Several times each month, I take off my umpire’s “mask” and climbs down from the trading desk to talk with business, civic and charity organizations about what is most dear to my heart: being an entrepreneur, trading stocks, baseball and life.

I’ve been a baseball umpire for 32 years and and a stock trader for 25 years. Along the way, I have learned a lot about what it takes to be successful not only on the playing field but also in life.

You’ll find my talks to be light, humorous and chock full of common sense.

*****

Robert Christy is a professional stock trader, money manager, speaker, author, and baseball umpire. Mr. Christy serves as the President/ CEO of Christy Investment Group, Ltd., a registered investment advisory firm and is the editor/publisher of The Intelligent Trader, a premier stock trading newsletter service. He’s the father of 2 grown children (a son who is a chef and a daughter) and calls Roswell, GA. home.

*****

If you would like to book me for your business, civic, or charitable organization, just email me (rac@christyinvestments.com or call me at 404-906-5443.

Is this the bottom? Only time will tell. If you turn on the TV or radio, all you hear about is how negative the news is. From the nightly news to the newsstand, all of the talking heads are touting that the worst is yet to come.

The latest Newsweek cover shows a long road with the title of “Road to Recession” on it. The Economist is out with a headline that says “It’s rough out there”.

These are the types of images and headlines that send the masses into a selling frenzy. One thing is certain – we see the most negative news at market bottoms and when indicators such as Bullish Percent are at such low levels.

The last time we saw magazine covers like we’re seeing now were back in 2002. BusinessWeek’s “THE ANGRY MARKET” in big, bold red letters with a picture of a growling grizzly bear on it is a prime example.

These types of headlines shouldn’t worry you nor should they affect the way that you manage your portfolio. The markets are forward looking and by the time a recession is officially declared, the markets have most likely bottomed and have started their next leg up.

Market conditions (great buying opportunities) like this come around only once every three to four years. Think back to the market bottoms of October 1998 and October 2002 and the buying opportunities that came also.

To be honest, I have no way of knowing how this will play out going forward. I also don’t know if the bottoming process will be orderly or a violent “V” shape.

What I do know is this – the indicators point to OFFENSE and that this is the correct course of action to take. I am not a predictor, but a reactor and it’s time to put the defensive playbook on the shelf and to pull out the offensive playbook.

In the image above you will notice some of the offensive plays that are appropriate for right now. Last week, in the accounts that are “option approved”, we went long the S&P 400 Midcap Index. We bought the MDY June 135 Calls in anticipation of higher prices.

This kind of position allows us to increase exposure without tying up a large chunk of capital. Over the next couple of weeks, we’ll close out our “shorts” and begin redeploying our cash position into the sectors showing the most strength.

If you haven’t reviewed your accounts in a while, now is a good time to do so. Make sure that your account is in the Offensive (wealth accumulation) position.

If you have any specific concerns you would like to address, including any individual strategies, just send me an email and we can discuss them. Also, we are at a major turning point and if you know of someone who would enjoy reading this, please forward it to them.

That’s it for now. Look for another Turret in a couple of days with a list of the best sectors in terms of risk.

R. A. Christy
The Stock Trading Advisor

Please note: The comments that I make in this blog are mine and mine alone. Charles Kirk has neither approved nor disapproved of these comments. Also, I am not being paid or compensated in any way, shape or form for the comments made herein.

Let me begin by saying that I am a big fan of Charles Kirk. I’ve been reading his site for a number of years now and I like what he has to say.

The other day, he revealed his goals and plans for 2008. That’s saying it nicely – basically he bared his soul for all to see. I admire that because you can’t achieve success in the market as a trader unless you know down deep what really makes you tick.

I spent some time thinking about what he said and what I would add to that.

1. Every trader should take some time and reflect on what is important to them. This needs to be committed to paper. Call is goal setting or whatever you want – it’s nothing until it’s committed to paper. Once it’s on paper it’s measurable and not just wishful thinking.

2. Every trader needs to strive for balance. A great trader isn’t great if his/her life is out of whack. I’ve been down that road and it wasn’t a pleasant experience. Balance is my worst enemy.

