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Star Options Trader Charles Hughes Sees the Greatest Bull Market in Stocks in Our Lifetime
My guest on Hedge Fund Radio this week is star options trader, Charles Hughes, of Legacy Publishing LLC. Charles has developed his own highly profitable and disciplined trading strategy which he markets under the names of the Market Volatility Profits Secrets, The Global PowerTrend System, and The Wealth Building Formula.
Chuck’s proprietary indicators are telling him that we have just entered the greatest bull market for stocks in our lifetime. If the market reverts to the mean and makes up for the recent lost decade, then we should earn 22% a year over the next decade. We have a lot of catching up to do.
Chuck’s advisory service offers five different trading strategies which he updates real time at his website. Stop losses and strict risk control insure that 60%-70% of his trades are profitable.
Chuck started out 25 years ago as a “systems trader” and was soon making so much money in the market that he was able to take early retirement and devote himself full time to trading. Through a long period of trial and error, he has refined his system to deliver the eye popping results that he is getting today.
Chuck has a three step process to identify winners. First, he employs 50 and 100 day exponential moving averages to establish medium term price trends. When the 50 day average is over the 100 day you are in an uptrend. As a backup, he looks at the one month versus the 20 month EMA to give a longer term confirmation. Chuck never likes to trade against the trend.
Second, he subjects his picks to a number of other filters. He narrows his focus to stocks making new 52 week highs. These are companies where buying pressure is overwhelming selling, giving them powerful upside momentum. Another is an up sloping “On BalanceVolume Line” to see where the size money is going. Third, is to pick a good entry point. For this he uses “Keltner Channels” to illuminate overbought and oversold price levels. A break below a lower Keltner Channel is a major buy signal with a high probability of success. All of this data is easily available through public websites, like www.stockcharts.com .
To pick a winning options trade, a number of additional hurdles must be breached. Chuck favors putting on deep in-the-money call spreads which have lot of intrinsic value, but minimal time value. Durations are four to six months. Deep in-the-money option spreads can profit if the underlying stock increases in price, stays flat, or falls as much as 20%-30% in price at expiration. The deep in the money call spreads work particularly well in today’s volatile markets.
Chuck is based in the bucolic coastal village of Carmel, California, which enables him to do some world class hiking whenever he likes. He has become one of the top producing options traders in the industry. In 2009, a year in which many traders got trashed, Chuck brought in a stunning 122% return. That approach enabled him to win the International Trading Championship no less than seven times.
Chuck started out life as an Air Force pilot (C-141’s), and later went on to fly for a major US airline. He believes the discipline he learned in the military has been a key to his own personal success in the markets. As a former jarhead pilot who flew in Desert Storm myself, I couldn’t agree more.
To learn more about Chuck Hughes and Legacy Publishing, please visit his website at http://www.chuckhughes.com/ . To listen to my interview with chuck Hughes on Hedge Fund Radio in full, please go to my website by clicking here at http://www.madhedgefundtrader.com/november-18-2010-chuck-hughes.html .
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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This guy is an airforce pilot ASWELL? He is either a quality bloke or a grade A+ bullshitter.
I absolutely love MHFT's posts. Thanks ZH. It has taught me that hedge funds are just individual investors that can take huge gambles because, after all, it's someone else's money.
"Stop losses and strict risk control insure that 60%-70% of his trades are profitable."
Flash crashes make stop losses obsolete. Investors no longer have any risk management, other than very small positions. Which is why I am out and will stay out until prices crash, or market mechanics are fixed.
Thanks chuck for the upchuck.....I think I'll pass
Can you profile a witch-doctor or shaman or somebody like that next time?
How about a 3x short ETF on stocks that Frost & co have audited? That should rightfully be called a downward bubble.
Here's one to look over: HRBN
15 going on 11
http://stockcharts.com/charts/gallery.html?hrbn
There is a very serious possibility we have a BANK RUN December 7th. Please watch and share this video with the people you care about (http://youtu.be/U0KGv3Xw0KY). Thank you.
Anonymous-
This is really scary guys, people are already talking about it and it has spread from France to the UK and now coming to the United State.
