of gold
• The crisis is over

Technically all the support levels were taken this year, it was not a free fall, but consistent and steady. For the bulls, there is no bottom in sight from a technical viewpoint, just look at the chart:

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The BFM Assets Team.

GREEN BARS EVERYWHERE

Thursday continued the rally on US markets and in Japan. This morning all the European markets have opened with gap. The optimism is all around us. This is a real Xmas rally. Behind the green day in US might be the US the weekly jobless claim which fell by 42k to 338,000, that is surprisingly good data.

Historically, the markets might do abnormally high returns in the trading days around Xmas holidays. Why? First, the people are more emotional and more optimistic in these days than usually. Second, the funds try to maximize the tax benefits before the closure of the year. Third, most of the professional traders are on vacation and they are mostly on the seller side of the market.

Most of us are getting greedy:

But, what happens if there is nobody on the short side? Wast majority of American small investors are in euphoria. The bullish sentiment between them is the highest since 2007, the bearish are the lowest since 1987. The bull-bear spread has never been broader than now.

The change since last week is amazing:

• Bullish: +7.6
• Neutral: -1.1
• Bearish: -6.5

Datas reported by AAII: http://www.aaii.com/sentimentsurvey

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

COPPER BREAKOUT

The industrial commodity made a breakout on Tuesday on CME and after seven months left the consolidation area. This is the highest price - 3,378 - since 2013 May. In the first quarter the correction was brutal was around 30% and since this March the copper has been ranging only, until now. On Tuesday gained closely 2% the price. In the last couple of weeks the prices have marched higher backing by the strong US macros and big Chinese liquidity poured by Chinese authority. The biggest copper buyer in the world is US and the second is China.

The traders seem now they are quite bullish. Technically the copper left the range at 3,370 and the area is opened now up to 3,470 that can be first key resistance level. We found a reversal head and shoulder pattern on the weekly chart too, which is signal of bullish sentiment.

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

NIKKEI HITS 6 YEAR HIGH

Couple a month ago we forecasted a strong bullish rally on Nikkei, we built up in the last couple of months a group of long positions on Nikkei and we have made a nice profit on that. Our idea was the big arbitrage between the US markets and the legging Nikkei.

After a bank holiday Monday in Japan, tonight the Nikkei hit a 6 year high, the weak YEN is supported this movement. The index gained on year to date basis 53,8% and stays now at 15,903. The telecom shares were traded higher. Generally all Asian markets gained in the last couple of days like ASX or Shaghai Composite or Hang Seng.

Technically the Nikkei shows very healthy patterns. The dips are higher and higher and we had a breakout after 9 months consolidation a few days ago at 15.720. That resistance level has been violated the very first time since this April. The sky is opened now heading north. The next resistance is at 17,500. That can be our next summer middle range target.

We are still far far away from the historical top at 1989. The Japanese market has two lost decades, which seems more than enough and could be a great buying opportunity recently. Who knows?

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

SEAN HYMAN THE PASTOR WHO BECAME SUCCESSFUL TRADER

Thanks to Xmas today we are more Christian than normally, we introduce today the former pastor, Sean Hyman. He used to be a pastor and now he is a profitable trader but still believing in Jesus. He cites quotes from the Bible how being better trader. Stories about Jesus, Salomon, Peter ... etc. Like this Proverbs 14:15: “The naive will believe everything, but a wise man looks well into a matter.”

In his interpretation the Bible gives us quidelines for trading. If I understand him well his concept is the love of money is our biggest enemy and our greedy attitude is come from the devil. He states the money itself is not against the Bible, the love of money is against the Christianity. Unique and nonconventional theoretical view, but for him it is succesfull. On his page he is giving away his system for free.

Under this link there is a short interview with him: http://www.youtube.com/watch?v=MJXRaHsuMXE

And his presentation about his system: http://w3.newsmax.com/newsletters/uwr/video_money_code_intl.cfm?promo_code=146F3-1

He uses a triangle for analysis:

• Fundamental – for the big picture
• Technical – for timing
• Sentiment – RSIif above 30

He seems a smart and skilled trader and I love to see a christian believer who says the market is not from the devil it is part of our life and we can do it honestly, profitably and in human way at the same time.

Merry Christmas!

The BFM Assets Team.

PREDICT OR TRADE THE MARKET?

There are two kind of animals of investors. One is the trader and other one is the analyst who always forecasts and want to predict the future. I met a few years ago a super smart guy, who was the best analyst I have ever seen. But the problem was when he started to trade with real clients money he lost all the capital always. He was good at paperwork and his ideas were brilliants, but he couldn’t make money at all. He just didn’t trade, he forecasted and he believed always his predictions and stuck for them. Which did cost big money.

