Livre de Trading

Disclaimer
 NO REPRESENTATION IS BEING MADE THAT ANY

ACCOUNT WILL, OR IS LIKELY TO ACHIEVE PROFITS OR
LOSSES SIMILAR TO THOSE DISCUSSED WITHIN THIS
SITE, SUPPORT AND TEXTS. OUR COURSE(S), PRODUCTS
AND SERVICES SHOULD BE USED AS LEARNING AIDS. IF
YOU DECIDE TO INVEST REAL MONEY, ALL TRADING
DECISIONS ARE YOUR OWN. HYPOTHETICAL OR
SIMULATED PERFORMANCE RESULTS HAVE CERTAIN
LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE
RECORD, SIMULATED RESULTS DO NOT REPRESENT
ACTUAL TRADING. SIMULATED TRADING PROGRAMS
ARE SUBJECT TO THE FACT THAT THEY ARE DESIGNED
WITH THE BENEFIT OF HINDSIGHT. THE RISK OF LOSS IN
TRADING STOCKS AND COMMODITIES CAN BE
SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY
CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR
YOU IN LIGHT OF YOUR FINANCIAL CONDITION
Disclaimer
 CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED

PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS.
UNLIKE AN ACTUAL PERFORMANCE RECORD,
SIMULATED RESULTS DO NOT REPRESENT ACTUAL
TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN
EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER
COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN
MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
SIMULATED TRADING PROGRAMS IN GENERAL ARE
ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED
WITH THE BENEFIT OF HINDSIGHT. NO
REPRESENTATION IS BEING MADE THAT ANY ACCOUNT
WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES
SIMILAR TO THOSE SHOWN.
Our Great Fear
A
STOCK MARKET CRASH !
We are bombarded by fear mongers
©2015 LnL Publishing, LLC. All rights reserved.

2014 Crash

Scientist Predicts
60% Collapse

The Trend is Up

Erase The Fear
Repeat after me…
THE TREND
IS UP

Fidelity Study
1) The shorter you hold a stock, the more

likely you are to lose money
2) Accounts that had done the best were the

accounts of people who forgot they had an
account at Fidelity

The Facts Are…

The Facts Are…
The Average Annual Return From 1926, the

Year of the S&P’s Inception, Through 2014
HAS BEEN 11.69%

10 Year Pattern

Average % Gain in S&P
Composite Index of Each Decade

5th Year Pattern
1795-1895

7 Year Sell Off

Why?

Why?

4 Year Pattern/Cycle







Yearly Influences

Presidential Cycle

Presidential Cycle

Presidential Cycle

Presidential Cycle

Presidential Cycle

Market Timing Does Work
“The strategy based on the spread between the

P/E ratio & short-term interest rate robustly
beat the market index even when
transaction costs are incorporated.”
U.S. FEDERAL RESERVE PAPER

When To Sell
 Learn How Markets Top And Bottom

 Have We Been Trying To Predict The Wrong
Thing?
 Do Stocks Top And Bottom For The Same
Reason?

Timing Matters

Predicting Recessions

Treasury Spread

TED Spread

Aruoba-Diebold
Philly Fed

Predicting Recessions

Bullish Yield Curve

Yield Curve Facts
 Steep positive curve indicates investors expect

strong future economic growth.
 Sharply inverted curve means investors expect

sluggish economic growth.
 Flat curve generally indicates investors are

unsure about future economic growth

More Facts

Bearish Yield Curve

Yield Curve
Inverted Yield Curves

Have Preceded 7
of the Last 7 U.S. Recessions

History

The Impact

World Wide

How to Use It
 When the Yield Curve is < 0%, Long

Commodities And Gold
 When the Yield Curve is 0 – 2%, Long Us And

Foreign Stocks
 When the Yield Curve is > 2%, Long Bonds And
REITs

Yield Curve Prediction

Yield Curve

Yield Curve

Yield Curve

Yield Curve

Yield Curve

Yield Curve

Fed Consumer Opinion

Inflation Sell Signal

Best Fundamental Tools
 Philly Feds’ Aurora Dieboldt Scotti

Business Conditions Index (ADS)
 Philly Feds’ Business Outlook Survey
(BOS)
 Anxious Index
 The Conference Board U.S LEI

