July 7, 2012

fund / Drawdown Kill Switch fund . After July 31, 2012, we will do something different with the cash dividends we receive. 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.

Trading Outlook:

Aileron Market Balance

Issue 36
Visit Us: NoNonsenseTrading.com Email: aileronmarketbalance@gmail.com

Note: By way of reminder, since the Model Portfolio has only $10,029.40 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. Stock trades may last more than one day. This is an attempt to demonstrate how account size relates to trading style. As I mention in my methodology series1, 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. The Forex account has $65.34 and is considered a micro-forex account for the purposes of the model portfolio.

Overall Trading Thoughts

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.

I will continue to progress to look for an edge to exploit that I mentioned in the issue that I sent out last week, Aileron Market Balance Issue 35.5. Shorting Cocoa right now, and then as the 15 th approaches, looking to short Soybean Meal.

Commodity Trading Thoughts

September Cocoa (CCU12 or /CCU2 in ThinkorSwim): I'm looking for a rally at this point, up to around 2300 at leat. At that point, I would wait for at least price congestion in that area. If such congestion formed for at least 10 minutes, I'd look to short a break below the lowest low of that price congestion. Soybean Complex: As the 15th approaches, I will research fundamental data. I am looking to short Soybean complex as we approach July 15 th. Not all three markets. But whichever market is providing the best technical picture. Of course, I will specifiy this further as the week progresses.
1 Exact Link http://nononsensetrading.com/methodology.html

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.

The DRIP is off on Seagate Technologies (STX) as well as for all of the other stocks in the portoflio. So 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

July 7, 2012

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).

$1,120.00 of cash I reserved for Permanent Portfolio Purchases Return from $1082.72 = + 0.40 % )
- $2 shares @ 156.12 of GLD ( $312.24 ) ( Currently $307.42 ) ( 28.28 % of P.P ) - 2 shares @ 139.58 of SPY ( $279.16 ) ( Currently $270.98 ) ( 24.93 % of P.P ) - 2 shares @ 118.17 of TLT ( $236.34) ( Currently $254.12 ) ( 23.38 % of P.P ) - 3 shares @ 84.45 of SHY ( $253.35) ( Currently $253.23 ) ( 23.30 % of P.P )

S&P 500 Year to Date: + 7.72 % AMB Total Portfolio Return Year to Date: + 3.083 % In the next week, SHY and TLT will pay dividends in the next area. To reiterate, half of those dividends will be sent to the savings side-pocket account. Investing Account Balance: $4,056.55 Return / Yield up + 0.08487 % Year to date 4.063508 shares of PEP (DRIP off Yield is 3.06 % )
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 $2.17 in Cash on 6/29/2012 Sent $1.08 to Sav. Side-Pocket Next Dividend: Not yet announced

Remaining Cash: $1,621.92 ( 39.98 % )

Percentages of that Cash -$1,221.92 of this Maneuvering Capital I reserve for Hedging and New Purchases ( 75.34 % ) -$80.00 of this Maneuvering Capital I reserve to Dollar Cost Average PEP further in the future ( 4.932 % ) DCA Price w/ no fundamental changes on PEP $60.00 -$80.00 of this cash I reserve to Dollar Cost Average PG further in the future ( 4.932% ) DCA Price w/ no fundamental changes on PG$58.00 -$80.00 of this cash I reserve to Dollar Cost Average JNJ further in the future ( 4.932 % ) DCA Price w/ no fundamental changes on JNJ $59.00 -$80.00 of this cash I reserve to Dollar Cost Average WM further in the future ( 4.932 % ) DCA Price w/ no fundamental changes on WM $28.00 -$80.00 of this cash I reserve to Dollar Cost Average STX further in the future ( 4.932 % ) DCA Price w/ no fundamental changes on STX $15.00

4.0676 shares of PG (DRIP off Yield is 3.67 % )

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

4.035 shares of JNJ (DRIP off Yield is 3.61 % )

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

$276.08 ( 6.806 % of this account ) available from Slush Fund Dividend Investing Sister Year to Date

8.081305 shares of WM (DRIP off Yield is 4.30 % )

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

11 shares of STX (DRIP off Yield is 4.01 % )

11 shares at $24.78 on 6/29/2011 w/ $5.01 Commissions Next Dividend: Not yet announced

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

July 7, 2012
Total Trading Balance: $10,189.69 ( Return / Yield up + 4.777 % Year to Date ) Commodity Futures and Stock Balance: $10,124.45 Return / Yield up + 4.842 % 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 $ 276.08 available from Slush Fund I had a few trades last week, all in Cocoa ... My current money management stats after the trades last week

Interest Payment on 6/30/2012 of $0.05 Short 1 CCU2 from 2347 to 2365 on 7/5/2012
LOSS - $187.00 (including commissions of $7.00)

Short 1 CCU2 from 2355 to 2353 on 7/5/2012

PROFIT - $13.00 (including commissions of $7.00)

Short 1 CCU2 from 2349 to 2347 on 7/5/2012

PROFIT - $13.00 (including commissions of $7.00)

Short 1 CCU2 from 2307 to 2282 on 7/6/2012

PROFIT - $243.00 (including commissions of $7.00)

Futures and Stock 'Sister' Account Year to Date

July 7, 2012
Micro-Forex Balance: $65.24 Return / Yield -4.236 % Year to Date Phase 2 Return: 0.18 % Phase 3 Return: -0.3749 % $ 276.08 available from Slush Fund And the Micro-Forex money management stats .

I had a few Micro-Forex trades last week ...

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

Exit 70 @ 0.9620(6) LOSS of 13 Pips - $0.0946

Short 70 USD/JPY @ 79.47(8) on 6/27/2012 Exit

70 @ 0.7969(9) LOSS of 22.1 Pips - $0.1941

Short 70 USD/JPY @ 79.72(4) on 6/27/2012 Exit

70 @ 79.49(0) PROFIT of 23.40 Pips - $0.2061

Short 70 USD/CAD @ 1.0328(1) on 6/28/2012

Exit 70 @ 1.0350(1) LOSS of 22 Pips - $0.1488

Short 70 USD/CAD @ 1.0350(6) on 6/28/2012

Exit 70 @ 1.0339(0) PROFIT of 11.6 Pips $0.0792 To reiterate, 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. Once the market reaches halfway to my profit objective, I will lock in 1.5 pips of profit with the firm stop loss and shred off 60% of the position ...

Micro Forex Account Year to Date

July 7, 2012
Savings Side-Pocket Account Balance: $1,804.31 Interest Payment on 6/30/2012 Capital is -11.05 % Year to Date. Yield Return on Capital + 0.6695% $276.08 for a Slush fund / Drawdown Kill Switch fund ($229.06 owed to this 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 % ) $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 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 % )

Total Portfolio Balance: $16,050.55 - Total AMB Inception to Date Return: + 7.004 % Return / Yield up + 3.083 % year to date) S&P 500 Year to Date: +8.31 %

$505.14 for Emergency Savings Getting Paid Fund: $12.80

If you have any questions regarding my personal outlook, or any other comments, please feel free to contact me at 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

July 7, 2012
management principles3. 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