I know most of the companies, traders, investors, anchors, advisors ... etc. love to forecast and predict. Why? Two reasons. One is a marketing. They need to communicate and promote their services. So that is a business side. The other thing that they are convinced that what they trade is the best trade ever. I made thousands of predictions in my trading career and I was sure that I am right. This is the mental side of trading. We like to focus on the positive scenarios and ignore the risk of damage. In the last couple of years my attitude has totally changed and I don’t want to predict anymore, I only want to trade the market. I bet and see what happens.

Nowadays I found that everybody predicts for 2014 in terms of SP500, some forecaster says in 2014 the SP500 will be at 2014. This morning I saw a guy who said in 2014, the SP500 will hit the 1,890. Marc Faber a few days ago said in the interview SP500 will drop in 2014, 20% at least. Honestly all three guys are good and smart traders. Who is right? We don’t know obviously we can place the verdict only at the end of 2014. But I am sure about that they don’t have any crystal ball or holly grail. So, I am pretty sceptical, my thought is that all the forecasts are worthless. We don’t know anything about the future, we are all just guessing. Some prediction will closer some will be far from the reality.

As John Bogel once said „Nobody knows nothing” I love this quote. If you accept this statement you will never be disappointed if you lose. This is the part of the business. Try to never predict just trade and hope for the best, but plan for the worst. How can you do that? If you see a bullish market as now the SP500 just be bullish and stay in the profitable position as long as possible. Keep that position as high the market goes up. Believe me nobody knows where the top of the rally is.

The worst part of prediction that we like to listen to them. Cause we are frustrated about the unsure market conditions and moves and we love to find some guru or guidance. Don’t use any guidance just use your sober mind and make decision on your own ideas. Don’t listen to anybody because it is your money, your loss and your gain.

Have a good trade for 2014!

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

IT IS NOT A TAPERING, JUST A "T"

Yesterday announced the FED the tapering, I would say it is not a tapering it is just a "T." This is what about the market and investors scared about in the whole year. And, what happened? NOTHING. The Fed directors voted to reduce monthly asset purchases to $75 billion from $85 billion due to the improvement in the outlook for the US economy.

The market’s reaction was absolutely and really positive. US indexes are at new highs again at record levels. This investors don’t have any concerns about that 10 billion cut. As I expected few months earlier any kind of tapering was priced in already. Never forget the market always do what is the most unexpected. Now the FED did the same. This decision was against the biggest consensus of not tapering. The FED and Bernanke showed to the audience at his last yesterday meeting that there is middle way solution. Very slight tapering, but tapering – I would say a bit tightening.

Last night the US markets showed that doesn’t care about anymore about tapering. The market is hungry and focusing only for good news. The time has come where the good news are the good news. Remember, in this whole year the good macro news meant bad news for investors, because there was a fear about the tapering.

The short conclusion is that nothing to do anymore with the yesterday tapering. The other fact is that we are fully heading to the end of the year. So this combination with the pretty bullish trend is which was not violated means the markets will keep going up in December with a lower volume.

Technically the market right after the news jumped up and then dived for few minutes and headed north again and reached new record levels.

On SP500 chart as we forecasted on Monday the market made a clear break out up to the 1,810 key level. Shortly I am sure is gonna take out that key resistance level at 1,810 and going up further. Don’t forget this yesterday reaction proved again how bullish the market sentiment now.

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The BFM Assets Team.

BIG MONDAY RALLY

We never know the stocks rose by good economic data or it was driven only by the low pre-Xmas volume. The fundamental news was yesterday that the industrial production jumped 1.1% in November, far more than the 0.6% expected by economists. It seems to me by now the market interpret the good news as good news. Previously the news meant bad news for the investors. If they did hear any good news they got started to scare about the tapering.

It was the biggest rally in the US markets since end of September. It is surprising before the Wendesday FED meeting. Frankly I expected a quiet Monday and Tuesday. Last week was generally a losing week so this Monday rally was a good start. The SP500’s gain was led by technology and energy sector, which is a good signal.

SP500 +0,63% to 1,786
DJIA +0,82% to 15,884
Nasdaq +0,71% to 4,029

The question is the same on Wendesday which ruled the whole 2013 year. Tapering or not. $85 billion bond-buying stimulus program is under consideration on FED meeting.

Technically the SP500 from the bottom level (1,760) made a break out on Monday at 1,776. The real confirmation will come for the bullish trend if the 1,786 key level will be taken. If it breaks we can wait for back testing the pervious top at 1,810. Today could come a correction and quite trading day but tomorrow we have to fasten our seatbelts.

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

BUY LOW, SELL HIGH?

In other words buy when there is a fear on the market and sell at the euphoria. Is that simple to make money? YES. I do believe, but most of us cannot understand that.

