Masterclass with Larry Williams: COT, Market Cycles & T… — Transcript

Okay, hello. I am Jason Shapir with Crow Market Report, and today I have the absolute pleasure of having Larry Williams join me for a conversation about markets and other things. For those of you who don't know who Larry Williams is, then I would argue you're probably in the wrong place.

know who Larry Williams is then I would argue you're probably in the wrong place but um Larry has been trading for a very long time he uh famously won you know the uh trading contest whatever that thing is called um and I think he to

Larry has been trading for a very long time. He famously won the trading contest, whatever that thing is called, and I think to this day no one's ever beaten the return that he put up in the contest. What's even cooler to me is that his teenage daughter won the trading contest, which I think just speaks volumes.

the crap out of all the rest of us um Larry has also written books about trading he has developed uh indicators that that are very famous like the Williams percent R things like that he's dug deep into the co stuff which we

It's nice to have a teenage daughter just kick the crap out of all the rest of us. Larry has also written books about trading. He has developed indicators that are very famous, like the Williams %R, things like that. He's dug deep into the COT stuff, which we definitely get into. I know he's very into cycle analysis, which is not something that I do, so I'd love to hear more about it. I know he's a sentiment-driven guy, which I love, so hopefully we're going to have a very nice conversation.

conversation so welcome Larry and thanks for joining us thank you Jason look forward to so let's start with a very broad stroke um how do we do this how do we make money in the markets one of the

So welcome, Larry, and thanks for joining us.

about stocks well a stock went up one point today what does that mean said you would have made $100 and I go W I'm in how do I do this without working I make a $100 in 1962 which is a huge amount of

Thank you, Jason. Look forward to it.

that gives us a bit of um a bias as to what should take place in the market some of us are better at that than others some tools are better than others and sometimes we're not lucky and sometimes we are so what do you think

So let's start with a very broad stroke. How do we do this? How do we make money in the markets? One of the most important things to you?

a market to move so that essentially fundamental in nature I think markets go from A to B because of real reasons fundamentals but they dance around because of technical stuff emotions of the marketplace so for setup tools you

Just buy low, sell high. That's all. That's all you gotta do.

timing though they just say this Market should move it doesn't say when then you can bring in the technical tools um and most people just get into technical tools so to them a Buy Signal is a Buy Signal to me of crossing of moving

You know, it looks so easy. I mean, I remember when I first started in 1962, I asked somebody, "What does that mean? I didn't know about stocks." Well, a stock went up one point today. What does that mean? They said, "You would have made $100." And I go, "Wow, I'm in! How do I do this without working? I make $100 in 1962," which is a huge amount of money.

of timing simple trend line breakouts Channel break breakouts is really simple um I think those are the simplest and probably the easiest to actually use so trend line breakouts Channel breakouts but within the realm of the other things

And it looked like all you had to do was guess will it go up or down. Well, ultimately, we do that, except we try to use things like technical or fundamental analysis, something that gives us an edge, that gives us a bit of a bias as to what should take place in the market. Some of us are better at that than others. Some tools are better than others. And sometimes we're not lucky, and sometimes we are.

if there's a premium in a in a commodity market so sorry tell us real quick what's what a premium in the commodity Market means well a premium would be typically uh sand wheed or any natural resource Market the nearby contract will sell for

So what do you think are the best tools to help us develop an edge?

than the distance that's a premium that happens because only one reason somebody wants the nearby contract so intently they're willing to pay more for it than they usually do it so it's not speculators don't do that little guys

Well, I think the way I look at tools is a little differently. I think that you have to break your tools down, and you have to have some tools that set up a market to move, so that essentially fundamental in nature. I think markets go from A to B because of real reasons, fundamentals, but they dance around because of technical stuff, emotions of the marketplace.

bullish buy signals work a lot better so when there's a premium in the front months that that's a bullish signal because means there a shortage it means a shortage or that for whatever reason the commercials want the product it's

So for setup tools, you mentioned Commitment Trader Report earlier, great report. Yeah, that gives us a real bias, longer-term bias in the marketplace. Valuation measures give us a real insight into this market should rally. Those fundamental or conditional setup indicators aren't timing though. They just say this market should move. It doesn't say when.

still have to look at as a premium fading is a building up but but it's a great fundamental tool that most people aren't aware of was like yeah this is the reality of the marketplace somebody wants this so badly the commercials

Then you can bring in the technical tools. Most people just get into technical tools, so to them a buy signal is a buy signal. To me, a crossing of moving averages is only important if it takes place when the market is conditioned to rally.