In real terms, there will be nothing of the kind.
The top is in for this cyclical bull.
I'll buy the next cyclical bear plunge, thank you.
On another note, when should I buy the market to catch that end of day rally? One o'clock? Two o'clock? Or should I wait until 3:00 EST?
So, did you have lunch with Charles Hughes?
I could go broke waiting for the 'revert to mean." Revert to mean sometimes takes decades to play out. If the market goes higher it will be because Ben and Timeh have crashed the dollar.
(whisper) "I see broke people."
I have a different model.
I find a company with a great products and bright shining talent, and with the financial director not in a position of power. And I make sure they employ serious sales & marketing talent.
Then I give them money, and they give me a slice of the business. Then we all remain friends, and prosper together.
And I stay well away from the festering swamp that is the contemporary markets. *
You will all get burned to a crisp.
* It has absolutely nothing to do with fundamentals any more, & I don't give a flying fig-leaf for the 50 dma, the reverse crossing shalko with double-twist & a pike, or the up-chucking volume trend. If you are going to play that game, forget all your morals and just stick to insider dealing.
Hi, this is Abby Joseph Cohen, not TIS.
And I highly recommend you buy all equities, indiscriminately, with both hands, using leverage.
Buy all you can. Borrow all you can to buy. I see tremendous valuations and huge P/E expansion here and now.
My target for the S&P is 3,000 by mid 2011.
My past calls have been about as bad as they get, but I'm over that now, and you can trust me.
Thank you.
This is my favorite quote
[If the market reverts to the mean and makes up for the recent lost decade, then we should earn 22% a year over the next decade. We have a lot of catching up to do]
The reason we had a lost decade is that we started out at bubble valuations in 2000 (in fact the 2001 peak was the highest in terms of P/E and price to book ever achieved between 1900 and 2000 for the S&P 500)
To revert to the mean there is a long way down to go, typically DJIA dividend yields fluctuate between 3% and 6% and we are now at 2.5% with the DJIA total dividend at 280. If you assume a 6% dividend yield then that gets you to DJIA of 4,600 a 10% yield which was achieved in 1930s gets you to DJIA 2,800
My guess is substantially higher interest rates will cause valuations to come down significantly
Higher interest rates were going to call the end of the boom as Rosenberg called in August 2004 and the Fed agreed. The best bet is that it won't be higher interest rates again.
As of right now, we still have a large number of stocks breaking out to new 52-week highs.
As long as this continues, his thesis is correct, and we are in a bull market of a lifetime.
The 2008 lows was a once in a generation opportunity to buy stocks on the cheap.
Never before have I seen so many 4, 5, 6 baggers in 18 months.
As long as this continues, his thesis is correct, and we are in a bull market of a lifetime
And when/if it does not continue, is his thesis incorrect, and are we in the bear market of a lifetime?
Never before have I seen so many 4, 5, 6 baggers in 18 months
Where were you in 2003, 1990, 1987, 1984, 1982, 1974, 1970, 1966, 1962, 1958, 1949, 1942, 1938 and 1932?
http://stockcharts.com/charts/historical/djia1900.html
The 2008 lows was a once in a generation opportunity to buy stocks on the cheap.
See above or Doug Kass
All equity market bottoms have occurred when the dividend yield and P/E of the Dow were on par with one another. Needless to say that did not occur in 2009 which makes sense since debt purging has only begun. Equities could go higher short-term but valuations are not compelling at these levels.
Just when my stock is printing 52 week high, I'll buy the break-out below the Keltner Channel to ensure a high probabilty of success. I got it; don't need him now!
So many alarms should go off when reading this fanasy piece.
Maybe he can through in some bollinger bands and stochastics to hit every hot button.
I wonder if Goldman is on to this strategy of devising a great trading system and then selling it?
In John Bollinger's book on his bands, he offers 20,2 as the standard parameters for ordinary BB and BBs within BBs for trend following with 10,1.2 for the inner band parameter. Skip all subscriptions to secret sauce recipes and just sprinkle celery salt on whatever you're serving. Black Swan and Chicago hot dogs with celery salt __ fantastic!
