June 24, 2012

(Referred to popularly as QE3).

Instead, the Fed will extend Operation Twist in which they will attempt to lessen the short term debt in the open market, by selling (sending the yield higher on short term bonds) and buying longer term debt, thereby lowering the yield on longer term bonds. The market took this news, and sold off 32 points on Thursday, rebounding somewhat on Friday. The Credit Markets continue in an upward trend, looking at the daily chart.

Aileron Market Balance

Issue 34
Visit Us: NoNonsenseTrading.com Email: aileronmarketbalance@gmail.com

Therefore, my comments from the Week in Review podcast1 remain. Until I see the credit markets on the 10 year lighten up, I am not a long term buyer of stocks at this point. As we approach June 30 th, I may watch for a seasonal 'buy point' for stocks.

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. To bulletpoint the current situation The problems in Europe remain, and they are getting worse as problem countries yields increase, and austerity measures are enforced. Policty decisions are accelerating the deflationary trap that Europe is mired within. CPI and PPI numbers in the U.S. showed a decrease M/o/M, and are now not only are economic indicators slowing, but they are showing signs of deflation The Fed has met, and announced there will be no further rounds of Asset purchases

Investing 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.

No further dividend purchases are planned in the upcoming week. The DRIP is off on all stocks. Dividends received will be in the form of straight cash. As mentioned last week, I will take half of all dividends, and send them to the Savings Side-Pocket account, and that cash will be applied to the Slush fund / Drawdown Kill Switch fund . For Procter & Gamble (PG) and larger holdings, it may be time to think about LEAPS and figuring out how to use Puts for protecting against tail risk. The permanent portfolio section of this account has been built, and now will be managed on a longer term basis. I currently have a 3 point spread over normal permanent portfolio.
1 Exact Link - http://www.youtube.com/watch? v=VOVY9mIjp_w

June 24, 2012

Trading Outlook:
Note: By way of reminder, since the Model Portfolio has only $10,060.87 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 series2, as the commodity '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 $65.42 and is considered a micro-forex account for the purposes of the model portfolio.

looking to trade. This is a market I'm looking to monitor as a barometer of the worldwide auction and worldwide recession. There are no other commodities that I'm looking to trade at this time, since economic concerns are trumping my commodity futures trading methodology.

Micro-Forex Trading Thoughts

Stay tuned to the Forums. Possible short is USD/CHF this morning at 8:33 am est. I've updated the forums and sent out an email.

Possible Stock and ETF Trading Thoughts

As I stated earlier in the audio file, I am holding until I see a possible long position develop. But I have my list of stocks that I would be looking for entrances, if I feel it's time to get bullish and we have a small bounce that I can trade long on the 'chop'. Those stocks are: CLF STX CE ACM CNQ GOOG And to a lesser extent ... SNDK JEC MRVL

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 3 for an explanation of this system).

S&P 500 Year to Date: + 6.05 % AMB Total Portfolio Return Year to Date: + X.XX % Investing Account Balance: $4,026.75 Return / Yield up 0.7119 % Year to date 4.063508 shares of PEP (DRIP off 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 Next Dividend: 6/29/2012 Pay Date

Commodity Trading Thoughts

July and September Crude Oil (CLN12 or /CLN2 and CLU12 or /CLU2): This is not a market I'm
2 Exact Link http://nononsensetrading.com/methodology.html

4.0676 shares of PG (DRIP off Yield is 3.76 % )

4 shares at $61.94 on 11/28/2011 w/ $5.01 Commissions

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

June 24, 2012

0.32392 shares DRIP at $64.83 on 2/15/2012 0.35208 shares DRIP at $64.19 on 5/15/2012 Next Dividend: Not yet announced

Dividend Investing Sister Year to Date

4.035 shares of JNJ (DRIP off Yield is 3.66 % )

4 shares at $62.31 on 11/28/2011 w/ $5.01 Commissions 0.035 shares at $65.14 on 3/13/2012 $2.46 in Cash on 6/12/2012 Sent $1.23 to Sav. Side-Pocket Next Dividend: Not yet announced

8.081305 shares of WM (DRIP off Yield is 4.39 % )

8 shares at $32.39 on 12/22/2011 w/ $5.01 Commissions 0.081305 shares DRIP at $34.93 on 3/23/2012 $2.86 in Cash on 6/22/2012 Sent $1.43 to Sav. Side-Pocket Next Dividend: Not yet announced

Permanent Portfolio $1,120.00 of cash I reserved for Permanent Portfolio Purchases Return from $1082.72 = 0.57 %
- $2 shares @ 156.12 of GLD ( $312.24 ) ( Currently $305.28 ) ( 28.36 % of P.P ) - 2 shares @ 139.58 of SPY ( $279.16 ) ( Currently $266.84 ) ( 24.79 % of P.P ) - 2 shares @ 118.17 of TLT ( $236.34) ( Currently $250.04 ) ( 23.23 % of P.P ) - 3 shares @ 84.45 of SHY ( $253.35) (Currently $253.14 ) ( 23.51 % of P.P ) Upon the next re-balance SHY will instead work as pure cash

