thalestrader

Current view of EURJPY ... the short is working and lookng better, but both bull and bear scenarios still alive ... Best Wishes, Thales

You and I both know that he would not have held short through a nearly 100%, 14 month long bull swing. Remember that his tipster was covering after a seven point rise in hope of buying again at a lower price following, presumably, a 3 to 3.5 point reaction You say "current" bear, but I see a bull market that started in March of 2009. I do not see a new bear. I do see that the new bull is currently in its first reaction of like degree to its bull move from the '09 low. That reaction may have bottomed at 9614, or it may have yet to bottom. Your "initial bear target" is also a possible target for this reaction to bottom. But the bear, such as it was, is dead. To put things in perspective, here is the Yearly chart of the industrials back to 1916 ... Best Wishes, Thales

Current view of EURJPY ... price still within a nearly three week old trading range and all possibilities, bull and bear, are still open. My daughter is still short from 112.00 and 109.00, with stop and reverse at 109.75 ... Best Wishes, Thales

I knew you'd appreciate that quote, Blowfish, and I was thinking of you when I posted it. Many have read Reminiscences, but few have come to own it as you have. "Old Turkey's" wisdom is the one "secret" that truly can make you rich. Best Wishes, Thales Most let us call'em customers -- are alike. You find very few who can truthfully say that Wall Street doesn't owe them money. In Fullerton's there were the usual crowd. All grades! Well, there was one old chap who was not like the others. To begin with, he was a much older man. Another thing was that he never volunteered advice and never bragged of his winnings. He was a great hand for listening very attentively to the others. He did not seem very keen to get tips -- that is, he never asked the talkers what they'd heard or what they knew. But when somebody gave him one he always thanked the tipster very politely. Sometimes he thanked the tipster again -- when the tip turned out O.K. But if it went wrong he never whined, so that nobody could tell whether he followed it or let it slide by. It was a legend of the office that the old jigger was rich and could swing quite a line. But he wasn't donating much to the firm in the way of commissions; at least not that anyone could see. His name was Partridge, but they nicknamed him Turkey behind his back, because he was so thick-chested and had a habit of strutting about the various rooms, with the point of his chin resting on his breast. The customers, who were all eager to be shoved and forced into doing things so as to lay the blame for failure on others, used to go to old Partridge and tell him what some friend of a friend of an insider had advised them to do in a certain stock. They would tell him what they had not done with the tip so he would tell them what they ought to do. But whether the tip they had was to buy or to sell, the old chap's answer was always the same. The customer would finish the tale of his perplexity and then ask: "What do you think I ought to do?" Old Turkey would cock his head to one side, contemplate his fellow customer with a fatherly smile, and finally he would say very impressively, "You know, it's a bull market!" Time and again I heard him say, "Well, this is a bull market, you know!" as though he were giving to you a priceless talisman wrapped up in a million-dollar accident-insurance policy. And of course I did not get his meaning. One day a fellow named Elmer Harwood rushed into the office, wrote out an order and gave it to the clerk. Then he rushed over to where Mr. Partridge was listening politely to John Fanning's story of the time he overheard Keene give an order to one of his brokers and all that John made was a measly three points on a hundred shares and of course the stock had to go up twenty-four points in three days right after John sold out. It was at least the fourth time that John had told him that tale of woe, but old Turkey was smiling as sympathetically as if it was the first time he heard it. Well, Elmer made for the old man and, without a word of apology to John Fanning, told Turkey, "Mr. Partridge, I have just sold my Climax Motors. My people say the market is entitled to a reaction and that I'll be able to buy it back cheaper. So you'd better do likewise. That is, if you've still got yours." Elmer looked suspiciously at the man to whom he had given the original tip to buy. The amateur, or gratuitous, tipster always thinks he owns the receiver of his tip body and soul, even before he knows how the tip is going to turn out. "Yes, Mr. Harwood, I still have it. Of course!" said Turkey gratefully. It was nice of Elmer to think of the old chap. "Well, now is the time to take your profit and get in again on the next dip," said Elmer, as if he had just made out the deposit slip for the old man. Failing to perceive enthusiastic gratitude in the beneficiary's face Elmer went on: "I have just sold every share I owned!" From his voice and manner you would have conservatively estimated it at ten thousand shares. But Mr. Partridge shook his head regretfully and whined, "No! No! I can't do that!" "What?" yelled Elmer. "I simply can't!" said Mr. Partridge. He was in great trouble. "Didn't I give you the tip to buy it?" "You did, Mr. Harwood, and I am very grateful to you. Indeed, I am, sir. But --" "Hold on! Let me talk! And didn't that stock go up seven points in ten days? Didn't it?" "It did, and I am much obliged to you, my dear boy. But I couldn't think of selling that stock." "You couldn't?" asked Elmer, beginning to look doubtful himself. It is a habit with most tip givers to be tip takers. "No, I couldn't." "Why not?" And Elmer drew nearer. "Why, this is a bull market!" The old fellow said it as though he had given a long and detailed explanation. "That's all right," said Elmer, looking angry because of his disappointment. "I know this is a bull market as well as you do. But you'd better slip them that stock of yours and buy it back on the reaction. You might as well reduce the cost to yourself." "My dear boy," said old Partridge, in great distress "my dear boy, if I sold that stock now I'd lose my position; and then where would I be?" Elmer Harwood threw up his hands, shook his head and walked over to me to get sympathy: "Can you beat it?" he asked me in a stage whisper. "I ask you!" I didn't say anything. So he went on: "I give him a tip on Climax Motors. He buys five hundred shares. He's got seven points' profit and I advise him to get out and buy 'em back on the reaction that's overdue even now. And what does he say when I tell him? He says that if he sells he'll lose his job. What do you know about that?" "I beg your pardon, Mr. Harwood; I didn't say I'd lose my job," cut in old Turkey. "I said I'd lose my position. And when you are as old as I am and you've been through as many booms and panics as I have, you'll know that to lose your position is something nobody can afford; not even John D. Rockefeller. I hope the stock reacts and that you will be able to repurchase your line at a substantial concession, sir. But I myself can only trade in accordance with the experience of many years. I paid a high price for it and I don't feel like throwing away a second tuition fee. But I am as much obliged to you as if I had the money in the bank. It's a bull market, you know." And he strutted away, leaving Elmer dazed. What old Mr. Partridge said did not mean much to me until I began to think about my own numerous failures to make as much money as I ought to when I was so right on the general market. The more I studied the more I realized how wise that old chap was. He had evidently suffered from the same defect in his young days and knew his own human weaknesses. He would not lay himself open to a temptation that experience had taught him was hard to resist and had always proved expensive to him, as it was to me. I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling the other customers, "Well, you know this is a bull market!" he really meant to tell them that the big money was not in the individual fluctuations but in the main movements that is, not in reading the tape but in sizing up the entire market and its trend. And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level, which should show the greatest profit. And their experience invariably matched mine -- that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance. excerpted From Edwin Lefevre's Reminiscences of a Stock Operator