I know you've done a lot of work on because I use this extensively um and so I know some of the strengths and some of the weaknesses and um for example uh okay you have the equ TR and as you know

So it's really a combination of tools as to what the best fundamental tools probably for futures be Commitment Trader Report, valuation, and in terms of timing, simple trend line breakouts, channel breakouts. It's really simple. I think those are the simplest and probably the easiest to actually use.

report or do you look at the new stuff or I ick with the old report because I've tested the new stuff and hasn't tested as well but that's just me you know uh same same answer um I was first

So trend line breakouts, channel breakouts, but within the realm of the other things lining up as well.

class mail so we got about a month after the month it was delayed so it but still the Legacy report the oldfashioned report is what I use I think it's held up the most and there there are some

Exactly, and that's where people get confused. They just take a channel breakout, trend line breakout, whatever, not realizing what's the context of this, what's happening underneath this market. Is there a premium in the market? It’s wildly bullish if there's a premium in a commodity market.

in the meat markets the small Traders are really good whereas in most the markets the small Traders are not that good so you have to understand the market a little bit and um and also realize the commercials build the

So sorry, tell us real quick, what does a premium in the commodity market mean?

because it looks like they cannot possibly make money in almost every Market almost all the time the large Traders are heavily long at a market top heavily short at a market bottom but what people don't understand they're primarily Trend followers so if a market

Well, a premium would be typically, say, wheat or any natural resource market. The nearby contract will sell for a different value than the future contract because the guy out in the future has interest, storage cost. So typically, the distant contracts will sell for more. That's the standard carrying charge market.

out of it so you have to think about how these what's the reality of the marketplace like any you just can't take a number and say how this means something you need like well let's think about this a little bit

When that gets inverted and the nearby sells for more than the distant, that's a premium. That happens because only one reason: somebody wants the nearby contract so intently they're willing to pay more for it than they usually do.

essentially making markets to the commercials who are hedging there should over time be a cost to hedging and so the large speculators are taking on that cost and therefore getting paid for it over time um and that's what trend

So it's not speculators, don't do that. Little guys don't do that. Funds don't do that. Commercials, the users and producers of the commodity, drive it to a premium. They're the controlling factor of the market.

think when the large speculators get massively long should you get a reversal and they all have to pile out there's good risk reward to that trade that's really how how I do my thing so it's good to hear you say that about this the

So if they're that bullish from the market, yet the market is bullish, buy signals work a lot better. So when there's a premium in the front months, that's a bullish signal because it means there's a shortage. It means a shortage or that for whatever reason the commercials want the product.

timing I think what we we need to really understand about the large speculators is they get so massively long they don't have any more money to buy anymore that's it and and and and that's I go okay now we can bring in a public

It's important that we notice when the premium comes on. It'll build, and it'll go from negative to positive. That's usually a really good buy point to get in. Just the fact there is a premium may have been there for six months, so you still have to look at it as a premium fading or building up, but it's a great fundamental tool that most people aren't aware of.

Rally now Gold's a good example right now where we see the commercial have been uh short the large Trad is long crude oil exactly opposite scenario the commercials have been long and large Traders have been on not buying the

It's like, yeah, this is the reality of the marketplace. Somebody wants this so badly, the commercials, they're willing to pay more for it than they usually do. Things like that, I think, are what make technical analysis tools work.

cross some sort of whatever right so you got the setup and then you got what I like to they call the confirmation you know right yeah that the that is confirming that there's some type of a trend changes taking

I like it. So just selfishly, I'd like to dig a little bit into your reads on the COT report, which I know you've done a lot of work on because I use this extensively.

yeah that's uh pretty similar to um to how I like to look at it I don't really use technicals I use more mark sort of own type of thing but it's the same type of thing it doesn't really matter what

And so I know some of the strengths and some of the weaknesses. For example, okay, you have the EQ TR, and as you know, now they break this report up into all kinds of different things, whereas before they had this legacy report, and now they have all kinds of disaggregated numbers and all that.

commercials are super long here but as compared to what six months one year three years I believe that in your book you mentioned three years but how do you feel about that whole problem well in the 1970s and 80s and 90s we did use

What do you think about that? Do you stick with the old report, or do you look at the new stuff?

a different setback but more important and I think really simple for people to follow this is what I just love in the commitment trade report to Overlay the actual uh net long net short position of the commercials and small speculators

I stick with the old report because I've tested the new stuff and it hasn't tested as well, but that's just me.

who's driving the open interest be high is it's if it's the small speculators well yeah we're at a top if it's the commercials driving the open interest no we're not at a top so by by ripping that apart and looking at who driving this

Same answer. I was first introduced to the Commitment Trader Report way back in the 1970s by a guy who'd been a member of the Board of Trade, Bill. Back then, we got it on a monthly basis. It was mailed to us second class mail, so we got it about a month after the month. It was delayed, but still, the legacy report, the old-fashioned report, is what I use. I think it's held up the most.

