Tuesday's Child is Full of Grace

This Tuesday was anything but graceful. The London morning started with both the stock indices and the Euro going south. Not just south, but we were in sight of the South Pole.

Then enough was enough and the mythical Plunge Protection Team came in and brought us back to the European opening prices by the U.S. RTH after giving us a heap of good trades, both up and down. It was an exhausting morning as I was spoiled for choice. We've developed an additional OrderFlow filter for Flo to be even more selective in her trades. Even so, she found 27 DAX trades just in the morning with a 66% win rate and low drawdown. I was also trading the Bund, the Euro, and the ES. It was a great morning. Let's see how the afternoon goes.

Chief Programme Officer

I was really interested to see an advert for a Chief Programme Officer in the Appointments section of the Sunday Times yesterday. This is still a rare event, but this job role is becoming better known and I think reflects the changes in how project and programme management is seen within organisations now. In the last five years there has been a growing recognition that programmes and all the

Trading and All that Jazz

On Saturday night Mrs EL and I headed to the other side of the lake to the Montreux Jazz Festival. It's an annual event on Lake Leman in Switzerland every July and is not just jazz in the purest sense. This year there were names like Sting, Santana, and Chaka Khan to name just three. There's a whole lot of free music as well with lots of good street food too. The town is packed by the cognicienti from all over the world. Great night!

Formula One race on Sunday was more interesting than usual due to the rule changes - moving the goal posts - sprung on the teams. The rule changes did their job and gave Ferrari the win it was after. I'm far from being an Alonso fan, but it was a great drive. Pity it was achieved the way it was.

At 7am here in France I was expecting weak stock markets when I woke up, due to Sunday's bearish news about both India and Euroland, not to mention Laguarde's comments about the U.S. lawmakers' putzing around with the debt ceiling. The big down wasn't there - yet?? Is the game that the Republicans want a double dip so that the Democrats lose the 2012 elections?  Bad news, good action or was it just a delay?


It's now noon here in France and I had a great morning. Crude, Euro, DAX, all were weaker and tradable. Looks like reality is finally setting in. The answer to the question above was that it was delayed action.

The European afternoon went well too. Great stock index trading.

I'm not sure what chart to show today but I've chosen the Euro, as it was the "easiest" to trade. By easiest, I mean that the rhythm was good and the trend was consistent. I've added a Crude chart as I don't post those often enough.

Launchers and Impossible Lessons from history.

NASA and DOD have spent a lot of effort on creating costing models for aerospace development. By the standard costing model the Falcon 9/Dragon should have cost 4B+ to develop. Using the most optimistic costing model it should have cost 1.6B. The documented actual cost is 390M. All of the traditional aerospace companies would have told you that it was impossible. Accepted "Facts" can be wrong. Spacex now has a backlog of > 3B. It looks like Spacex will be a business success with investment returns in excess of 10x. Elon has proven to be a brilliant business man in multiple fields.

Spacex has assembled a group of really talented people, many of them with a history in the traditional aerospace environment. If you read the bios on the Spacex web site here. You will discover that many of the senior engineering people came from large aerospace organizations. They used their experience to build the best rocket they could. They had a clean sheet of paper and enough resources to do the job.They fixed most of the business problems in the traditional aerospace model, they embraced vertical integration and the rejected the traditional aerospace supply chain. Win, win, win.

Now I'm going to ask you to get into your time machine.
Go back to the late 1970's. Take a large budget and go hire the best and brightest computer engineers from IBM, DEC, Prime,HP etc... . Give them a clean sheet of paper and allow them to fix any problems they see in the traditional computer business. Turn them loose and volia you have a killer minicomputer. It outperforms the DEC VAX and cost 1/2 as much. Its better than the rest of the industry in every way...... Instead of costing 120,000 or so it only costs 60,000. The orders pile up and the traditional computer companies would be worried. Meanwhile a guy named Wozniak with no degree and no experience designing computers is building a computer to impress his friends at the homebrew computer club. The Apple I soon to be an Apple II, in every measurable technical way the Apple II was inferior to the minicomputers of the day, except one, price. If you had asked the engineers from DEC,IBM, Prime, HP etc... to design you a useful computer that could be sold for less than 3000 they would have laughed at you.