Best Fundamental Tools
 The Conference Board Employment

Trends Index (ETI)
 Chicago Fed National Activity Index
(CFNAI)
 ECRI Weekly Leading Index (WLI)

P/E Ratio

P/E Ratio Formula
Multiply the current P/E by 0.57, then subtract

the result from 20.67. Expected five-year average
stock return = 20.67 – 0.57 (current P/E). Finally,
subtract from 10.46

10.46 Formula
In January, 2008 the S&P 500 P/E ratio was 21.76

giving us 8.23% value a sharp indication value
was fluffy as the average return has been 10.46%
(-2.23)

Today
16.2 X .57 = 9.234

20.67- 9.234= 11.43
10.46- 11.43
1% Better Than Average

13 Week Rate of Change









Close This Week Minus 13 Weeks Ago

as a % Change

Sin Sells

Sin Sells

Best Groups

Is This You?

Age is Good

Highest Market Cap
Buy First Trading Day of Year

Lowest Market Cap
Buy First Trading Day of Year

Buy 5 Highest
Debt to Equity Stocks in Dow

Buy 5 Lowest
Debit to Equity Stocks in Dow

Buy 50 Highest Return on
Equity Stocks S&P 500

Buy Highest 10% Priced
Stocks in S&P 500

Buy Lowest 10% Priced
Stocks in S&P 500

Ratio Investing

Buy 50 Highest
Price to Sales

Buy 50 Lowest
Price to Sales

Value or Growth?

Value or Growth?

Value or Growth?

Best Value Funds
Fund Name Symbol Rating Risk

Grade
LM BW Dyn Lg Cap Val IS LMBGX A+ B
Fidelity Value Discovery Fd FVDFX A+ B-
Vanguard Mid-Cap Value Index VMVIX A+ B-
Vanguard US Value Inv VUVLX A+ B-
Vanguard Russell 1000 Val Idx VRVIX A+ B
Harbor Mid Cap Value Inv HIMVX A+ B-
Fidelity LgCp Val Enh Idx Fd FLVEX A+ B-

Value Ratios

Square Root
Stocks Move in Square Roots

Square Root of 100 is 10 +10%
Square Root of 4 is 2 +50%

Current P/E vs 12 Month
Forward P/E Spread

Price to Sales &
Price to Earnings Study

10 Lowest Positive
Forward P/E

Data Driven
In all of my research two values have stood the test

of time in selecting high-performance stocks:
 Price to Sales Ratio

 12 Month Forward P/E Ratio
 In both instances, the lower the better

$1,000,000 BET

Easy as Pie

Our Rule
Buy the 5 Lowest Price Stocks with a Positive

12 Month Forward P/E

Rule - Reminder
Our Rule is to Buy the 5 Lowest Price Stocks

With a Positive 12 Month Forward P/E

Rules
Right Time to Buy and Sell
1. Buy stocks last week in October every year
OR perhaps buy a little sooner if stocks are getting
clobbered or indicators you employ encourage you.
2. Hold for 6 to 9 months, unless those same indicators of

yours are excessively bearish.
3. Years ending in 5 are treated differently. Buy early in the

year. Hold until may of the next, a “6” year.