3. Charles mentions hard-work and he’s right. Trading is hard work. It’s the highest paid hard work and the lowest paid easy work that there is. The point that jumps off the page is this – he is doing what he wants to do for a living (his avocation is his vocation) and he’s molded his trading to match his skills and personality. If you take nothing else away from his post – make it this. You can not be successful if you are trying to be something you’re not. As for me, I am a position trader, not a day trader (can’t stand it and can’t deal with it). I know what I am comfortable with and what I’m not.

4. He fesses up that his life was out of balance. Things that appeared to be important weren’t and the important stuff was on the back burner. He takes the bull by the horns and has made the tough decision to do something about it. How many out there can say the same thing? If you’re honest with yourself, soul-searching is not a pleasant experience. To be successful, you need to accept the challenge and change when you need to. Not doing so is foolish.

5. His membership survey was interesting. He did a great job assessing what’s working and what isn’t. Members’ favorite areas of his site are the: stock screen machine, market posts (pre- and post-), Q&A and stock filters. His survey has me thinking about my sites and I’m making it a point to address that in 2008.

6. One of things I like about his site is the link posts issue. It’s a great way to stay current across the board on what’s what in the trading world. I consider it a weekly “must read”.

7. His surveyed revealed something that he says was a disappointment. Only 62% of his members outperformed the S&P 500 in 2007 and that most were not happy with their performance. He states ‘I need to figure out ways to fill the information/education gap’.

I don’t think that under performance is his fault. That lies with the person who didn’t perform up to par. He goes onto say, “At a minimum, I should think that at least 80% members should match or beat the market’s performance or I’m simply not doing my job!”.

I wholeheartedly disagree here. It’s a lead a horse to water thing.

My question is this – how many were actually trying to beat the market? Of those that didn’t, what was it that caused the under-performance?

I think the answer has more to do with position sizing and risk management than anything else. As a trader, the first thing that you have to learn is that you aren’t perfect. There will be losses – lots of them. The number one reason people fail as traders is that don’t have the ability to cut the cord and admit to the world that they made a mistake.

8. A Labor of Love. Charles nails it here when he says his writing is a labor of love. It’s the same reason that I write. Zig Ziglar says that “you can go as far as you want to in life if you help enough other people get what they want”. Charles is providing a huge service not only for members, but also for himself.

Someone once said that you don’t really know something until you can teach it to someone else. Truer words have never been spoken. I know that I’m a better trader/investor because of the time I’ve spent teaching others how to trade.

9. The last thing that I’ll touch on is this. He felt he was losing the time management battle and took it upon himself to empirically prove to himself if he was. This is huge because we all have the same number of minutes in the day. How we use them determines the success that we have.

I did this several years ago when I was a stockbroker. I was amazed at how much “busy-work” was killing my production. Everyone and I mean everyone can learn from this exercise.

Charles was facing the same dilemma that I was. The changes that he makes to this area will directly affect his performance for the better.

OK that’s about it for this post. The reason I did this is because I respect what Charles is doing and trying to accomplish. I’ve been at this game for 26 years now and I’m still learning. No one person has all the answers.

I also know that most of what we read on the internet is drivel or at worst fraudulent.

Charles is a guy who puts his money where his mouth is and hangs his underwear out there for all to see and comment. His heart is in the right place and what he’s doing is good for all who are willing to put the time in to learn.

Successful trading doesn’t happen in just “minutes a day”. You don’t punch a button or two and be successful. The game doesn’t work that way.

You can check out his site by following this link: http://www.thekirkreport.com.

RAC
The Stock Trading Advisor

Date: August 9, 2007

Current Field Position: DEFENSE
Bullish Percent NYSE: Os @ 48%
Bullish Percent OTC: Os @ 44%
Bullish Percent Option: Xs @ 48%

Today’s diatribe …

A crisis in Chinese is a combination of two realities:

(1) danger (top symbol) and (2) opportunity (bottom symbol)

I’ve used this symbol from time to time over the past 25 years. It’s a very good reminder of where we are today in the market. The headlines remind us everyday that we’ve only seen the tip of the iceberg on the mortgage mess. To make matters worse, members of Congress have started the posturing which means that hearings are on the way. And with the election season now on the horizon, you can bet your bottom dollar that many if not all of the candidates will have this as part of their platforms. Personal responsibility can’t be a factor especially during an election year.