Well, this is a bull market, you know! If you really want my thoughts, I'll give them for free, which is still a price much higher than they're worth: Technically, if the SP-500 closes above 1220 on a weekly basis, then I will be expecting 1500+. When? Who knows? Three quarters? Five? A couple of years? It doesn't matter, the trend is up from the March 2009 low, and it will have been reconfirmed as up. If, on the other hand, SP-500 breaks and holds below 1010, then I would be looking for a low around 950 +/- ten or twelve points. Fundamentally, the history of the world is a history of growth. So long as there are people, businesses will innovate and economies will expand. One last thought, when so many are predicting a coming apocalypse, and when such opinions are, remarkably, considered sane and acceptable rather than crazy, then I have to take the other side of that trade. If I may defer to a religious analogy: Even the Son does not know when the Father plans to bring about the end of days. And if the Son doesn't know, then neither does Prechter nor Faber nor any other newsletter writer or market prognosticator. I assume the sun will rise today, tomorrow, and the next day, and that it will continue to do so aslong as I live. Until it doesn't, I'm bullish on humanity in general, and America in particular. Best Wishes, Thales Ignorant of the coming apocalypse, and happily so

All very good observations, snowbird. For me, my main point of hesitation is that while volume on the prior breakout was much higher than average, volume on this breakout was well below average, and volume continued to decline as price has worked higher. I have overlooked many "imperfections" in a chart patterns (i.e. bases) over the years. The one thing I do want to see, however, is for volume to swell when price drives through resistance. Best Wishes, Thales