who's driving the open interest open interest is just interest in the market and then who's really the interested party here I think that's the best answer interesting so overlaying open interest while you're looking at the commitments to Trader stuff oh it's just

And there are some subtle differences. As an example, as you're probably well aware, in the meat markets, there are a lot of small producers that don't do 100 contracts, so they're not as a commercial, but they still understand the market.

cautious and then see who driving open interest the the large Traders are usually wrong small speculators usually wrong or the commercials yes the thing about the meat markets is very interesting to me and something that I never thought of before but I I it's

So in the meat markets, the small traders are really good, whereas in most markets, the small traders are not that good. So you have to understand the market a little bit and also realize the commercials build the position, and they accumulate and distribute. They don't try to buy at the absolute low of the marketplace.

have to do if you trade 100 contracts more you have to report so I have a lot of friends here in Montana that are what we call um very informed uh you know we Run 100 cattle on our place here in

So it's not a timing tool. People get mixed up with a timing tool. To me, the most interesting one is the large traders because it looks like they cannot possibly make money in almost every market almost all the time.

Hogs same thing they understand the market so for the meat markets yeah you have to look at that a little differently and and where I learned that was just looking at the data say see for years the small specs have been right in

The large traders are heavily long at a market top, heavily short at a market bottom, but what people don't understand is they're primarily trend followers. So if a market moves up, they buy 100 contracts. It moves up another 50 contracts, another 50, 50.

other markets maybe some of the agricultur markets small farmers or yeah it's more true it's been more consistent in the meat markets um that's where it's really been the best that's a great piece of information that somebody that's from New Jersey and not Montana

So at the end of a move, they have a large contract, but their basic cost is a lot lower than where they start to get out of it. So you have to think about how these, what's the reality of the marketplace. Like any, you just can't take a number and say how this means something. You need, like, well, let's thi—

specs you know but uh not in the meat markets no yeah no that that makes a ton of sense I appreciate that that's a great piece of information um somebody was saying that you have a coot proxy for individual

stocks yes how's that work really well I mean how do you do it well because I'm the first person to write about the CO2 reports way back in the 1970s nobody followed it and no one knew what it was

I've watched this year in and year out for what uh 50 something years now so I think I understand how the commercials buy and with that knowledge I could take I can duplicate pretty much their buying in a commodity market so I figure well

if I can understand how they buy in Commodities that should apply to stocks as well so it's just a model of how professional large funds perhaps buy and so this model will tell me when they're aggressive ly on the long side or

aggressively on the short side that's really interesting I developed this oh 20 some years ago now I guess more than that maybe almost 30 years ago and it still almost exactly parallels the actual Co index so we just understand

and and the basics is they buy weakness and the public buy strength uh so it's understanding how they buy the weakness that gives us a pretty good idea and and it when it transfers to stocks it's the same thing it's not a perfect tool but

it's a really good setup tool says yeah there's been a lot of uh informed buying in this market now and the stock should rally so wouldn't that get you run over in a trending stock market I mean in

other words if if you're making the assumption that okay the commercials are buying weakness and selling strength which we know they do in the Commodities we see that consistently um take of course Nvidia the last couple years if

you were assuming that the commercials were selling that rength and you were looking to short that stock you would have gotten run over no because I mean other than risk management and waiting for confirmation you wouldn't have gotten

that stuff uh well then that's where we can bring a few other things in I don't have my dat maybe I can bring up my chart right now and look at them on another screen here and see but uh if I look at uh what was

happening in Nvidia uh we got a really good cell signal based on Cycles right at the High uh two days from the high went on a Mad Money show Jim Kramer said this is a high and then it's going to

Rally later on which is now start to happen so you can use other timing tools but I'm pretty certain that my let's see if I can bring this up uh and I can tell you what the synthetic uh index for

commercials did and um actually showed a lot of heavy buying um uh it had a it was an a sell uh one week from the high finally the the coot synthetic version if you will uh gave a sell signal and then I gave they were

heavy accumulators uh in the middle of July and right now they're neither bullish nor bearish the last time they were really bullish was uh just the end of July and they've been very bearish uh uh one week from the absolute high of

the marketplace so and they had been um this is using then maybe I'm just guessing here but sure sort of insiders is the commercials is that what that like Insider selling because I know there's been a yeah you could call it that I mean I

just think that that funds I I mean I know guys manage billions of dollars I know how they buy and so if I can break down the uh close to clo there's actually 28 relationships between yesterday's open high low close and

today's open high low cloes and those are caused by people buying and selling so I can understand which ones of those are the most important then I get a sense of who's been a buyer or seller today and clearly I think you can break