I am watching each day for few hours the CNBC and Bloomberg TV and last week I saw the same symptom what I had seen plenty of times previously. Namely how fast could change the sentiment of investors. Last Monday everybody, all anchors and normal investors were absolutely bullish and by last Friday most of them got sceptical. Within five days the sentiment of the mass turned from bullish to bearish.

Here comes the point if we want to make money we have to different things than the others do. Cause if we do what the mass does we will be also in the 90% of speculators who are losing his all money. We have to be contrarian. As my 3 Letter Rule, my number one "ABC Rule of Trading" says "LWAYS BE CONTRARIAN."

Most of you has heard about the „6 Months Rule of Forex Market”. It says within 6 months 90% of the traders losing their whole capital. That is true, no argue. My statistic is a bit worse, my bet is between 95-98%. I analyzed that majority what they are doing wrong. I found they have 10 big mistakes. The biggest one is that they are following the mass and following the media. They are weak, they don’t have any trading plan and easily can be oriented or reoriented.

I am reading and watching news too, but only for seeing the sentiment of other investors. I don’t trade that what they think or do. I totally do of the opposite of that. For instance I love the AAII Sentiment Index. It tells me more about the market that any other hell of indicators. http://www.aaii.com/sentimentsurvey

This is a great sentiment marker to me. I am simply bullish when most of the traders are bearish and I am being bearish when the majority is bullish. I don’t want to be only a member of mass. I want to be a part of the minority of 2-5% who makes money constantly.

It pays to buy when everybody else is selling, and sell when everybody is buying. I know it is not a popular thing and you will be alone with your opinion, but I can assure you it will bring money for you in long-term. Honestly I do believe this is the only way to earn money in the markets.

What is your guess? It is a good opportunity to buy or not the SP500 below?

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

RED BARS EVERYWHERE

Yesterday, better to say in the last 3 days the US markets are dropping after hiting this week the SP500 the historic high. Heading south the Europeans and Asians too. The sentiments are not bad yet. The bearish and bullish investors are on the same level more or less. But the optimism has gone for a while. Most of the investors are waiting for the next week FED’s decision about the tapering or not. My bet is that no tapering.

Yesterday details:

SP500 -0,38% to 1,775

DJIA -0,66% to 15,739

Nasdaq -0,14% to 3,998. Since November 25 first time closed below the 4,000 key level.

The markets are now in quiet end of year mood. We have to wait for any significant move for the next week.

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

CORRECTION IDEAS

There is a common rule on the floor that each year needs to come a correction which must be bigger than 10%. The two digit drop has not came yet this year. Let’s take a closer look what means a correction on the markets.

In the matrix by Big Bicture, you can see the corrections are always with us. This is the part of the investment business. The size might be different. This year on SP500 the biggest drop was 7,52% os it was a “refreshing” type of correction. This a normal phase of markets. There is nothing special with that. Without these effects the markets cannot go up again.

If you look at this chart below, you will see in the last 4 years the biggest yearly drops. That is obviously a bullish market, but once a year happens a double digit drop. Which called "correction".

The point is that you shouldn’t have to be scared if you see like that. If the plunge is over the market could recover easily if the trend is still seems intact and not violated. The point is the timing, proper money management and being disciplined. If you aware of this correction patterns you will never be surprised and shocked if the market goes against you.

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

HOW LONG COULD THE MARKET GO UP?

Yesterday in an interview on CNBC Dennis Gartman said „Write this down. It will continue to go up until it stops”. http://video.cnbc.com/gallery/?play=1&video=3000225315

Great, great point. I am reading a bunch of smart guys, traders, analysts comment and forecast that the SP500 is gonna go up to 2.000 shortly or the target is 2014 for 2014. What I learned in my professional career that NOBODY, KNOWS NOTHING. These guys who are forecasting now the SP500 over 2.000 most of them were cry babies about the markets in the last couple of years and visioned the crash of the market in each quarter. Now they are the promoters of the rally.

All in all the most beautiful part of the trading is that we cannot be sure about anything and we are not able to predict anything. We are only guessing. In my interpretation as Gartman said, stay in the rally until the bullish market sentiment doesn’t change. Grab the bull and ride on that as far as possible. If some trend get started we never know where and how ends, but we have some canary in a coal mine. Namely some fundamental and technical indicators to watch.

The other issue is the next tapering gossip:
The market told me last week don’t sell on the tapering if comes. Against the good fundamental macro news the markets got higher last week. Made a biggest and strongest one day rally in a month. Nobody scared about the plenty of good news which push the FED into the tapering way. In my view if we see some tapering or tightening next week by FED won’t have a huge effect on the markets. It is built already in the prices. Tapering is less of an issue recently. The taper worries rules the whole years of 2012 and 2013. It seems to me is over. Look at the optimism of SP500. This is a bull chart, isn’t it?

