A few charts for the week...

Posted by Tom C.

Since it is a short week, I am tending to a lot of personal business. It is likely this will be my only post until next week.

Here are two charts - one from Tuesday and one from today.

GG was a "reversion to the mean" trade. It gapped down and printed four strong bars, with the 4th bar being the NRM and a hammer-type candle. I entered on a break of that bar's high and closed the position at the 50% level (Fibonacci lines plotted in classic X-style - the previous day's high to the OR low).




PFG was an interesting trade. It gapped up and after a pullback it rallied to close above the OR high. I entered on a break of the 10th bar high; it was a little extended from the 8EMA (white line), but I liked that it closed strong above the OR high and left a long lower tail. I closed the position at the FE (again, Fibonacci lines plotted in classic X-style).



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Happy Memorial Day

Posted by Tom C.

I thought I would post a few charts ahead of the long holiday weekend. Analysis is brief, but you guys know the routine!

IRE gapped up (yesterday) and traded in a narrow-range for the first 2.5 hours of the morning. The 12th bar rallied off of the 8EMA and closed above the OR high. My Fibonacci lines were plotted in classic X style (previous day's low to the OR high). I entered on a break of the 12th bar high and closed the position at the FE.




MCD gapped up (yesterday) and rallied from the open. If closed above the OR high and traded in a consolidated range for an hour or so. I entered on a break of the 11th bar high (note the yellow arrow points mistakenly to the 3rd bar...I don't have time to correct it right now), which had support from the OR high and a rising 8EMA. I closed the position at the FE.




GME gapped down (today) and formed the opposite of Trader-X's "push-through" setup. I entered on a break of the 3rd bar low, and closed the position at the 1/2-way point between the low and the FE (Fibonacci lines plotted from the previous day's high to the OR low).




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SLT - 051809

Posted by Tom C.

SLT was a great setup. Here is what I saw/did:

1.) A gap up, orderly pullback, and move back into the upper half of the morning's range with bars 7-10.
2.) Bar 10 touched the 8MA and closed bullish.
3.) My Fibonacci lines were plotted in classic X-style - from the previous day's low to the OR high.
4.) I entered on a break of the 10th bar high, and sold at the FE a few minutes later.

SLT had good volume (almost 6 million shares for the day) and it was easy to get into and out of; they don't all happen this fast or offer this big of a return, so it was a great way to start the week.



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FCX - 051309

Posted by Tom C.

I received a lot of positive feedback on the "reversion to the mean" trades I posted.

FCX was a good example of that setup today. It had a lot going for it - the first four bars put in a nice bottom, the 4th bar was a hammer, and the 4th bar also closed above the 50% level of the morning's range (not shown on the chart).

I entered on a break of the 4th bar's high, and my target was the 13EMA which seemed to be a nice compromise between the 8EMA and the white dotted line which represented the 1/2-way point between the low and the 50% retracement (note - my Fibonacci lines were plotted in classic X style...the previous day's high to the OR low).

I closed the position at my target. Note how price actually tagged the 1/2-way point between the low and the 50% retracement which turned out to be the high of the day.



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Mark Cuban on Success and Motivation

I am not a fan of Mark Cuban a lot of the time, but I respect his business acumen and success.

Over on his blog he made multiple posts on "Success and Motivation", and they are well worth reading. Not just for the Michael Dell and Bill Gates stories - but for a look at how he built his business with and from nothing, and for valuable insights that can be applied to whatever you undertake in life.

As he says, "you only have to be right once."

Grab a beer, sit down and relax, and give it a read.

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POT - 051209

Posted by Tom C.

POT was a good setup - it gapped up and made a nice run. I plotted my Fibonacci lines in the classic X-style - the opening range (OR) high (the high of the first 30-minutes) to the previous day's low. The 9th bar closed above the OR high, and had solid support from the rising 8EMA.

I entered on a break of the 9th bar's high, and closed the position at the Fibonacci Extension (FE).



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Live long and prosper

Did anyone see the new Star Trek?

Reviews? Good or bad?

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PRU - 050709

Posted by Tom C.

PRU was an interesting setup. It was a little higher-risk as I would have rather seen it bounce off the 50% retracement rather than close below and then - on the next bar - close back above it.

Nonetheless, I liked the bounce off the 8EMA, and the gap and move up during the opening 30-minutes.

I entered on a break of the 7th bar high (lower yellow arrow), and sold when price stalled at the halfway point to the FE (upper yellow arrow).



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Tuesday charts

VRX presented a "perfect pullback" setup Tuesday. It gapped up and pulled back to the 50% retracement of the morning's range. It found support at that level as bars 6, 7, 8, 9, and 10 all failed to close below it.

The tenth bar was a "hammer-type" candle, and for those of you who enjoyed Tom C.'s charts with his MAs, I included the 8EMA (note how it pushes price up). I entered on a break of the tenth bar high and sold at the FE. It was a nice 5% move!



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Back on the chain gang

I am back from travels, and it is hard to motivate myself to blog. There are so many things I need to do, want to do, and should do. Blogging just falls low on that list right now. But things come and go in cycles, and I am sure that one day soon it will be back at the top of the list!

Many thanks to Tom C. for some excellent charts. I have asked him to continue trying to make a post or two a week as his schedule permits...maybe between the two of us we can add something valuable every week or so!

A nice trade from yesterday was RIG - nothing fancy...I entered on a break of the third bar high, and closed the position at the R2 pivot line (yellow).



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COT - 050109

Posted by Tom C.

I had to make at least one more post before Trader-X returned from vacation. It was a strange week for me - I had Internet connection problems two days out of five (I hate Time Warner Cable), and a complete power outage one morning. I actually traded from a Starbucks one morning, and it was my best day. Go figure.

Yesterday COT presented an opportunity that we wait for as traders (or at least I do). I spend most of my time getting base hits, but this was a home run.

Price gapped up and consolidated in the upper half of the morning's range (as indicated by the first three bars). For the first three hours, it moved sideways and made what I always think of as a "slim jim" (you older traders will recognize this as a term from Kevin Haggerty in the old Trading Markets days (circa late 90s early 2000s!)).

It made a perfect breakout at 12:30, rallying off of the 8MA and closing above the OR high (as indicated by the black horizontal line). And the candle was solid green - open at the low and close at the high. I entered on a break of that candle's high (as indicated by the yellow arrow). Price exploded after three bars of consolidating that move.

When a situation like this occurs (ie, a parabolic move), I keep my exit strategy simple. I look for price to close below the low of the previous candle. I exited as indicated by the white candle. It was a high volume mover and a 25%+ gain from my entry.



Have a great weekend!

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