down one of my tools I use that we call progo which is professional buyers and then public buyers and they're that's really interesting you look at a chart of it yeah the the professionals when there's more professional buying than

public buying Marcus rally and when there's more public buying than than professional buying market decline and so it's just understanding how these people buy and sell and it's again it's just a tool um there's no one be all end

all stuff for this these markets though I wish there was probably like you we beat our heads against the wall to find it but you know 62 years of this I haven't found it I don't know if that

has found it I know a lot of people no it it doesn't it doesn't but but what does exist is the ability to be smarter than the other guy that gives us an awesome Advantage if we can get a sense of where the bias is in

the marketplace then we're you know in the land of the king the one I BL onee Manis blind one Manis King yes that's what I'm looking for better Vision I'm literally the oneeyed man so I appreciate that comment I only have one

eye that works um what uh are these type of indicators that you're talking about like this proxy Co for individual are those available to the public can we get those somewhere uh yeah we do have them available in

trade station Bloomberg ninj Trader uh stockcharts.com and uh Tom Dem Mar's new charting service um symbolic uh I think maybe one other place but yeah we they are available if people want them and then I occasionally well I don't have it

anymore because I'm trying to retire uh I would give classes and then would teach the people how to use the indicators in the classes but at this point I'm you know I turned 82 a few days ago and I happy birthday thank you

I am walking off the stage while I'm alive I I saw Muhammad Ali lose his last fight I saw so many people that were so good and you know Tom Brady and they should have quit when their head and

I've had a great run in the mark you know what I really want to continue but uh I'm gonna walk off the stage while I can walk and not be like Joe Biden and other people leaving the stage yeah I

say that every day only 57 but I keep saying that to myself too but somehow I keep coming back you know well I did that for a long I think I'm out you know yeah but I fin you know I'm 82 what I

have another 10 12 good years left do I want to spend 12 years just looking at things bounce up and down on the screen yeah know I hear you believe me I mean I'm looking at you at 82 and I look at

me at 57 I ain't making it to 82 ah yeah you can you got you gotta do things right there's a lot of stuff you can do that's a fascination of mine is how to live better how to live longer so you

can trade more uh you know I see so many people become really successful trading and that's great but the other side of that is they eat too much they drink too much they don't exercise they get fat they get overweight they get arthritis

and they don't have a happy life I go hey you know what I'm not doing that I went to a doctor when I was maybe 35 years old I'm like 30 uh Barney Meltzer in San Diego and he said Larry said

you're a stock Trader I said yeah I said look this is your health you're overweight right now I weigh 225 pounds your your your curve is going down he said if a stock is going down like that it's probably not going to turn around

it's going to go down you can't come get out of there you got to break that curve now and bring it up because with your health if it's down that much you can't bring it up and I see people my age I

say you know what I think your age yeah you can still turn that curve around but you get to a point there's just it's too difficult to do it I may have reached that point early but I I appreciate the

words because uh it's motivational because yes I do I I need to turn it around that's for damn sure um that's why I keep thinking getting out of trading will help me turn that around because it'll be able to focus my time

on that but it's a whole another conversation well you can do you can do both you can you can still exercise and do walking whatever there's a great study that shows that people walk live longer than people that don't walk

people this is a really interesting part of it though people that walk fast live longer than people that just walk so if you walk faster 15 20 minutes a day you're way ahead of the pack that's some 15 minutes you got you can take that

anytime you want to anytime a day tra and he's a day trader yeah I'm not even a day trader so yeah can I can do that anytime I want to and I'm r that down on my list right now walk fast 15 minutes a

day can you I'm just curious can you smoke a cigarette while you're walking faster oh my good friend Ralph Vince you probably know who Ralph is right Mr Money management Ralph worked me for a long time we did Mar R Marathon together

when he first started his wife would come out at Mile 18 and give him a cigarette because he was a smoking Runner that was great I mean some of us will have a margarita along the way right but but he would have yeah so you

can run and smoke but I I don't think you want to continue that as a LIF style Ralph no longer smokes by the way that's classic I would only only marathon with a cigarette in their mouth that would be

myle well you know what I used to do when I went to did Boston Marathon three or four times and you take buses out to the start I had one of these fake cigarettes you blow out and it looks

like smoke comes out of it so you get on the marathon bus with this thing puff on smoke comes out they go crazy no smoking no smok they're all like fine-tune athletes right it's just a joke but oh

man people get really hyper about that yeah I'm sure they do um so let's talk a little about the psycho analysis stuff this is something I don't do something I don't know a lot about but I know you do

pretty extensively and I I'd love to hear about it yeah it's been something I've been in pursuit of since I first began in the markets and 1962 um I began and then we had a bottom in 1966 and I thought that's interesting

