Blue Chip Bulldog - Latest Comments in Trades for 11/5/09

Re: Trades for 11/5/09

chaunceyherbie — Fri, 06 Nov 2009 14:41:56 -0000

Very nice job, Ed. Creative approach. Thanks for showing me.

Re: Trades for 11/5/09

EdK — Fri, 06 Nov 2009 09:28:58 -0000

Of course ATR is good for all sorts of things. For example for a given stock a short term contraction in ATR may be viewed as a precursor to a possible breakout/correction. For most stocks or indices ATR is always oscillating to some degree. When ATR is applied to PnF charts we get a customized supply and demand picture for individual stocks and indices from which we can quite readily derive support and resistance levels. While these S/R levels are fixed as to price level, due to the nature of PnF charting we are limited in resolution by box size and further with ATR charts the figures associated with each box are constantly shifting due to oscillation in ATR.

By varying ATR periods, we get a selection of slightly varied PnF charts and I look for a best-fit when seeking to idenfity S/R. I might add I think this technique works best with the shorter, intra-day PnF charts as far as improving the accuracy of identifying S/R. I mentioned using longer periods and I do but also have used shorter. In this example I use 13, 20 (default), 34 & 55. Last is the short-term S/R level displayed on SPX candles.

http://stockcharts.com/def/...

Re: Trades for 11/5/09

Rosabarba — Fri, 06 Nov 2009 09:09:30 -0000

I'm always interested, hiker (and I was using a bit of hyperbole there). Currently I have no position in PRU, but the life insurers have seemed particularly vulnerable during the current troubles. Thanks.

Re: Trades for 11/5/09

chaunceyherbie — Fri, 06 Nov 2009 07:43:49 -0000

I have a friend who is a professional trader in the business 30 plus years and he does extremely well trading the small cap $rut index from Nov through Jan. According to him it is a seasonally strong period, for what that's worth to you.
Have a lot of fun this weekend digging divots :-)

Re: Trades for 11/5/09

morrise — Fri, 06 Nov 2009 07:01:07 -0000

That sounds interesting. i have tried to shorten time frames but found it easier for me to see the overall picture by using both the PNF and the EMA's. I am leaving, from Fl., this mrn. and going for a golf weekend to Tucson Az.. When I get back I will try to revisit those Pnf short time frames. I currently do have the 3 min. PNF but have not found a way for it to be useful to me. I do quite well using these two views but working with only PNF charts would be easier and clearer picture for me. tks. for those thoughts.
I started trading, through TradeStation, the RUT futures a few weeks ago and that has taken a little time to get used too. My plan is to continue doing swing, position, trading, as I have been doing, while attending to day trades on the futures. I am gaining confidence in my futures software and if I can find better charts for the other trading I will be in hog heaven. Thanks again for your thoughts...

Re: Trades for 11/5/09

hiker — Fri, 06 Nov 2009 05:35:38 -0000

PRU does have a floor

I have a chart if interested

Re: Trades for 11/5/09

Brinkley — Fri, 06 Nov 2009 02:30:35 -0000

NEW POST

Re: Trades for 11/5/09

chaunceyherbie — Fri, 06 Nov 2009 02:28:03 -0000

Ed, that's creative. How does that help? What are the advantages of the longer periods?

Re: Trades for 11/5/09

Dutch — Fri, 06 Nov 2009 00:25:09 -0000

Molecool from evil speculator called 1066 earlier in the week. It'd be funny if this is the top for the remainder of the year. 666 bottom, 1066 interim top. That'd be poetic.

We''ll see where this ascending triangle breaks tomorrow...

p.s. I'd love to draw up a chart that removes every overnight gap on the S&P and see what it looks like on the year...gap less.

Re: Trades for 11/5/09

TraderTamas — Fri, 06 Nov 2009 00:13:33 -0000

The strategy now is to buy the 10 handle pull backs.

Re: Trades for 11/5/09

Castor — Thu, 05 Nov 2009 23:37:17 -0000

Closed right at resistance. The market is at an important junction. Watch for a potential inverted head and shoulder on the ES/SPY/SPX on the 30-60 min timeframe. How we react to the job's data in the morning will set the trend for the day. The market is expecting -173K
http://bit.ly/W8ent

Re: Trades for 11/5/09

EdK — Thu, 05 Nov 2009 23:14:38 -0000

I like the ATR PnF charts too. Lately I've been varying the ATR calculations over longer periods than the default: 34, 55, etc.

Re: Trades for 11/5/09

chaunceyherbie — Thu, 05 Nov 2009 22:56:19 -0000

Nice work, Morrise. I like using Average True Range for my box size. I use ATR on the daily, 60 min and 30 min PnF. That's a slightly different approach than changing the box size on the daily as you did in your example.

Yesterday, I pointed out the difference using $RUT daily ATR PNF and the intraday ATR PNF to moosters:
"$RUT bounced off major daily support of 560. On the 30 min PnF, it has had a strong 6 box buying reversal, but needs to close above the 579.70 level to go on a buy signal. On the 10 min PnF it is on a buy signal from 569.90. On the daily, the 20 SMA appears just days from crossing the 50 SMA. It looks like seasonal strength into January on small caps may have started, but too early for me to be confident."
So as you can see the different time frames give you different outlooks.

By the way thanks for the info you gave me on Las Vegas over the weekend. I'm looking forward to next week's trip, although I'll be working in the day time.

Thanks for your posts....always learn from them.

Re: Trades for 11/5/09

jayinasia — Thu, 05 Nov 2009 22:17:57 -0000

Good Morning Folks.

