thalestrader

Hi Leandro, Take a look at the chart Cory posted in the post below yours. That is close to what I would be watching, with this caveat - I would like to see price impulse, i.e. make a relatively large move quickly (relative to what its been doing over the last hours) before I decide to do anything. I mentioned the Fed meeting last night. The New York traders seem already to have been flash frozen at their desks. Also, this is typically a low volume trading period between now and the end of the year (for example, I will not trade stocks again until after the New Year). What trades we are taking is limited to currency and index futures, and of course our little forex account. We are trading small, and we are in no hurry to make a trade. By the end of this week, I will likely be done until 2010. So far we've taken no trades this morning. Right now, the GBPUSD looks as though it might have more life in it than the other pairs I watch (EURUSD/6E, USDJPY/inverse6J, EURJPY). That, of course, may and can change in a heart beat. Best Wishes, Thales

All of a sudden "Brownie the Blunt" becomes the master of understatement. Great job, Brownie! Best Wishes, Thales

Hi Don, Sorry, I didn't see your post as I am 90% focused on the Eagles game right now. Sure, that looks good to buy the EU. I see Gabe also posted about a leak. I don't know what leaked, but at any rate, that would have been a good buy point for me but I wouldn't let it retrace too much below my buy point before I'd give up on it, but that's me. As far as the EJ, it isn't really scaling in, as that implies a partial position at various levels to accumulate a full position. The way I look at it is like this: If I am short and I have a profit target at price level X, and I see nothing to make me think a bounce is anything more than a brief respite before the decline continues, then why not add to the position if I have a break even stop on the exiting position, and if a reasonable stop level on the new position is within our predefined risk levels, then why not add? If you have confidence in your entry and your targets, then show it, right? At any rate, I had three shorts, and all three were stopped out at the break even level of the last entry. Best Wishes, Thales

That kind of looks big and bullish ... Best Wishes, Thales

Current look of the EURUSD. If that last low holds then something big and bullish may be in the works. Best Wishes, Thales

Sorry for the late post, but I'm watching the Eagles trying as hard as they can to snatch defeat from the jaws of victory against the Giants. EJ has been a nice successive short. Just keep selling more and more until PT is hit. Best Wishes, Thales

Rip cord pulled, and awaiting further instructions - need a break of last week's low to go short or a new high to re-enter long. Best Wishes, Thales

Current EURUSD Best Wishes, Thales

The last four weeks or so the weekly Tokyo open as been an opportunity to seel the USD and the Yen and buy just about anything else - gold, oil, stocks, etc and so on. If that practice continues, then the EJ and the EU have some clear buy points. If not, and instead we see USD and YEN buying and traders start selling everything else, then a break and hold of last weeks lows should be clear "starter's gun for some downside targets. The EU, should it break last week's 1.458x low and hold below it, should have a go at 1.4440 and down to 1.4325 (with some possible fib support at 1.4387) before any real buying might materialize. By the way, if either of these trigger, I would not let the trade run clear to the other side of the current trading ranges befoe pulling the plug. At any rate, this may be an interesting few days (perhaps the last interesting days) before 2010. Don't forget there is a two day FOMC meeting. Often times this means if you want to trade any kind of short term moves, you had better do it in Tokyo, Frankfurt, or London, because the NY traders seem to freeze and pucker shut at the very thought of the FED crew sitting and sipping cappuccinos. Best Wishes, Thales

In my book, if its less than $10, its a penny stock. I just figured I do a scroll through penny land to find something to share here in your thread. Market cap has nothing to do with it, either. For example, Citigroup has so many shares outstanding, I think they were still a large cap at 98 cents/share. A large cap penny stock, that is. Here is a source I have used week after week for many years now to find candiates for my watch list. Best Wishes, Thales IBD 100 as of 12-11-2009.xls

Hi Dinero, I'll join your penny stock parade. I'm not initiating any new longs right now given the current market action, but, if the markets intentions were clearly to continue up, this is what I would be looking for: SRLS has established a nice, orderly uptrend over several months, and it is now puling back after getting to within 34 pennies of its all time high according to the data I have on Telecharts. I like this little pullback to 3.50, so I would be looking to buy if Friday's high is bttered by at least a dime, and my stop loss would be a penny below Friday's low. I'd be watchful at the 4.50 level (all time high $4.54), but my intention would be to hold this for a few bags if it pushed tonew all time highs. Best Wishes, Thales

Memories. I learned this from a guy named JR Stevenson who used to pop in and out of various trading rooms way back in the early days of the internet. Last time I heard from him was back in 2006 when he sent me an email telling me that he was preparing to move from South Carolina to Memphis. I haven't heard from him since. All this to say that he is a real person who really trades. His book is available from Trader's Press. I own it myself, and it has a few tricks in it that are worth knowing, including something he calls a "cyclic trend line." Good stuff, Marko. I do not utilize this simple channel technique nearly as often as I probably ought to do. I have always wondered whether the method associated with JH didn't at some point have some interaction with JR (who was an old-timer from way back) given the similarity between JR's method and JH's "tapes, lateral, traverses" as well as certain uses of trendlines one finds in the various JH threads. Best Wishes, Thales