Ok folks, Here is the daily chart of HTHT, a stock on my Buy Watch list. What do you think of this breakout? Best Wishes, Thales Don't forget to join the Intelligent Plan Game at Marketwatch's Virtual Stock Exchange: http://vse.marketwatch.com/Game/StartViewGame.aspx?id=SpeculatorKing

Hi Folks, I have just started a Virtual Trading Game at Marketwatch's Virtual Stock Exchange that I am administering as part of my blog's search for an intelligent plan aimed at doubling my money. It is a friendly little paper trading competition, and I would hope to see many of you there. If I can get at least ten participants, I will start a thread here at TL where I can post the weekly leader board, and the participants can post charts, discuss trades, etc. Unlike "The Race," the focus is not on day trading a live account, but swing trading a virtual account. I would hope this would make it easier for folks to join in, and also less distracting from the day to day actual trading by those who do indeed trade for their daily bread. You can sign up by following this link: Virtual Stock Exchange - Home Trading opens on Tuesday, September 7, 2010, and the competition ends at the close of trading on September 2, 2011. If all goes well, I will sponsor the game again the following year, and run it from US Labor day to Labor day. If not, well, nothing ventured nothing gained - and there is really no risk to running a paper trading contest, is there? You can read a few more of my thoughts about it at my blog: The Speculator King: The Speculator King - An Intelligent Plan Competition I hope to see you there! Best Wishes, Thales

"Everyone gets what they want form the markets." -Ed Seykota You can trade for excitement, or you can trade for profit. I doubt that you can trade for both. Don't get me wrong. I enjoy trading. But honestly, once I'm in a trade, I set my stops and targets and my audible alarms. Then I read books, or TL, or work on a blog post, or since it is summer, I go outside on the deck and watch the hummingbirds, tend to the garden, ride bikes with my kids ... you get the idea. You certainly do have the choice, at least for now. So as long as we do enjoy the freedom to choose for ourselves, only you should choose your life ... the only question for you to ask yourself is "is this life worthy of my choice." I'm not at all comfortable with the notion of granting or denying blessings - as a mere human creature, I have no power to bless and thus no blessing to give or to withhold. I can only do with you as I do for everyone - I wish you the best that life has to offer. I have never said that my way was the only way, and I certainly have never said that there is only one way to do it my way. In fact, it is not "my way" at all, but simply the way I choose to do things. None of what I do is original with me. And if you read my last post, I never said you were wrong. You asked me why I wouldn't do it your way. My answer was "I'd rather trade this than that." Your response here is that you'd rather "trade that than this." There is no conflict here. Now, if I had said that my way was the only way to trade, and if I had also said that the only way to trade my way was to do so exactly as I do, and that this is the only way to do it right always, and without exception, then we would have grounds on which to disagree. There are plenty of folks here at TL and elsewhere who make such claims in their threads about their methods, systems, and approaches. But I am not one of them and this thread is not one of those. My way is not the only way to trade. The way I employ my approach is not the only way to use it profitably. You don't need me or anyone else to tell you whether or not you are wrong. The market has a built-in, immediate feedback system called "profit or loss" to tell you that .You will know you are right if you make a profit. You will know you are wrong if you go broke. Best Wishes, Thales

Hi Folks, NASDAQ followed-through today - the market is now in a confirmed uptrend as far as I'm concerned. I posted a bit about it on my blog: The Speculator King: NASDAQ Follows Through - Market in Confirmed Uptrend Best Wishes, Thales

After the first buy point (the 123 off the low) I would usually wait for a new scale in point above the 61.8% fib of the entire decline. Your buy point has the benefit of being in the upper half of the base, though just barely. Once a decline is retraced by a 61.8% rally, and pricethen tries but fails to resume a decline, my experience has shown such rallies are more likely to succeed at carrying a fair way higher. In other words, if a large move is retraced by 2/3rds or more, and then price tries but fails in an attempt to reassert the direction of the larger move, then odds favor that the retracement is actually a full-on reversal. Make sense? It is not 100%, by any means (what is, after all?). By he way, I am pretty sure Marko made just this point at some time in this thread - I couldn't find the exact post, but I did revisit an excellent series of posts by Marko starting with this one found here: At any rate, a case could be made to buy at the point you note, and I would not criticize anyone who did just that right there at that point. Just realize a quick shakeout is more likely than not, so set your stop accordingly, or be ready to buy back in at a higher price if stopped out on the entry. Best Wishes, Thales