Rules
Every 3 Months Upgrade the Portfolio Adding

Any New Stock to the List And Selling Any That
Have Moved Out of the 5

Buy 10/25
Exit 5/25 Results

Positive Forward P/E
Various Rolls

EBITDA Comparison

Quarterly Returns

Technical Only
Price Based Strategy
Relative Strength

Strongest 6 Month
Relative Strength

NASDAQ Most/Least
Oversold Study

Home Depot vs Dow

Comparative Strength

Best Long Term

Best Long Term

News
Most of the variations in returns for individual

stocks cannot be explained using readily available
sources of news information

Fed Model Predictions
& Subsequent Returns

Dow Equal Dollars vs Equal Shares
5 Lowest Price to Sales

Dow Equal Dollars vs Equal Shares
5 Highest Price to Sales

Exit April Following Year 5 Dow
Stocks Greatest Insider Trading

Negative Earnings
Over the last 30 years, stock prices increased

6.5% in quarters with negative earnings growth
and only 1.9% otherwise

Jobless Claims Buy

Best Year Ever!
In 1933
US Unemployment Rate Touched 25%
…That Was The Best Year Ever
For US Stock Returns

Impact

Unemployment Sell

Fed Vice Chairman
Stanley Fischer
When people enter the 35 to 49 year-old age

bracket, they make more money than at any
other time of their lives.
These “Peak Earning Years” Are Also

Peak Spending Years

Fed Vice Chairman
Stanley Fischer
2015 kicks off an economic wave when the

middle-aged group (35-49) is set to outgrow
the younger group (20-34)
This Ratio is Set to Last

Into About 2028

Our Future

Impact

My Favorite Setup Tools
1. Williams Money Flow Index

2. Williams VIX FIX Index
3. Williams Paunch Index
4. Williams WillVal Index
5. Williams True Seasonal
6. Williams Accumulation Index
7. Williams Sentiment Index

Apple Williams
Money Flow Index

Altria Williams
Money Flow Index

Intel Williams
Money Flow Index

Strategy Results
Williams VIX FIX

Apple VIX FIX

Apple VIX FIX

Altria
VIX FIX Trend Lines

Amazon
VIX FIX Trend Lines

Amazon Weekly Paunches

Amazon Daily Paunches

Costco Weekly Paunches

Costco Daily Paunches

Starbucks End of the Trend

Walmart End of the Trend

Apple End of the Trend

Altria WillVal

Microsoft Valuation

Alcoa WillVal

Fastenal WillVal

Walmart WillVal

Walmart Daily
True Seasonal

Walmart Daily
True Seasonal

Starbucks Daily
True Seasonal

Exxon Daily
True Seasonal

Qualcomm Daily
True Seasonal

Johnson & Johnson
Williams Accumulation

Disney

Facebook

Twitter

Twitter
Williams Sentiment

IBM
Williams Sentiment

Amazon
Williams Sentiment

IBM WillTrend

Apple WillTrend

Apple Daily Trend Lines

Wealth is Not Health
1. Correct Form Of Exercise

2. You Are What You Eat
3. You Are What You Think
4. Supplements

How We Age
Lung Capacity

Speaking of Trend
Mean FEV1/FVC Ratio By Age Group

Speaking of Trend
“This pulmonary function measurement appears to

be an indicator of general health and vigor and
literally a measure of living capacity. . . Long
before a person becomes terminally ill, vital
capacity can predict life span.”
- The Framingham Study

Hot Off the Presses
Run a Mile Race, Instead of a Marathon

Short, Intense Exercise
May Beat Endurance Sports
WSJ 9/15/2014

What We Can Do…
 Breathing Exercises
 Intense short “blasts” of exercise

with proper training, you can elevate oxygen
capacity by 10-20%!
10/20/30 or 30/30

What We Can Do…
How Traders Improve

Lung Function

What We Can Do…
Day Trade
You Will Yell A Lot

Fast Beats Slow
Senior Citizens Who are the Fastest

Walkers Live Longer Than Those
With the Slowpokes
- According to Researchers at the

University of Pittsburgh.