"Darvas trained for the market just as methodically as he had studied his dancing, read some 200 books on the market and the great speculators, spent eight hours a day until saturated. Two of the books he rereads almost every week: Humphrey Neill's Tape Reading and Market Tactics and G. M. Loeb's The Battle for Investment Survival." One could certainly do worse ... Loeb is among my favorites as well. Best Wishes, Thales

Hi jands, I see you. Best Wishes, Thales

Hi Cory, Your charts look excellent. Also, I always felt that O'Neil does not give credit enough to Darvas. Isn't O'Neil's CANSLIM nothing more than a formalized version of Darvas's Technofundamentalist approach? Good work, Cory. I think it is an excellent course of action, and it can only help your trading, even if you eventually change course. And it didn't cost you anything other than the price of the books and your own time and effort. I hope it pays you great dividends over the coming weeks, months, and years. Best Wishes, Thales

Hi Folks, Here is a series of charts from another Nat Gas trade, also from 2007. Again, whether you call it a 123 or an ABC, the concept is the same - a low, a high, a higher low, a buy. Best Wishes, Thales

Weekend Reading Hi Folks, While I find it somewhat amusing and a little unseemly that Joe Ross felt compelled to attach his name to a common and naturally recurring price action phenomena, I have to give credit where credit is due. I found another old chart of another trade of mine where I explicitly mention the Joe Ross by name. As I said, I am a terribly unoriginal trader. At any rate, I have his "Trading the Ross Hook," as a .pdf file, and having found the reference to him on my old chart, I figured I'd pop his book open and take a peek for old times sake. I think it is worth a read, so I submit it as this week's edition of Weekend Reading. It is a large file and TL would not allow me to upload it due to its size. I've made it available off of a link to adobe (I hope it works): https://acrobat.com/#d=3qaSCczKmqk6DSrelWkeFg I have also included a shot of the chart in question. I am one of a small but hearty group of friends who also happen to trade, and the five of us have been sharing our charts for years. This was a mini nat gas trade from two and a half years ago. As you can see, I was still hooked on the CCI. I also speak of a "bullish candle," which I find only slightly less embarassing than the CCI. But, as you can see, otherwise the basic elements of what I present here in this thread were there at that time. Best Wishes, Thales

Hi Folks, It will take a close below 1.6239 to keep me short the Pound into the weekend. Best Wishes, Thales

For what its worth, if it were not for my daughter, I'd not touch a bucket shop account. I still trade the 6E, 6B, and 6J. I do think that for someone with limited capital who is learning to trade, a micro account can be a good way to "cut one's teath." I think these little fx accounts can be fun. They certainly make it easy for me to demonstrate my approach to trading, as the currencies trade with fairly good liquidity during 21 hours of a 24 hour day. But, it you are trading futures, I can't see moving to retail fx unless it is to trade one of the pairs that does not have a well sponsored futre, e.g. the EURJPY & GBPJPY. I admit that I have found the EJ a terrific market to trade. Best Wishes, Thales

Are you trading the currency futures? The 6E and 6B offer plenty of opportunities. If you are trading those already, have you looked at Oil or NatGas? As far as forex, it is a strange way to trade, trading with a bucket shop. I do recommend a micro account with FXCM because of the very tight spreads relative towhat you will find elsewhere (or even at FXCM on their standard accounts. With a micro account, you can trade as small as $1000 lots, which are a dime/pip, and up to $5,000,000, which would be worth $500/pip. For example, a forex equivalent to the 6E would be $125,000 trade size, which would move at $12.50/pip. Sign up for a demo account. It takes some getting used to placing your stops, etc. The first time I saw that my daughter got stopped out when price never got closer than 1.5 pips to her stop price was an eye opener (first a head scratcher, then an eye opener). You can beat the buckets, but you have to understand their game first. Best Wishes, Thales

Gabe, I think you said it as well as I could have. I agree with you completely on this example. Does anyone recall this recent post from Marko? Best Wishes, Thales

I think some folks just wander in on their way to ET. Best Wishes, Thales

Gabe, your short would have hit PT1, and the double bottom should have gotten you out with a decent profit on the second half, and some folks may have gone long when the reaction high betwen the two lows was taken out to the upside, even though the second low undercut the first. William O'Neil actually prefers a double bottom where the second lwo undercuts the first but is quickly reversed. Trader Vic calls this a "2B", and his entry would be when price came back above the prior low. Best Wishes, Thales

Here's your short, Gabe. Best Wishes, Thales

Sometimes, this is so easy, that the mind, thinking it must be more difficult than it is, refuses to see the answer right before the eyes. But Brownie, would it kill you to post one chart, once in a while? I promise you that it will not dull your edge. And besides - Good comes to those who first do good themselves. Who knows, a little kindness on your part, and perhaps the Browns win another football game before the end of the season. Either way, best to you Brownie. Good stuff you've been posting lately. I'm a Brownsfan Fan. Best Wishes, Thales