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Technical Analyst Books 1,580% Gain
Profile: John Lansing

Trader profited from commodities bubble by shorting fallen leaders
BY TRANG HO INVESTOR'S BUSINESS DAILY
2008-10-10

The same type of pattern that happened in commodities this summer happened with the dot-coms in 2000
As most investors writhe in pain from the market meltdown, John Lansing says he’s celebrating the best year he’s ever had. He says his portfolio has rocketed 1,580%, with a combination of stocks, ETFs, currencies and options.
Lansing, who uses technical analysis to trade, provides analysis to Wall Street’s bigwigs at UBS (UBS) , Bank of America (BAC) , Morgan Stanley (MS) and Merrill Lynch (MER) , and his advisory firm http://www.Trending123.com.
In the second week of July, he says he foresaw a bubble popping in commodities that would make “the housing bubble look like a day at the beach.”
He projected oil would drop to $90 a barrel by Sept. 30. It fell below $87 Thursday. He now sees it falling to $65 by Christmas.
Lansing also alerted subscribers at that point to go short anything commodity-related, except for gold. He said hedge funds were over-leveraged 30-to-1 in the past year’s hottest sector. Prices would fall fast and furious as they had to unwind their trades to meet margin calls.
Gold, a traditional storehouse of value in times of crisis, is a different story. He projects the yellow metal, which settled at $886.50 an ounce Thursday on the Comex, will reach $1,000 by Christmas.
Lansing says he shorted Potash Corp. of SaskatchewanPOT at 220 in July. The leading fertilizer stock, which tripled in the past year, has since fallen 58% from its peak.
He achieved mammoth gains from shorting and buying puts on AKS Steel (AKS) , United States Steel (X), Monsanto (MON) , CF Industries (CF) , EOG Resources (EOG) and Apache (APA) .
A key signal for these trades was the rising wedge.
“The same type of pattern that happened in commodities this summer happened with the dot-coms in 2000,” Lansing said. “And according to this pattern, there’s a 95% chance it would repeat.”

Crude Wedge
The base of the wedge in crude oil started at the $65-a-barrel level. It rose to a peak of $147, forming the length of the wedge. He expects oil to fall back to where it started from, erasing all of its gains for the year.
Lansing admits at the beginning of the year, he believed large-cap tech stocks such as Apple (AAPL), Research In Motion (RIMM) and Google (GOOG) would be immune to the commodity-led market sell-off this year.
But they too fell prey. He realized they were going down with the ship in August. He later shorted Apple at 160, RIM at 100 and Google at 400.
With the exception of a bad call on Western Refining (WNR) , Lansing says he’s had 49 winners out of 50 trades this year.
He doesn’t expect to repeat this year’s exceptional performance, at least not for a long time. And of course, past performance never guarantees future results. He says his picks have earned an average of 85% a year since he founded his Web site 12 years ago.
He started trading in 1990. He was 22 years old and putting his college degree in hotel restaurant management to use at Marriott. He says he turned $2,000 into a cool million in the market.
Thus, he discovered his calling and quit his Marriott job after six months. “So basically, I went to school for nothing,” he said.
He taught himself how to trade by studying charts, reading IBD and investment books, and using Recognia, a charting and pattern-scanning software employed by major brokerage firms.
In his early years, he would make money and then lose it again and again. He started becoming consistently successful when he was 28. Along the way, he learned to cut losses at 8% and limit position sizes to 2%-5% of his portfolio.
For the most part, Lansing dismisses the news as noise and believes everything a trader needs to know about a stock is packed into its chart.

Analytical Method

As the name of his Web site implies, his stock picking has three key elements. His technical tools are calibrated to determine the potential speed, direction and distance of a stock’s movement. Chart patterns he uses include the double bottom and cup with handle.
He uses three oscillators, Williams %R, Aroon Indicator and price percentage oscillator (PPO), to provide signals on direction.
This week, Lansing cleared his positions and went to cash because the Dow hit his downside target of 9800.
“We’re in the ninth inning of the sell-off, but we’re not quite up to the batter’s plate to go long anything yet,” Lansing said. “But things are looking better.”
And when things do get better, Lansing recommends buying sector ETFs in steel, agriculture, biotech, coal, basic materials and gold.
With all the technical tools at his disposal, how will he know for sure when the uptrend starts? When stocks stop going down.