because I went back four years from 1962 we had a bottom in 1958 I noticed we were really consistent bottoming about every four years in the stock market and then it read a book by Edgar Lawrence Smith called the tides in

the Affairs of mankind and sorry what was that called um Psy Edgar Lawrence Smith edar Lawrence Smith tied in the Affairs of mankind this guy just nailed it oh my gosh I wish I would have listened to his book when I first read

it in the 60s Warren Buffett said he's one of the smartest men he's ever known he actually changed back in the 30s people thought that Bond outperformed stocks that was the message of the day well Edgar Lawrence Smith turned that

around and said no that's wrong and here's why and his research is what propelled Buffett to do what Buffett does and Buffett acknowledges him so I I really like and he got into cycles and the only thing is yeah Cycles exist um

why and that's perplexes me and they shift and they change but there's been a couple of cycles that have been really consistent over the years that WD Gan did some cycle work uh part Elan did there it's been around fortunately

there's a piece of of trading software I use called timing Solutions that's I don't get anything for talking about it I just use it it's allows you to do so much stuff that we couldn't do before and so that's been uh very helpful and

then trying to formulate well what is the cause of these Cycles is it solar no it isn't solar I I thought for sure the 11year solar cycle would be it well it isn't and and some psych some stock have

a little different cycle than others but I've been trying to to Fig it out what these things are and most my forecasts have been pretty good you know year in advance um I got an email today or yesterday from a guy said hey I made a

fortune with your NASDAQ forecast this year thank you Larry I mean it's not an unusual occurrence they're not always perfect but boy there's there been some that was just nailed market so I know there's some Force at work here and I'm

I'm tempted to think that news and fund metals and all that kind of don't matter they drive the extension of the move but things are going to happen uh regardless of who's in office if it's Donald Trump or Cala or whoever it is think these

things going to happen and it's a it's we're pretending I think that there's there's Destiny to markets and um of course that flies in the face of all the university people who say you can't predict the markets but um I I do

believe and I've been doing my forecast reports now for I don't know 20 years something like that and those are available to us yeah at the end of the year we'll announce it when it's ready but is there

a website that you have where people can follow your stuff long term or or or not yeah there is I trade.com sorry say again I trade.com I trade.com okay because I really trade and last year our our headline for report was bull market

you know we're going to be a big bull market and uh uh that's been true um yeah I I believe very much in in in your statement of what you said that the markets are going to go where the

markets are going to go and all this other stuff is just noise it may affect the the path of where it's going to go and I see this with all of my trades you know I never really even the ones that

work I don't know what the path is going to be and it the path gets affected by various news events that come out you know long oil or whatever in the Middle East happens or an inventory report happens you know and the path is

different but ultimately it's going to go where it's going to go I believe very strongly in that there's a great song that Lauren Green remember Lauren Green from Bonanza cart right the the Bonanza television show and if you're maybe too

young for that I'm a little too young for that one well Bonanza was a big which I really get to say anymore but well there's a great song about the graves of Destiny where this guy Cowboy comes into town he digs three Graves and

somebody say what you Di and Grace or well I found my wife's been cheating on me I'm GNA go kill her kill her lover and then kill myself so he goes downtown he sees a wife with a lover and he just

can't do it a bank robbery breaks out at that time there's a lot of shooting going on and the robbers in unintentionally shoot the guy the girl and the lover and so they're all buried in the graves of Destiny they were gonna

die anyway didn't matter so this like I think there is some last year I'm reading right now in a this is our written in December last year in a nutshell 2024 we'll see higher stock prices be bullish or be out remains my

Mantra so consider how many people were horribly negative in the market last year uh yeah we can get a pretty good idea of what's going to happen precise exactly no but the bias of the marketplace which I'm looking for do I

have an advantage here it's like if you're GNA play Blackjack near a card counter you know when the deck is Rich and the same thing I want to know when the deck is Rich to be bullish or be out

so you have this psycho analysis it does a pretty long-term thing like a year out or whatever but will this change as the year goes on as some of these other things such as coot and positioning and psychology change no no no so regardless

of the positioning and all that if this is what the cycle is this is what the cycle is the cycle yeah pretty what the ones I'm working with are pretty basic pretty longterm the shorter term Cycles yeah they'll fluctuate they'll come in

and out but basically no the the path is there and uh like you pointed out which is exactly correct the news of the day will make it oscillate more or less but the basic path is there okay because for

me I would I would probably change as the positioning changes because I'm such a big believer in positioning and it drives my my stuff you know um so for me at least I would probably start to change my view now it hasn't happened in

the stock market by the way so the cycle is free to continue you know but let's just say I had something that told me the stock market was going to close at the highs this year but then suddenly