As many know, I don’t have a lot of faith in Congress. Instead of pandering to the masses on this matter, they should do something important like investigate steroid usage in professional wrestling.

As for the market – subprime ooze and hedge fund woes bombed the market today and the result was the worst one day decline since 2002.

I heard someone say that the fear was feeding on itself. Pretty concise – I’d say. The Dow Jones Industrial Average fell 387 points and the S&P 500 slid 3 percent, their worst declines since a Feb. 27 drop spurred by a sell-off in China. A gauge of stock market volatility rose to a four-year high.

About 2.8 billion shares changed hands on the New York Stock Exchange, the most since July 2002. All 10 industry groups in the S&P 500 dropped more than 2 percent today.

The Chicago Board Options Exchange Volatility Index gained 24 percent to 26.48, its highest reading since April 2003. Larger readings in the so-called VIX, derived from prices paid for S&P 500 options, indicate traders expect bigger share-price swings in the next 30 days.

The daily bloodletting is getting old and “pity the fool” who isn’t up to speed on this sub-prime mess. Mark my words – serious heads are gonna roll once all this crap makes the light of day.

So – what’s next?

The NYSE High Low Index is one of the short term indexes that I use to keep an eye on the risk levels in the market. The indicator which measures the percentage of new highs to new lows has reached an unusually low level. So low in fact, that we have only seen this level 15 times in the past 27 years. The market isn’t just oversold, it’s totally washed out.

What this tells me is that the market is pretty ripe for a bounce. Once this indicator turns, it will be a good time to load the boat with some new positions.

On the sector front, the average reading this week in the sector bell curve is 40.39%. This is a pretty good shift to the left and it’s giving us readings that we haven’t seen since March 2003.

Several sectors are stirring and showing signs of life. They are Gaming, Real Estate, Finance and Insurance. Favored sectors include Oil, Oil Service, Software, Protection Safety Equipment and Software.

Since we’re still on defense, we’re holding tight until the indicators give us a green light. If you’d like to see the sector bell curve up close, just send me an email and I’ll send you the chart.

Another sector showing signs of life is Wall Street. Given all of the bad news surrounding the mortgage debt crisis, just about everyone in this sector has been tainted and taken to the woodshed. Since Wall Street is nothing but extremes (either too good or too awful), a number of big time opportunities could show up soon.

For now, I’m sitting tight and keeping my eyes on the stops. When one is triggered, I’m moving the proceeds into money market. I’m also using this time to work on my “watch list”. These are names that I want to own when the buy signals come back.

RA Christy
The Stock Trading Advisor

P.S. Please fee free to forward this to your peers, friends and associates you think would benefit from its contents. They will thank you for it – and so will I!

Sign Up to receive your own copy of The Stock Trading Advisor’s ‘From the Trading Turret’:
http://www.christyinvestments.com

**********

The Stock Trading Advisor’s ‘From the Trading Turret’ is an OPT-IN e-letter only.
Please be assured we do not spam or give personal information to third parties–ever.

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** CIG ROLLS OUT NEW MANAGED ACCOUNT PLATFORM **
Is Foreign Exchange (FX) trading right for you? Over the past few years, foreign exchange (Forex or FX) trading has emerged as a competitor to the established worldwide stock and commodity markets. If you’re not familiar with Forex, it is the largest and most liquid market in the world. Forex trading offers many advantages, such as: commission free 24 hour trading, superior margin requirements, no limit-up or limit-down, tight bid-ask spreads and no short-selling restrictions.

CIG offers investors 2 different account options, The CIG Managed Forex Account and a Self-Directed Account. The Managed Account is one that we manage for you on a performance fee basis. The other is one that you trade yourself.

Click here (http://www.christyinvestments.com/forex.htm) to see why top traders and analysts are moving into this exciting trading arena.