So the question I ask is it possible to be a Wozniak in the space access area?

If its possible, you aren't going to get their via SBIR, because the SBIR evaluators with their reality closely tied to traditional aerospace model will be laughing.

You won't be able to do it by selling parts to other aerospace companies, IE Mr Wozniak did not start by building low cost memory cards to sell to DEC, the whole concept of modular cards and back planes as implemented in big computer land cost more than the whole apple I. The whole concept of separate bolt together components going into a launcher will need to be changed. The size scope and scale of what you build will not be appropriate for traditional aerospace.

Traditional aerospace customers will laugh at you and ridicule you... until one of you ends up unemployed and looking like a fool.

Clearly the microcomputer revolution was enabled by Mores law and the physics of space flight will not have any such exponential favoring factor.

Wozniak did not build any custom silicon, he use commercial off the shelf parts in new ways. I believe that modern CNC, 3D manufacturing and automated composite construction can be leveraged in a similar way.


This concept of comparing aerospace, old minicomputers and the PC revolution is not an original idea of mine. Charles at http://www.microlaunchers.com/ has used this comparison for years.
Frankly I never really got it. I thought it was a bit too much of a stretch. For the last 4 years I've been reading, studying and brainstorming on really low cost launch concepts. I've also been a rabid Spacex fan following what they are doing and cheering their success. In my though experiments I keep coming up with differnt solution concepts than Spacex. The Spacex solutions keep looking like traditional aerospace, but with much better execution, why is that? Is the traditional super high tech method the only way to achieve space launch? Then it dawns on me that Elon/Spacex hired the wizards from DEC, IBM, HP etc.. to build a better computer. In that context it ALL makes perfect sense.

Getting It On

The most important part of trading is getting the trade on. To make sure this happens, I have a detailed trading plan (TP). My trading plan has evolved over time and is still evolving. I make tweaks to meet market evolution too, although the basic methodology stays the same - identify the trend and trade the thrust after the pullback.


However, there are two categories of this type of trade: the first trade after a change of trend (the trend of the chart I am trading) and the continuation trades after a too early exit from that trade. The risk on each type of trade is different and the recognition of knowing when I'm wrong is different too. Stops should not be a matter of price but a matter of what's happening in the context. If price has to move too far against me before I would know I am wrong, I pass the trade.


Lengthening the CCI can help identify the trend when there is more noise (chop) in the market. Sometimes I use 90, 135, 180 or more instead of the 45CCI. Trend identification is of prime importance.

Spread the love

Hi Everyone

It's been another exciting week with some huge tasks tackled. A new interactive poster has been launched to help spread the word to customers and allow them to sign up to the new customer email newsletter with their phones.

The posters are being put up in childcare centres, libraries & sporting centres around Melbourne. Help us spread the love by posting on your facebook, twitter and website. Email us if you would like to request a hi res file to print and put up in your local childcare centre.

We have also revised the floor plan to add in some extras like a changing and quiet feed room for customers, a gym for the design hub team and the party room. Head to The Layout to see the new plan.  

OK, drum roll please..... The on consignment percentage rate is now available! Most stores charge 40-50%, so we think ours will leave you pleasantly surprised. Read about it here.

The studio rental rate will be emailed to all those who have expressed interest in possibly renting a studio, over the next 2 days. Please note that most designers will find on consignment the most viable option but for those of you who have started thinking about having your own shop but it's still too risky and expensive, our studio hub is an affordable option.

Happy Designing

Nicole Herrick
Kids Style Hub

Big News Week

Lots of news this week, not the least of which is the ECB comments today after their announcement and also the U.S. monthly jobs report tomorrow, Friday.


News equals opportunity, but timing is everything. Sometimes there is chop before the announcements due to analysis paralysis and fear. Other times people front run a report only to be either disappointed or exiting on the fact after trading the expectation. Trying to work out what is actually happening is worthwhile as it will have an impact on the bottom line. My concept of envisioning the day helps this process.


Today there were a couple of good moves in the Euro in the morning and then after the ECB and ADP the markets ... well look at the pic.