everyone got massively long on the commitments of Traders I would start to think of of a change personally but you don't it that doesn't seem to be your your thing well no I still want to look at the fundamentals what's going on but

in the context of the and this is where people get mixed up with Cycles really important point I'm glad you brought that up for me to make Cycles are about time they're not about mag magnitude so you mentioned yeah they see report

changed that's the magnitude of the move but people see my charts was ups and down the whole no Cycles simply measure time they don't measure magnitude they tell us this is a time to be bullish this is a time to be bearish the

magnitude of the move comes from exactly what you talked about Jason what's the fundamental condition of the marketplace we when we first start talking the show that's that's what drives the magnitude Cycles are just about timing that's all

that's great that's important cool um here's a question somebody asked as an which actually ties right into what I was just saying but in an interview in May this year Larry was bearish Bitcoin based on his psycho analysis I wonder

what his latest thoughts are on bitcoin especially giving the now crowded coot positioning it's funny that that's the question that came up right after I just asked that but yeah well it depends on what Bitcoin we're going to look at

again I was on the Mad Money show I think mad money with uh Bitcoin on uh coin the stock coin and very negative on that and of course it crashed uh and in fact what I'm going to do while we're

talking about this I'm going to bring up Bitcoin I'll bring up gbtc and we'll just look at what cycle are telling us right here right now about it uh so we can bring that up to date I I don't follow Bitcoin I'm an old

man I think this is the the biggest scam in the world I this is they're gonna give me a Bitcoin but they want my dollars wait a minute what's going on here like that's kind of interesting isn't it um so well do you believe on

that note do you believe and what do you think about the whole concept of what the Bears love okay um the government's borrowing too much the fiat currency is a Ponzi scheme game and that has to not necessarily today but that has to come

to an end at some level blah blah blah I mean this is really the ultimate bitcoiner Bull story right um it's hard to deny some of these things I don't know if that leads to bitcoin because the government probably or at least

maybe wouldn't allow that to happen but what do you think of that whole fundamental story and I know I always say it we've been hearing this since the 80s since Reagan and if you were bear since the 80s because of too much debt

you you you've you're dead um and you missed out on making a lot of money but let let me first give the Bitcoin thing and then I'll answer that question okay so my Bitcoin forecast was turn negative the middle of April uh says the rally

we've been in now is about through we should come down to the 1 of November rally up but the Best Buy Point comes in April of next year so I continue to see this Market in a down pattern um so

that's we're looking towards April on a psycho analysis I think the next best time to buy is going to be April yeah um and again it's been a great trading vehicle I haven't traded it uh I see it

as a trading vehicle but right now we should start to decline until November a little rally up and then in December it's come back down again now to answer your bigger question which is see this is the the nice thing there's not a lot

of nice things about getting old but will you just mention about well since Reagan we've had deficits hey Jason let's go back to when I started in 1962 no that's right you can go back there there were guys in the broker room oh

those death was going to kill us yeah and I believe that I kept waiting for the crash of 1929 right I waited in the 60s and 70s 80s and 90s 20 what what has it happened so what what this well it

did once when when oh wait no that was nothing go back to the bare Market 1970 that was a real bare Market a couple of years 2008 was over in a year no that's right boom we're back up you know like

wait that was not a be Market that was a piece of chocolate compared to 1970 it really was so but this this is the way I see things is so upside down if you want to stop inflation don't

have high interest rates High interest rates cause inflation because there's more money in circulation who's the largest player of interest rates the United States government so if interest rates are higher there's more money in circulation that's one of the reasons

that we have inflation in terms of the deficit you know when I ran for the US Senate here in Montana I was a conservative but still am but I thought that deficits really mattered when we need a balance budget and all that when

I moved to the Virgin Islands Warren Mosler became a good friend of mine Warren is a proponent of the modern monetary Theory and I listened to Warren listen I didn't I couldn't understand it and finally I realized wait we're not on

a goldback currency we're on a Fiat currency and in fact deficits are really bullish the larger the deficit the bigger the stock market rally and it makes sense because there's more money in circulation for people to buy stuff

and companies to expand and do research and build so this whole idea of defic are GNA kill us I I can't agree with that and it's all in other words a liquidity game the more liquidity the more assets can go up I mean this is

Milton Freeman stuff yeah there there's liquidity to the markets and and deficits provide more fuel the problem ultim and even Warren will admit this at some point uh you may may start to get really rampant runaway inflation and the

modern monetary Theory reply to that is increased taxes because that really kills the economy uh so that's what what they would do but I I think that that the well if they do that then I hope that there's a lot near you because I'm

coming well come to the Virgin Islands because the Virgin Islands have the greatest tax program in the world no that's what I'm saying if they raise taxes I just got done with my accountant yesterday if they raise taxes again