Here's just a scribble chart of a dream I had last night. Amazingly I was dreaming that the market was up while it was actually happening. LOL. Anyway, it's just for fun and no waves, counts, etc. Just a vision although it does make a bit of sense considering "year end rallies" etc.

http://stockcharts.com/h-sc...

Re: Trades for 11/5/09

jayinasia — Thu, 05 Nov 2009 22:15:09 -0000

Or maybe equities fell behind currencies and oil a bit?

I don't see oil falling too much given the $BDI.
http://stockcharts.com/h-sc...

Re: Trades for 11/5/09

aviat72 — Thu, 05 Nov 2009 22:00:00 -0000

Interesting day.

We are seeing some decoupling. The currency and oil markets have not yet caught up with equities in this rally. I think many currency traders are waiting for the NFPs to be out of the way. So if things are rosy tomorrow, the biggest moves might be in the currency markets tomorrow.

I was not sure though which way it would break. If the NFPs are really good then it is likely that the Fed will start become less dovish which should be bullish for the USD. However over the past year any good economic news has lead to a weaker dollar as the risk trade comes on. I think the Fed is going to be out of the picture and the risk on trade will dominate.

Ms. B: I am seeing a double headed IHS on the intra-days in OIH. Target seems to be the prior highs at 130.

Re: Trades for 11/5/09

morrise — Thu, 05 Nov 2009 21:01:17 -0000

I had a very nice trade in the RUT futures today and thought I would point out a interesting “Thing” one can do with PNF charts.
By changing the box size you can increase or decrease the sensitivity of your chart to price movement. Witness the RUT with a 4 pt. box and the RUT with a 5 pt. box. Both have their 45 degree support lines but aside from that it’s as if you are looking at two different issues. On one you have a potential double top break out with a possible buy signal, and the other we just have a column of “X”s and a long way to a buy signal. I prefer the less sensitive charts because I tend to marry them to my EMA’s and position trade. Swing traders like the more sensitive charts and, as I am doing now, lower the box size. Soooo be sure to check that out when you are making decisions based on PNF charts. You can do this yourself on stockcharts.com…

Anyway…just a thought to confuse you….hope it helps someone….
http://screencast.com/t/rxA...
http://screencast.com/t/GlY...

Re: Trades for 11/5/09

aviat72 — Thu, 05 Nov 2009 20:46:17 -0000

I agree. Stock finished strong.

I think it will trade the 115-125 range unless we make a new high in equities; likely this will follow the market to new highs than lead it. The Retail news today morning was mix (perhaps causing the sell off at the open).

Re: Trades for 11/5/09

Rosabarba — Thu, 05 Nov 2009 19:35:47 -0000

What a comforting batch of coincident positions. I even considered a RIMM short or puts after the underwhelming response to the share repurchase (Annamall flagged that trade on her blog today and seemed to hit it pretty well) but held off. I also covered 1/2 of OIH calls and might add back if we get "contained weakness," shall we say, tomorrow.

Loved HGSI today. Came about 0.40 from taking out the impulse high after yesterday's big selloff.

Re: Trades for 11/5/09

facesincabs — Thu, 05 Nov 2009 18:24:35 -0000

I mentioned this morning that I was focusing on real estate and retail ... I have rather large positions in RTH (puts) and SRS (shares) ... and then some smaller positions ... I am trading TZA quite frequently (both directions) ...

With the combination of unemployment and an announcement about a new job/employment program by the federal government ... I may be forced to cover tomorrow and maybe even change direction ...

Re: Trades for 11/5/09

Rosabarba — Thu, 05 Nov 2009 17:40:50 -0000

:-)

If GDX makes new all-time highs before the end of the year, perhaps moo can host a toga party.

As for Taz on a leash, I didn't realize anybody saw that. Give me a couple of days to come up with a plausible explanation.

Re: Trades for 11/5/09

ropey — Thu, 05 Nov 2009 17:26:33 -0000

Its tough but im using the usual advance declines >1000 or <-1000 as one of the gauges on whether to hang tight or not..

Re: Trades for 11/5/09

ropey — Thu, 05 Nov 2009 17:24:26 -0000

hope so, held on all day from start to finish and closed out my intraday for a nice gain - managing trend days pretty well finally - still having big issues with chop days and need to learn to stand aside more...
Wasn't sure where they will take it tomorrow but given the bullish close i am guessing the 20ma is going to be at least tested tomorrow ~107.20 or so on the SPY....
Question is, are theyf orming the head or is this ready for take out of the 110? will have to see..whatever, i'm sure it'll become apparent in a week or so...
Noticing interesting OI on the SPYs again and using that for judging my ranges..

Final thought, gap opened below, they filled them pretty violently, the >perfect< setup tomorrow owuld be a quick selloff down to that 1047 level and then up next week..one can only hope, if not, just going to hop onboard again and ride the wave.

Re: Trades for 11/5/09

Brinkley — Thu, 05 Nov 2009 16:53:14 -0000

It has been a long time since I donned either a toga or a laurel leaf crown, but you can call me Jules. ; )

I have never known you to come to any table without making most generous contributions to the banquet, and we are all the richer for it. (If I recall, the last time, in addition to your fork you also showed up with a bib, a doggie bag, and Taz on a leash.)

All kidding aside, thank you, RB.

Re: Trades for 11/5/09

Leisa — Thu, 05 Nov 2009 16:45:05 -0000

I think that you've been a magnificent example of how to stay on the right side of the tape. I've been mostly trading like Switzerland: neutrally! But I've no complaints. I always peek in here, but don't post so often. I really admire the work that you and the other traders do here!