Boo-Jah - I'm going all in on this groundbreaking information. You skeptical suckers are going to regret your snide cynicism. I'll wave to you from the sandy shores of my private island in the Caribbean - just don't touch my beach or my private security will be all over you' ass!
For 20 years, some have said the Nikkei would go back up to 40,000 too.
This time around things are different for everybody. Old models do not apply.
Perhaps he means the US stock market will finally outperform Zimbabwe's stock market.
Cooter
<edit for grammah>
>>Perhaps he means the US stock market will finally outperform Zimbabwe's stock market.,<<
No way.
Dow 100K by 2015 as long as the FED can keep pumping up it's balance sheet to infinity. The Ben Bernank will buy from the Goldman Sachs to give to the Fools on the Hill to spend as they see fit. Zimbabwe has nothing on the United States of Amerika.
My "proprietary indicator" is my chicken bone model and it signals the ice age is coming to town. And my secondary indicator, tea leaves, signals it's coming fast.
You don't use quail entrails? You're an idiot.
Pssst... hummingbird tongues.
raccoon tongues...they deliver baby!
My old lady agrees...
So it's important to pick a key entry point. Good tip.
Here's the key question:
If he's wrong and the lifetime bull market does NOT occur will he and you reimburse us ALL the money we lost or didn't make?
If you can answer 'yes' to that, I'll buy his newsletter.
I was prepared to hate this article. But WHOA! This is some good stuff!
TO the haters and skeptics, did you even read the article?? This isn't some Mad Cow, Mad Money, Cramer bullshit. This is cutting edge analysis...that if you would actually take the time to digest, it would actually allow you to tap into some REAL Wealth Secrets.
Consider this nugget, straight from the article:
"First, he employs 50 and 100 day exponential moving averages to establish medium term price trends. When the 50 day average is over the 100 day you are in an uptrend. "
Holy Smokes! Did you just read that?!?! A Moving Average Crossover!! It's pure GENIUS! I've never heard of such a thing. THIS IS A REAL WEALTH SECRET. Thanks MadHedgeFund Trader!
Trying to see the light behind several layers of "blinds" or filters leaves you and your followers in the dark. At that point, a brilliant tale from a dim bulb sounds swell.
http://www.youtube.com/watch?v=tf7SZ_WoC4o
Secrets!
Kinda like, "When the sun comes up you can see better!"
It's definitely revelatory.
Do you think he would agree that it's a good idea to buy low and sell high?
no,no.. the big secret.. buy high, then sell higher..fekin brilliant
The only thing this article proves is that mathematics miserably fail when trying to predict the future.
Three reasons to stay away from stocks: 1) The market has changed. Millions of boomers are out for good (fool me once) and have learned their lesson. 2) Stocks are redeemed for FRNs which are becoming more worthless every year. 3) The growth in stocks from 1988-2001 was unique in history. But that's his paradigm.
bull run or no bull run....... I don't care !! ....don't give a damn, let that bull go without me, cause I'm BROKE after the past 20 years of the FEDERAL RESERVE BANK & so are a lot of my friends....... first we all pile into the stock market cause that sure does look good !!, then, we all buy a nice new condo cause that sure does look good !! ..... just let that bull ride away......I'm not on it.
BUCOLIC COASTAL VILLAGE?? that was a joke right?
buttercups and moo cows bitches....
My bullshit alarm always goes off when I read 'X has developed his own highly profitable and disciplined trading strategy which he markets under the names of the Market Volatility Profits Secrets...'
If you have a profitable trading system, why the fuck would you ever sell it to someone else, much less let anyone know it exists?
You people have a supernatural belief in magic bullets, black boxes and gnostic trading heroes.
Investing in magic bullets works best when you own cases of them. So if Citizen X has bought $20k in 30-06 mgc he should also have a few rifles to fire the magic bullets too.
I Googled Legacy Publishing LLC and found that they publish exactly two books:
http://www.legacypublishers.com/titles.html
And his investment philosophy is obviously technicals over fundamentals. I don't buy that method.