I'm coming I I can't take it anymore in the Virgin Islands which is a US Territory if you qualify for their economic development program which isn't that hard to do your effective state and federal tax is 3.9% not 30%

3.9% so it has a that's why so many Traders are there and other businesses the economic development program the Virgin Island Puerto Rico has the same thing yeah it's a it's a great uh tax advantage to be there yeah well that's

but don't you think my whole thing is I agree with all that I've been a proponent of all that my whole point is a Ponzi scheme blows up when it runs out of money these people don't run out of

money because they control the M they print the money right so there is no running out so I I I get that idea the more the deficit is the more they've got to print the more they've got to do and

that is just more money going in and that's very bullish assets yes yeah but is there not a limit to everything in the world including how much money the United States can print I mean doesn't physics teach us there's a limit at some

point and I'm not saying we're there I'm not saying we're close to there I have no idea where it would be but is there not a limit somewhere to what they can print before people just say I don't

want these things anymore you know we go Zimbabwe well let's look at the Bitcoin crowd we could ask them that same question yes they're creating artificial coin currency whatever the stuff is unlimited every you and I can oh we have

a great coin and you should buy it because it's scarce like what um so yes to answer the qu there is a point when it there can be too much um I don't know where that point is no no one does

it's probably has a percent of of the GNP or percent of of I'm that's the one I look at the most but um but we don't even know what percentage that would even be right and again going back to

the Beautiful point you made earlier when you started 1980 you heard the defit were going to kill us when I started 1962 the defit were going to kill us they gotten bigger and bigger and bigger yes but the economy the

economy's gotten bigger look at GDP Now versus where it was in 1962 1982 1992 so we have I think one of the things where where people get economics wrong they think it's a pie that's just this big and it never but it's an expansive pie

it gets bigger and and bigger so you take a slice there's plenty of pie left for me um people don't understand that this economy is an expansive economy it's not just limited to we only all get just one little slice of pie yeah and I

guess like you say if it ever gets to that point they'll just they'll just raise taxes and they'll slow the get to that point My Cycles will tell us first that's what I there we go all right good

um couple more things these people asked that go back a little bit in the conversation but as far as trading stuff goes how do you deal with sizing how do you deal with stop losses how do you deal with exiting a trade how do you

approach that type of stuff well that's obviously some of my weaker points so thanks for bringing those things up I can relearn um well in terms of sizing I only want to risk a certain percentage of my portfolio but how do you decide

that are you sizing that to a stop loss or or like no I mean if you read Ralph Vince's work there is an optimal amount of money that you should have on every trade but I found that that's way too risky for me

right what people what the point that people get messed up on money management is is really not managing your account money management is emotional management I can take a loss I have the emotions for that I've been trading a long time a

lot of people can't do that right so you have to say well yeah at this point this is my emotional cut off maybe it's $1,000 $500 but you have to manage if you can't manage your emotions you can't

manage your money so the first thing is what's your where's your emotional quoti you have to figure that out then you can go into stand money management for by and large 4% risk of your portfolio is pretty large for most people and it can

be very productive um so it it just depends a little bit on your emotions but uh I wouldn't want to risk more than 4% of an account on any given trade and so then decide let's say you've got

$100,000 account you're going to risk $4,000 so if my stop is $4,000 away I can buy one contract if my stop is $8,000 away I can't take the trade right so so you're Bas like off your Stu this is where I'm

gonna get stopped out therefore I know I'm gonna lose this much if I lose therefore this is how much I'm going to put on how many contracts ,000 stop loss yeah that's exactly how I do it um what

about taking profits is it based on your cycle stuff like okay I'm getting out this this is my really weak point I'm just too damn greedy yeah just like everybody else I man I just I I've used some Tom Dem Mar's work and uh targets

have been really helpful for me um because I tend to overstay my positions uh I do like to use a trailing stop low you say Tom Dem marks work yeah yeah Tom's got some great stuff on where prices should go I've never been really

good at predicting where they should go I'm more have been more time oriented I guess um but uh trailing stops because maybe I don't get to my target I do have targets uh that I like and they've been

consistently good but uh we may not get there so then I use a trailing stop as well which yeah so to adjust as time goes on yeah and as the market moves then I can my stop will get raised up uh

to different places um right so you're a trailing stop guy yeah trailing stops and targets I do have targets up there someplace uh and it's frustrating like I've been along crude oil in here had a nice run up it didn't get out finally

coming back today a little bit it's just the frustration of living through that but I know this I don't know how many trades I've had in my life Millions I got in at the low of one market one time and the high of a market

one time and you'd think the odds I should have done more than that right Jason but I couldn't I didn't not that's your trading style I mean unless you're really super counter Trend Trader to buy the lows and sell the highs is really

not a thing yeah but that's what everybody wants to do and so realized look this is going to happen I'm gonna get beat up I'm not get the high and low so if I had a Target in Market goes

higher well God bless whoever's writing it higher and if I if it doesn't hit my target then I have protective stop underneath the market where my stop will be so I'm hopefully it'll capture some of the of the profit in the trade and

and again it's primarily based like why did you buy crude because of the cycle stuff or yeah well because there's fundamental setup condition and then then there's a trend change in favor of that condition right gotcha gotcha um