**********
About 20% of e-mail is never received due to spam filters.
If you have a spam checking program installed on your computer, please be sure to add rac@christyinvestments.com to your “safe list.”

**********
R.A. Christy is a professional stock trader, money manager and author. Mr. Christy is the President CEO of Christy Investment Group, Ltd., a registered investment advisory firm. He is also the Managing Partner and Portfolio Manager of Plato Advisors, LLC. At the time of publication, Mr. Christy may from time to time write about stocks in which he, Christy Investment Group Ltd or Plato Advisors LLC has a position. In such cases, appropriate disclosure is made. Under no circumstances does the information in this column represent a specific recommendation to buy or sell stocks. Mr. Christy appreciates your feedback and invites you to send it to rac@christyinvestments.com.

The Stock Trading Advisor
c/o Christy Investment Group
P.O. Box 625
Alpharetta, GA 30009-0625

To unsubscribe or change subscriber options, please contact us:
online: http://www.christyinvestments.com
by email: info@christyinvestments.com
by fax: 1-678-302-4348.

© Copyright 2007 RA Christy

From: R.A. Christy
Editor, ‘From the Trading Turret’
President/CEO, Christy Investment Group
http://www.christyinvestments.com

Date: August 1, 2007

Current Field Position: DEFENSE
Bullish Percent NYSE: Os @ 50%
Bullish Percent OTC: Os @ 44%
Bullish Percent Option: Xs @ 50%

This week’s comment …

Sectors

Last time, I mentioned that 5 sectors of the 40 sectors that I follow were positive. I mentioned 4 of them. Sorry about that – I left out telephones. After Monday’s action, SEMIS AND SOFTWAR, are the only 2 sectors that are still favorable.

Capital Preservation is the watch-word of the day. I’ve got a bad feeling about this.

I don’t even know where to begin. The talking heads declared the correction over on Friday. It looks more like a dead cat bounce to me. On July 19^th, we notched an all-time high for the Dow. A mere seven trading days later, we’re 800 points lower. The bubbly at CNBC hasn’t even lost its fizz yet and this hangover is a doozy.

For those that were in the market in 1987, the lesson of the day was this: mortgage backed derivatives are nothing more than toxic waste. It was a painful lesson for many. In 1998, another generation was treated to the same lesson when John Merewether’s LTCM hedge fund blew up. (Long Term Capital Management).

Today, the lesson is this – what happens when you take toxic waste, leverage it about 50:1and have interest rates creep up on you? Just ask the folks at Bear Stearns. The crap blows up because there is no sell side. When everybody on the trading desk owns what you own AND it blows up, there are NO buyers for the stuff.

Last time, I said that this is just the tip of the iceberg. There isn’t a soul alive that would bet his life as to exactly how these pools of mortgages are actually valued. All of the MBA speak won’t get it right. It’s a smoke and mirrors game. Back in the early 1980s, I used to trade discounted Ginny Mae pools (GMNA). Interest rates were falling and people were re-financing at a rapid clip. I kept one eye on LIBOR and the other on my realtor. When the realtor thought rates were headed up, I booked the profits and made the switch to stocks and haven’t looked back. All I knew was this – the average new mortgage at the time was a 30 year instrument, it had an average life of 12 years and a theoretical life of seven years because the average homeowner moved every 4 years. When the interest rates shot up in the early 80s, the current pools went to a huge discount. We were buying them for 40-50 cents on the dollar. When Paul Volker cut the rates, they plummeted. Over the course of a couple of years, rates fell from 15% to 7-8%. Not only did we get the rise in price when the rates fell, we got back 100 cents on the dollar when the older mortgages were replaced with new ones.

Not one to confuse brains for a once in a lifetime opportunity, I jumped to another trading desk. The bottom line is this – I traded the stuff and I had absolutely no clue as to how it was actually priced and valued. AND – I didn’t know anyone who did.

Congress is making some noise about looking into this. Why? I guess they’ll try and pin it on Bush or Cheney. I’m not holding my breath. Whatever happened to reading the fine print and accepting responsibility for your actions?

