I refer to my post earlier this afternoon. This is a post to...

I refer to my post earlier this afternoon. This is a post to relieve guilt. I went to bed half an hour ago after a night crunching my models (including GGP of course) and couldn’t get to sleep because of guilt. There are a couple of inaccuracies in my earlier post…

1. I said I wasn’t an existing holder prior to yesterday. I was. In my defence my holding was really tiny. One of my trading methods involves companies that I suspect might be candidates for future share purchase plans (SPPs). When my models tell me to sell, I exit all except a small holding (usually about $1,000 worth). My holding was one that I had virtually forgotten about because it was an immaterial part of my portfolio. Also there had been no SPPs since I exited. I made an easy zero risk profit out of doing this on a GGP SPP a couple of years back, but I was fully invested when the other one occurred so the SPP benefit, in % terms, was minor. You’ve got to be in it to win it… this strategy has very little risk but a high payoff if it works. SPPs for retail shareholders are a free option because of the ridiculous length of time from announcement date to final payment date. I’ve traded in and out three times over that period on a couple of occasions.

2. In the interests of transparency, I should have disclosed that I placed another order at 0.002 immediately after getting filled at 0.003. It is for 10,000,000 (ie $20k). I’ll decide what to do with it in the morning depending what my models say…. but I doubt it will stay there. It has a snowflakes chance in hell of being filled with about 150m shares ahead of it in the queue! It was more hoping a big dumper misinterpreted the news and decided to exploit the unbelievably thin market yesterday afternoon to create a bearish sentiment and take out most of the 0.002s. Unlikely, but it has happened more than once in GGP recently. There have been very active cappers in this stock holding it at artificially low levels (yes I know it’s a poor performer but my analysis indicates even with this poor performance it should be at least double where it is, and if it actually does something decent, well its off to the races.

Would you believe the biggest trade in GGP today was my 3,000,000 line mid afternoon (which I referred to in my post a few minutes later). That sort of volume and price action makes a few of my models completely redundant. I feel like I’m fighting with one hand tied behind my back and therefore not trading with great confidence. Yet I sense that something exciting is due to happen in GGP in the next week or two. I just need my models to confirm it. That $9,000 trade is an average size trade for me. I want to go in big but won’t until I get my signals. Maybe next week?

I admit I don’t know the first thing about the oil and gas industry, and would never pretend to. I believe you should never pretend to be what you are not. I am therefore extremely grateful to those oil and gas experts who post honest and informative posts on GGP on Hot Copper. The only thing I would ever profess to be good at is market analysis, price action, sentiment, trade volume data, computer modelling, etc… a lot more boring than O&G! Some people call me a nerd, but I know I’m not!

Tomorrow morning’s pre-open price action will be fascinating to watch. But, you say, there is no pre-open price action because the market isn’t open. That’s what most people think but there is a wealth of information to be had analysing the order book for additions and cancellations, how big they are, how close together they are (likely same guy), which broker (if you can see that) as certain brokers have certain tricks they use over and over thinking nobody realises (we do fellas!). The pre-open from 7.30-10.00 has been boring as bat sh*t in GGP for ages. But hey, there was an announcement Monday afternoon that nobody noticed. Presumably a few people would have read it by now, and certainly those with existing orders on would be complete morons if they didn't read it overnight at least. Thus there might be some price action. The thing I like to model is when buy orders get cancelled. There are some brokers who, if they plan to definitely buy during the day, cancel their orders before the market opens, knowing they'll be a waste of time because their own buying will push the market up later in the day. This tactic has the added advantage of making fools (you'd be amazed how many are out there kidding themselves they can make money in the markets)think the price will be weak in the coming day because the buy support has shrunk. Wake up and smell the roses fellas (you know who you are)- the absolute level of buys and sells at any given moment means absolutely nothing - its the incremental change (called delta by traders) in the buy and sell positions that has meaning. You can't analyse that without a computer model, unless you have no life and are willing to sit there all day watching a screen!

Would you believe there is value to be had analysing the data on hot copper? What data you ask? The data in the views and dates/times columns. It has a lot of value but only in really highly watched, highly posted stocks (like GGP). Models can take time between posts, number of views made between posts, etc, etc, and overlay that with actual trading activity in the market. Using time as the field for correllation, matching the two sets of data and modelling it over a long period of time, backtesting it, you can get a wonderful predictive model. And you wonder why your own profits are less than the All Ords every year, year after year. Call them bots, call them algorythmic traders, call them what you will but these models are eating your lunch.


If you are an oil and gas expert… read on. If you are not, stop here because you’ll be bored out of your brain with technical crap and copy/pastes which may or may not have value.
Bye for now… hope my guilt trip didn’t bore you.

Hi O&G folk. Read on for the opportunity, but not the obligation, to turn a dog into a peacock.

People who desire to be rich make poor trading decisions – their views are coloured by greed. They are especially bad at picking the moment to sell. I have never had a desire to be rich. I live comfortably, I have a few extravagances such as my Bayliner 195 classic that I bought in 2006. I can
COMTINUED IN PART TWO (technical issue kept cutting off my post).