I'm gonna ask you one more question from these guys and then I'm going to ask you my questions and then we'll be done can you ask him the strategy he used to win the World Cup Futures Championship sure

real easy strategy called volatility breakout uh back then we had pit sessions Market unlike today and if the market opened we would add a a value to the opening and be a buyer there subtracted value from the opening would

be a seller there and it was a great technique um I taught it a lot of people made millions of dollars trading it became very very popular and then we went into this stupid night sessions and it doesn't work anymore so it was a vol

breakout system Vol TR fing system type yeah uh we didn't really have a name for it eventually and a guy named Doug Bri I think or Brey not Brey Doug his name in a moment uh put the WR label on it a

label called volatility breakout but we' been doing that Ralph Vince and I started doing that in 1987 and just set well 86 and set the world on fire with our performance was incredible performance and with a very aggressive

money management way too aggressive we were a young kid course what did we know right we didn't know what we were doing um but yeah I worked really well but it it isn't as effective now because we have the night session opening and the

day session opening just they change the whole thing it's already gone yeah awesome so tell me where's spoo going uh and I'm not serious about the exact question but in general what's your stuff saying about different things anything big your bullish stocks the

cycle bullish stock bull stocks you want to buy stocks just before the election you want to be long at the end of this month um for sure uh and that's going into your end or and I think this coming

year will be on the long side you want to be on the alongs side of the market for the rest of this year and next year and next year okay so the bull market continues MH which makes total sense to

me um anything else you're saying that oil is that a major low in oil here recently or is that just a trading low or um pretty important obviously I'm not gonna hold you any of this let's all know that no matter who you are we get

things wrong you know what I mean don't be coming back and saying Larry William got this wrong you know I mean be the first person to admit he gets things wrong and I'll be the second person to admit I get things wrong but we're

Traders but anyway I I think the the good trades here to beong the energy markets probably uh as a very short-term Trader until the middle of this month and then probably you'll see it pull back and go higher again uh I think the

the metal markets are at a significant high in here and so think the metal markets are at a significant high in here yeah absolutely yeah so I want to work the short side of that market uh those to me mean we should also be a

long dollar you took the words out of my mouth yeah man how this trade I really screwed up so it's easier to sell the euro currency uh than to buy the dollar and I tried to sell it got stopped at

one then I didn't get in it again it's collapsed and I'm not in the trade as a perfect Larry Williams trade I'm not in it oh this is what my portfolio amazingly looks like so anything else that you're seeing we already talked

about Bitcoin we talked stocks are going up dollars probably going up because and metals down energy probably up um can VI on the grains grains have been pretty yeah I haven't really you know I because I'm trying to phase out and retire I

haven't looked at the grains right I really haven't you know it's been summertime and uh in Montana and I went to the Olympics in Paris this year nice I'm just trying to yeah I'm trying to pull back and not be so focused I'm just

focused on the bond market the energy markets metal markets and really focus on those I think that's one thing I can do I don't have to report to everybody in every market like I can just focus on where I think the best opportunities are

which I guess we just spoke about which yeah amazingly is very similar to what my my portfolio is looking like so I hope you you're right it sounds like maybe I have some good odds on my side well that's excellent Larry I really

really anything else you want to say is there a place people should go to find that that if you want to be found where they should go to find your stuff or where they can go to find your stuff or

yeah just I trade.com um we do do have a mailing list and we s out a bunch of free trading lessons they're pretty good uh so if somebody could do that and uh I don't know it we'll be doing much in the

future other than my annual forecast report but there's a lot of good stuff there like you we you know we like to produce good stuff for free for people and I think it's helped I know it's helped a lot of people so I enjoy doing

that awesome I really appreciate you taking the time my pleasure J I think there were some incredibly valuable nuggets in here enjoyed your questions I think that's what maybe brought out the Nuggets thank you very much I enjoyed it

yeah I mean for somebody that has been using the coot stuff for 25 years um I've learned a bunch of stuff just about the coot stuff which is awesome great thanks so much I hope we can keep in

touch I look forward to that I wish you continued excellent and interesting life that you've been living you look great for an 82 year old guy man you look better than I do that's for damn sure um and and and God bless and all that stuff

you as well good luck and good trading all right thanks thanks Jason