The trading section will include the trades of Monday, June 25, 2012, and will Mark to Market the STX trade. Total Trading Balance: $10,125.77 ( Return / Yield up + 4.12 % Year to Date ) Commodity Futures and Stock Balance: $10,060.37 Return / Yield up + 4.183 % Year to Date Next Re-Distribution Goal: $10,700.00 Original 3% risk tolerance gives us approximately $282.54 for my drawdown tolerance ALREADY USED $ 273.00 available from Slush Fund I had a few trades last week, and still have the SH position on, marked to market, resulting in a net positive week ...

Remaining Cash: $1,898.41 ( 47.14 % )

- $1.43 of WM Dividend remains in account, $1.43 transferred to the Savings Side-Pocket
Percentages of that Cash -$1,578.41 of this Maneuvering Capital I reserve for Hedging and New Purchases ( 83.14 % ) -$80.00 of this Maneuvering Capital I reserve to Dollar Cost Average PEP further in the future ( 4.214 % ) DCA Price on PEP - $60.00 -$80.00 of this cash I reserve to Dollar Cost Average PG further in the future ( 4.214 % ) DCA Price on PG- $58.00 -$80.00 of this cash I reserve to Dollar Cost Average JNJ further in the future ( 4.214 % ) DCA Price on JNJ - $59.00 -$80.00 of this cash I reserve to Dollar Cost Average WM further in the future ( 4.214 % ) DCA Price on WM - $28.00

Courtesy Credit on 6/14/2012 of $0.01 Long 38 SH at 37.46 on 6/11/2012 to 36.96 on

6/18/2012 LOSS - $39.02 (including commissions of $20.02 )

$273.00 ( 6.78 % of this account ) available from Slush Fund

Courtesy Credit on 6/21/2012 of $0.02

June 24, 2012 Short 300 CECO at 5.90 on 6/20/2012 to 5.79 on

6/25/2012 PROFIT - $12.96 (including commissions of $20.04 )

My current money management stats after the trade last week

Long 1 July 25 DV Put at .48 on 6/21/2012 to .35

on 6/25/2012 LOSS - $34.53 ( including commissions of $21.53 )

Long 100 DV at 27.59 on 6/20/2012 to 27.03 on

6/25/2012 LOSS - $76.06 ( including commissions of $20.06 )

Long 100 CLF from 45.40 to 45.65 on 6/24/2012

PROFIT - $14.89 (including commissions of $10.11)

Long 110 STX from 23.25 Mark to After Market

of $24.57 UNREALIZED GAIN of $145.20

Futures 'Sister' Account Year to Date

June 24, 2012

Micro-Forex Balance: $65.39 Return / Yield -4.162 % Year to Date Phase 2 Return: 0.18 % Phase 3 Return: -0.484 % $ 273.00 available from Slush Fund And the money management stats .

I had a few Micro-Forex trades last week as well as one today ...

Short 20 EUR/USD @ 1.2614(9) on 6/18/2012

Exit 20 @ 1.2600(1) PROFIT of 14.79 Pips $0.0296

Short 70 AUD/USD @ 1.0112(3) on 6/18/2012

Exit 70 @ 1.0123(5) LOSS of 11.2 Pips $0.0784

Short 70 USD/CHF @ 0.9505(4) on 6/19/2012

Exit 70 @ 0.9501(9) PROFIT of 3.5 Pips $0.0258

Short 70 USD/CHF @ 0.9607(6) on 6/25/2012

Exit 70 @ 0.9620(6) LOSS of 13 Pips - $0.0946 As well, I have again adjusted the sizes in regards to our order management. Now, each time I enter the market, I have a 22 Pip Firm Stop Loss, a 30 Pip Trailing Stop Loss, and a 52 Pip Profit Target ...

Forex 'Sister' Account Year to Date

June 24, 2012

Savings Side-Pocket Account Balance: $1,801.23 Capital is -11.2 % Year to Date. Yield Return on Capital + 0.5587% $273.00 for a Slush fund / Drawdown Kill Switch fund ($232.14 owed to this Fund)
- $1.43 added from WM Dividend
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 % )

$505.14 for Emergency Savings Getting Paid Fund: $12.80

$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 % ) $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% - One $10.00 One Year CD Purchase on 5/21/2012 at 0.50% - One $10.00 One Year CD Purchase on 6/21/2012 $20.00 of this cash reserved for the first side-pocket

Total Portfolio Balance: $15,954.25 - Total AMB Inception to Date Return: + 6.362 % Return / Yield up + 2.464 % year to date) S&P 500 Year to Date: +6.05 %

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 principles4. 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 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.

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