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Friday, January 09, 2009

A message from Tom C.

Tom C. was a frequent contributor to this blog in the past, and he had a few thoughts to share with everyone:

My posts dealing with longer-term trades were popular in the past, and I wanted to tell Trader-X readers who are interested in those type of trades that the market action from 2008 lends itself to the possibility of some great setups in 2009.

With many stocks closing near the low, I will be watching for them to rally off those levels. I plot my Fibonacci lines over the previous year's high to low*, and look for price to break through the retracement zone. The idea setup is price breaks through that level and pulls back to test it as support before rallying to the previous year's high (and hopefully the Fibonacci extension).

Of course, this is the bullish scenario - which I am hoping is the case for the health of the overall market. In the event that the bear market continues, there will still be setups - just look for price to fail at the retracement zone and turn back down to the previous year's low (and hopefully the Fibonacci extension).

You can read more about my longer-term trades here, and do a search on Tom C. for other posts.

Good luck in 2009!

*To give credit where it is due, I learned this method from Kernan at TRADEthemove.com


what is trader-x doing in January?

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5 comments:

Dinosaur Trader said...

Yeah, half of me wants a bullish 2009, but half of me wants some more volatility first.

If the volatility doesn't pan out traders like myself are going to be forced (I think) to pay attention to the longer timeframes to supplement our (most like dwindling) daytrading income.

In other words, given a decrease in the VIX, and assuming volume is dead forever, I look forward to checking in on a longer term trade emphasis.

At least it should be less stressful.

-DT

Anonymous said...

Tom C - great to have you back. Are you going to revive your blog or start contributing here more?

RJ

Tom C. said...

Dinosaur Trader, I enjoy your blog!

RJ, no plans for my blog. The timing was terrible when I started in 2008 as I had a MAJOR health crisis in my immediate family. Outside of earning a living, it took up all of my spare time for most of the year.

I may contribute more here as the year goes on. If X lets me, that is.

QQQBall said...

ive been thinking about what X said about a stock that stocks that run forever have to double many times, so he scanned for stocks that had doubled in the past few weeks or months. lots of stocks like say DXO have doubled and others like DRYS are like a 4-bagger. lots of $!, $2, etc stock prices.... look at teh monthly charts, some are a 1/10th or less of their values at the high.

Narayan said...

Tom C! I miss your posts and hope you post here more often. Take care in 2009.