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

THE US ECONOMY IS NOT IN CRISIS MOOD

Last week we have had some good news regarding the US economy, which might be a good indicator for FED tapering or not. Seems the economy is in good shape so as the rumour says on the market comes the tapering or tightening next week. Last Friday the market made the biggest daily gain within a month. So the bulls are still out there. My guess is that we don’t need yet the canary in a coal mine.

The good macros were the followings:

• 7% unemployment rate from 7,3%
• Hourly wages up with 4cent, +2% YTD
• US GDP jumped up to 3%

Monday jumped a bit again the US stocks. SP500 gained close the record level. The market didn’t have any concerns about the stimulus reduction gossips probably next week. It seems the market ignoring that news and only focuses on the fundamentals.

SP500 +0,18% to 1.808
DJIA +0,03% to 16.025

Nasdaq +0,15% to 4.068

The European markets specially FTSE still lagging. In the whole November and December couldn’t get up higher just plunges without any new record.

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

SOME WISDOMS FROM WARREN BUFFET

I am not kind of the person who is crazy about Warren Buffet as the new runner investors and the media are. But I have found some pretty remarkable rules from him. He is not the prototype of speculator but a perfect prototype of investor.

The “Oracle of Omaha” is a buy and hold investor and that made him close the richest man on the planet. In point of trading I listed some of his wisdoms below:

1. It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.
2. Risk comes from not knowing what you’re doing.
3. I never attempt to by saveshare" target="_blank">make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
4. We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful
5. Time is the friend of the wonderful business, the enemy of the mediocre.
6. Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, “I can calculate the movement of the stars, but not the madness of men.” If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.
7. If I ever write a book, it will be titled ’why smart people do stupid things’.
8. History does not tell you the probability of future financial events happening.
9. The best buys have been when the number almost tell you not to
10. We don’t spend any time looking back at Berkshire. There’s so much to look forward to that it just doesn’t make sense to look behind. You can only live life forward.

Take a look at our Swiss fund and begin to invest with us! 

The BFM Assets Team.

THAT 2000 NASDAQ 4.000 IS DIFFERENT FROM THE RECENT 4.000?

Yes, no doubt. After 13 years the Nasdaq hit again the 4.000 level. Made a nice gain over 35% this year. The question for me was how is that possible to compare the two period 1999 and 2013. And I found some remarkable differences which has been changed since 2000 inside the Nasdaq.

1. At 2000 Nasdaq were merely tech index almost. Now underrepresented the tech companies, they are under 60% from the composite. So now it is a broader index than ever was.
2. At the .COM bubble huge majory of companies were not profitable at all. The P/E ration did not exist at many cases. That is not true today.
3. There were many hot tech companies without any profit. That is not true today.
4. Look at the profitability of Google. This is profitable company and price is over 1k per share. So now the index is much more reasonable priced than at 2000.
5. The market generally is not yet so pricey as it was 13 years ago.

The Nasdaq is the best performer index in US. Beat SP500, DJIA and Russell. And, we see the first break out after 13 years. The upside seems much stronger than the short side.

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

SELL OFF AND CORRECTION ON MONDAY

US indexes plunged yesterday. The rally stopped for a while. The markets are still close to record highs, but in a short term can possibly come some correction day in short term basis. This pullback is the part of cycles. But the bottomline is still that the markets are bullish. The fundamentals are positive.

• S&P500 fell 0.3%, to 1,800
• DJIA -0.48%  to 16,008
• Nasdaq -0.36% to 4,045

Only three weeks left from this year so the volume is going to be downcreased shortly. I don’t expect big movements in the rest weeks. This year all in all was a great year for the markets SP500 gained more than 25%, Nasdaq 44%, Dow 23%. And, all are on historical highs.

The European markets are lagging, but day by day come good fundamental news from Europe. Today the Spanish unemployment report is far better than was expected

Do we have a Xmas rally this year? I don’t have a faintest idea. We will see that.

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.

SOME BITCOIN UPDATES

One of my friend wrote me yesterday a mail and he mentioned he bought this May Bitcoin for 200USD which worths now around 2.000USD. He is happy with that obviously but he mentioned if he had bought at 2010 now his 200USD might worth now around 2M. That is crazy.

-         Parity with an ounce of gold. The Bitcoin on  Friday was over the first time in the History above the gold price. The cross was at 1242.

-         UK Royal Mint has been working on plans since this summer to issue physical Bitcoins in collaboration with the Channel Island of Alderney

-          Over 400 online retailers started last Friday offering special deals just for Bitcoin users

-          Now you are able to buy ticket to space on Virgin Atlantic

-          Single bitcoin's value hit $1,000 last week

-          Now the price is around 1.022USD

Here is a great story about Bitcoin by BBC: http://www.bbc.co.uk/news/uk-wales-south-east-wales-25134289

Take a look at our Swiss fund and begin to invest with us!

The BFM Assets Team.