Look at this 15 minute EURUSD from today and you should see why I feel as I do. That doesn't mean you'll agree with me. But you should at least be able to see why I prefer to trade as I do ... Best Wishes, Thales

Current view of the EURJOY shows price working its way lower, but all possibilities are still open ... Best Wishes, Thales

For me, what is important is learning to see the S/R levels at which price, i.e. the market, will need to make a decision. That decision is always to continue, to consolidate, or to reverse. That is all the market can do - and each excludes the other. Once I learned correctly to identify these "areas of decision," the next step was to determine just how I would decide which decision the market was making, and how I would trade based upon that decision. I decided ultimatley to rely upon certain patterns of price action, i.e. market behavior. These patterns repeat themselves. You can find them on charts of all time frames. You can find them on weekly charts from the 1860's and on 89 tick charts of the ES today. Others may choose to use moving averages, various oscillators, indicator divergences, etc. and so on to determine what decision the market is making and how and when to enter, i.e. make a trading decision. Time frame, i.e. how one chooses to bundle and summarize price information is really a matter of personal convention and the method one uses to determine market direction and make trade decisions. I actually prefer to use range charts when trading currencies. I adjust the range size depending upon current volatility in general, and the volatility of the session in particular. This range varies between bars with as few as 7 ticks and as many as 40 ticks. I use fifteen minute charts here because they tend to be a good "all purpose summary" view. If you are day trading, and if you are trying to play for a swing 1-2 times/day rather than scalp for ticks 4,5 or more times each day, then you need to select fro yourself a time fram, range, point and figure box size, Renko, ect that lets you see in real time the information that you are using to 1) determine what the market is deciding to do and 2) how you are going to trade based upon that information. What works for me likely will not work for someone else. And what works for me in one market does not necessarily carry into another. For currencies, I use range charts, and if I do use a time based chart, it will be a fiftenn minute more likely than anything else. But when I day trade stocks, I rarely look at anything other than a five minute chart. I know we've talked a lot in this thread about "seeing" price. "Seeing" really means understanding and interpreting. The way you chart price must be one in which you are able to come to see price. I would suggest that you try a few different ways out. But don't just flip through from this to that - pick a time frame and then spend a few days watching price unfold on that time frame before you decide that yes this works or no this doesn't. Experience, more than anything else, certainly more than anything I can say, will be your ultimate guide. Best Wishes, Thales

Current view of the EURJPY show price rallied back to test the most recent breakdown point at 109.00 as resistance and is now falling again. Price may break last week's low and fall to new lows, price might now test last week's low as support and reverse, or price may already be in the process of reversing, and this drop from the prior breakdown point is the "3" of a "123" long opportunity ... Best Wishes, Thales

Hi Folks, I just published the weekly review of my intelligent plan aimed at doubling my money at my blog: The Speculator King: An Intelligent Plan Weekly Review for the Week of 8/23/2010 Best Wishes, Thales