Without being overly cynical –

Homeowner A has a house that they want to sell. Homebuyer B shows up and says that they want to buy it. Can they afford it? Most likely the answer is NO. Will they make a down payment? In most cases, the answer is no. If they do, it will be the absolute minimum.

Homebuyer B simply can’t afford this house and should step back and evaluate what they really can afford.

In walks Mr. Sub-Prime Lender who says that he can get them into the house of their dreams. Owning a home is a right and this house is right for them. He takes down their financials and miraculously gets them qualified for the mortgage. Never mind that most of the numbers are blatant lies and complete fabrications. Homebuyer B is so happy that they sign the papers with a nod and wink because they are ecstatic that they found someone who was creative and willing to work with them to get them into their dream home? I forgot to mention that the papers are in legalese and even the author doesn’t have a clue as to their exact meaning. It doesn’t matter because Homeowner B hasn’t read them anyway.

Lost in the confusion is the reality that Homeowner B can barely make the payments with initial interest rate which is bogus (translation – substantially less than the current market rate). After the initial term, the rate adjusts to reflect current market conditions. Unbeknownst to Homebuyer B, this means that there is a likelihood that their house payment may go up substantially.

Rates rise and now Homebuyer B is in a pickle. They can’t make their monthly payments and fall behind. After several months of this, the lender has no other option than to foreclose on the property. Sad but true.

CNN shows up and films the eviction which depicts the proud homeowner being moved out into the street. Blame is assessed and it’s reported that Bush and Cheney have masterminded the fall the middle class. Congress, not to be outdone, is riding to the rescue. They want to hold hearings and get to the bottom of the mess. Who’s to blame?

There’s plenty to go around. Like I said, this is just the tip of the iceberg.

That’s about it. The portfolio is holding steady and some stops may come into play today or tomorrow. The short side of the portfolio is helping, but I’m not happy with it. I’ll talk about this next time.

RA Christy

P.S. Please fee free to forward this to your peers, friends and associates you think would benefit from its contents. They will thank you for it – and so will I!

Sign Up to receive your own copy of ‘From the Trading Turret’:
http://www.christyinvestments.com

**********
‘From the Trading Turret’ is an OPT-IN e-letter only.
Please be assured we do not spam or give personal information to third parties–ever.

**********

** CIG ROLLS OUT NEW MANAGED ACCOUNT PLATFORM **

Is Foreign Exchange (FX) trading right for you? Over the past few years, foreign exchange (Forex or FX) trading has emerged as a competitor to the established worldwide stock and commodity markets. If you’re not familiar with it, the Forex market is the largest and most liquid market in the world. Forex trading offers many advantages, some of which are: commission free 24 hour trading, superior margin requirements, no limit-up or limit-down, tight bid-ask spreads and no short-selling restrictions.

CIG offers investors 2 different accounts, The Managed Account and the Self-Directed Account. The Managed Account is one that we manage for you on a performance fee basis. The other is one that you trade yourself.
Click here (http://www.christyinvestments.com/forex.htm) to learn why top traders and analysts are moving into this exciting trading arena.

**********
About 20% of e-mail is never received due to spam filters.
If you have a spam checking program installed on your computer, please be sure to add rac@christyinvestments.com to your “safe list.”

**********
R.A. Christy is a professional stock trader, money manager and author. Mr. Christy is the President CEO of Christy Investment Group, Ltd., a registered investment advisory firm. He is also the Managing Partner and Portfolio Manager of Plato Advisors, LLC. At the time of publication, Mr. Christy may from time to time write about stocks in which he, Christy Investment Group Ltd or Plato Advisors LLC has a position. In such cases, appropriate disclosure is made. Under no circumstances does the information in this column represent a specific recommendation to buy or sell stocks. Mr. Christy appreciates your feedback and invites you to send it to rac@christyinvestments.com.

The Stock Trading Advisor
c/o Christy Investment Group
P.O. Box 625
Alpharetta, GA 30009-0625

To unsubscribe or change subscriber options, please contact us:
online: http://www.christyinvestments.com
by email: info@christyinvestments.com
by fax: 1-678-302-4348.

© Copyright 2007 RA Christy