Fast Beats Slow
Looking at the Lives of Slow & Fast

Walkers Who Were 75 Years Old
 Only 19 Percent of the Slowest Men & 35
Percent of the Slowest Women Lived
Another 10 Years
 However, 87 & 91 Percent, Respectively,
of the Fastest Walkers Were Still Going

Big Sky Games

Market Structure
A Short-term Low is a Day (or Bar if You Are

Using Different Time Periods) That Has a
Higher Low on Both Sides

Market Structure
A Short-term High Will Be a Day (or Bar)

That Has a Lower High on Both Sides of it

Pfizer
Short-Term Swing Points

Market Structure
 A Short-term High, With Lower Short-term Highs

on Both Sides of it is an Intermediate-term High
 A Short-term Low With Higher Short-term Lows

on Both Sides of it is an Intermediate-term Low

Pfizer Short-Term
Highs & Lows Formation

Pfizer
Intermediate-Term Swing Points

Pfizer
Intermediate-Term Swing Points

Long-Term High
 An Intermediate-term High With Lower

Intermediate-term Highs on Both Sides of it, is a
Long-term High

Long-Term Low
 An Intermediate-term Low With Higher

Intermediate-term Lows on Both Sides of it, is a
Long-term Low

Pfizer Target Shooter

J&J
Williams Money Flow Index

J&J

J & J Accumulation and

Johnson & Johnson
Daily Entry

AXP Strategy Results

APX Equity Curve

KO Strategy Results

KO Equity Curve

MSFT Strategy Results

MSFT Equity Curve

Mechanical Strategy
1) 8 bar ADX is > 45… similar to my ‘Paunch”

buy setup.
2) When price closes below an X bar lower Keltner
band, buy long
3) Place a stop to sell on a limit at the X bar upper
Keltner band… this will keep changing.

Fed Meetings

Fed Meetings
Stock Returns Over the FOMC Cycle
Anna Cieslak, Northwestern University

Adair Morse, U California Berkeley and NBER
Annette Vissing-Jorgensen, of California Berkeley, NBER
and CEPR1

Fed Meetings
Generally Speaking, Buy on Open of the 5th

Day before the FOMC report

Fed Meetings

Holiday Trading
Art Merrill
Quoting from his book inscribed to me in March
1968, he says:
“The day preceding a holiday is usually a good
day. The market has risen two thirds of the time.
In the case of a long holiday, the market has risen
71.8% of the time. These ratios are highly
significant… exceeded by chance…only once in
several thousand repetitions”.

Holiday Average Profit
By Month

Sell on 3rd Day
After New Year

Stocks Start the New Year
With a Rally

Martin Luther King
Second Holiday of the Year

Third Holiday of the Year
Presidents Day

Fourth Holiday of the Year
Good Friday

Fifth Holiday of the Year
Memorial Day

Sixth Holiday of the Year
Fourth of July

Seventh Holiday of the Year
Labor Day

Eighth Holiday of the Year
Thanksgiving

Walmart at Thanksgiving

Ninth Holiday of the Year
Christmas

Forecasting the Future

Forecasting the Future
 10 Year Pattern
 4 Year Pattern
 20 Year Cycle
 60 Year Cycle
 Cycle Matches

Thank You!
Thank you so much for your participation
Good Luck & Good Trading

- Larry Williams

Livre de Trading

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Disclaimer

 NO REPRESENTATION IS BEING MADE THAT ANY

 CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

Repeat after me…

©2015 LnL Publishing, LLC. All rights reserved.

1) The shorter you hold a stock, the more

2) Accounts that had done the best were the

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

The Average Annual Return From 1926, the

HAS BEEN 11.69%

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

“The strategy based on the spread between the

U.S. FEDERAL RESERVE PAPER

©2015 LnL Publishing, LLC. All rights reserved.

 Learn How Markets Top And Bottom

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

 Steep positive curve indicates investors expect

 Sharply inverted curve means investors expect

 Flat curve generally indicates investors are

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

Inverted Yield Curves

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

 When the Yield Curve is < 0%, Long

 When the Yield Curve is 0 – 2%, Long Us And

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.

©2015 LnL Publishing, LLC. All rights reserved.