ES continues to trade between a rock and a hard place ... Best Wishes, Thales

Current view of the 5 minute ES ... Best Wishes, Thales

I primarily day trade the 6E, 6B, 6J, and consider the three to be nearly "one market," and I simply look for the best opportunity of the moment for day trading. I day trade stocks for a group of investors (though not much the last three months) because that is what they want me to trade. I swing trade stocks and futures. There are, at any given time, maybe 10 stocks worth following, and of the 15 or so futures markets, typically no more than 1-3 representing a potential opportunity. And swing trading is end of day stuff, and the monitoring and decision making occurs at a much more "leisurely" pace than day trading requires. Day trading pays well when done well. Day trading will bankrupt you if done poorly, since if you are trading all day, you probably do not have another source of income, i.e. a job. Swing trading is what will make you wealthy. You might go broke, but probably not insolvent from poor swing trading, since you probably still hold another source of income, i.e. a job. For what its worth, my own opinion is that one would have a better chance of taking enough from the markets to lose the day job by swing trading stocks and futures and currencies for the intermediate swing than you do day trading your way into a living. I did not begin day trading until after I was doing very well swing trading for quite a few years. And in spite of doing well swing trading, my initial years as a day trader were nothing short of a disaster. Day trading is tough stuff. But it can be done, and it can make you phenomenal multiples of your capital fairly regularly. If you have the attitude and the dream, I will continue to defend day trading as a way to take an enormous amount of money out of the market. But it can kill you too. I would suggest that for a new trader who insists upon day trading, he or she should focus on one market, and the focus should be on trying to identify the main intraday swing, rather than trying to scalp for a handful of ticks. In any event, the goal should be to learn to trade. I learned to trade from my father, who read Darvas as a teenager and who was an early subscriber to IBD. I have an early printing of Darvas that my father has owned since 1960-1, and I also have a casette tape of William O'Neil explaining CANSLIM that my dad got when he first subscribed to IBD in '84-'85. I was 16 when I read Darvas and O'Neil's books for the first time, and I was 18 when I bought my first stock - I bought Adobe systems in '86-'87 for $10/share and I sold it for just over $40 maybe six months later. I was hooked. I've been buying stocks ever since. I started trading futures in '93-'94. I basically applied the same chart reading principles I learned from Darvas and O'Neil to futures. For the most part I did very well, though I did have two rather spectacular explosions, both caused by ill-organized pyramiding of highly leveraged futures. My early attempts at day trading, on the other hand, were dismal, largely because I thought it was "different" from swing trading. I started to use every sort of indicator. I bought systems and software. I read every book, I bought tapes, videos, and I subscribed to newsletters (back then they wer fax services rather than on-line "trading rooms," etc. and so on. Like I said, it was a disaster. What finally set my day trading aright was that I came to realize that the same patterns of price action I was looking for in daily and weekly charts were occurring on the intraday charts. Then I discover Trader Vic, and added his 123 and 2B to my way of viewing price action, and what do you know? I was able to get moving in the right direction. This thread has been a real time demonstration of how I day trade. Nothing has changed from its beginning through this post. I started this thread from where I am now. I am staring the blog in such a way as to show where I began, and then I hope to recreate how I got here. It is basically the same path my daughter took. The difference is that it took me nearly twenty years to be able to do what she learned to do in three to six months. But she is a lot smarter than me. And she focused very early on on just one market - the EURJPY. And that is still 95% of her trading. Best Wishes, Thales

Hi Folks, Here are two daily charts of a stock that is on my watch list as a potential buy if it is still acting strong when the market flashes its next rally attempt and follow-through day: You can see that even though the market was generally weak yesterday, this stock seems to be in its own private bull market: As far as what I am looking for when I speak of "rally atempts" and "folow-through days," I posted a short explanation on my blog in response to e recent comment I received from an earlier post. You can read it here: The Speculator King: When to Buy Stocks: On Rally Attempts and Follow Through Days I have also posted my entire Buy Watch list with charts on th Buy Watch page at the blog which you can find here: The Speculator King: Buy Watch Best Wishes, Thales

I agree. TRO may never hit first, but the fact that he hits back at all has caused many to overlook the potential usefulness of much of his work. Of course, many also have a problem with his "donational" package of indicators for which he does require a payment. So what? It seems he gives much more for much less than most who make a business of selling their programming creations to traders. Some find it disagreeable that TRO is an IB for a forex broker. Again, so what? If the guy gives something of value, and if he provides support to those who are using his indicators, why should he not make a return on the time he invests in providing that value? Best Wishes, Thales

Hi folks, I just updated the chart of the day at my blog with a current view of the S&P 600 small cap index: The Speculator King: Chart of the Day I also posted a few thoughts on what the current correction means for my intelligent plan for doubling my money: The Speculator King: Market in Correction: Now What? Also, I will be starting the discussion of Darvas's How I Made 2,000,000 in the Stock Market within the next few day, so if you want to follow along and you haven't read Darvas yet, get reading! Best Wishes, Thales

And for a really BIG PICTURE, should Par break, then I would be looking for a bottom down between 67-78 ... Best Wishes, Thales

For a little long term perspective on the EURYEN, you can see that the EJ bounced off nearly ten year old support in January of 2009, and thirteen months later, in May 2010, it broke below that ten year support. After rallying back to test that support level, and finding that yes, indeed, "support is now resistance," the EJ has started heading down, and is currently within 20 pips of its May 2010 low, a break of which, one might reasonably expect, may open the floodgates for a waterfall down to par (100.00). Best Wishes, Thales

So far, so good ... my daughter is short EURJPY at 112.00 and 109.00 and I have shorts out on the EURUSD (via the 6E) at 1.2769 ... (all entries on stop and were posted prior to trigger) ... My initial target on the 6E is 1.1600-1.1800, but I'm starting to think 1.0300 ... Best Wishes, Thales