notouch

"The trend is your friend except at the end when it bends." Ed Seykota

On the hourly charts we've seen all sorts of bearish candlesticks on the way up but none of them have been the top. I think we'll see a very bearish candlestick or pattern on the daily charts before any pullback begins. I wouldn't read too much into the hourlies.

No one on this board knows how high it will go. You shouldn't even trade what YOU think let alone what other people think. You should trade what you see. Look at the weekly charts. Before the 500 point correction you mentioned there was a 2000 point rally that lasted over a year before any really big correction so if you're waiting for a top you might be waiting a while.

That's definitely something I need to look into. The more you can read the behaviour of the underlying stocks the better because that's what drives the market. NYSE total volume is also interesting.

As an alternative to looking at sectors you can look at the individual DJIA stocks which include Citibank for banking and Intel for semiconductors. Banking seems to be a laggard in the current rally.

I didn't mean directly from brokerage accounts. That's taking it too seriously. I just meant time stamping and not having the privilege to edit or delete your own trade posts. That way if you post your trades immediately after making them your trade posts will have more credibility.

I like the idea of live trade calls to separate the men from the boys so you can publish your trades as you make them with no chance to edit or delete. They'd need to be time stamped to avoid any hindsight trades slipping in. That way you can't under-report or whitewash your bad trades and invent good trades that you never actually took.

Not many long term stock traders outperform the market. Why not just invest in Spyders or Diamonds ETF? As you trade the futures of these markets full time anyway you should be able to find a good long term entry point.

What stops would you use in your quest for 10 points a day? If a 10 point stop then what happens when you lose 3 and are -30 for the day? You now need +40 to pull it back. 2 more losses and you've wiped out a week's profits.

:p I don't wear knickers cooter, do you? I'm aware that bad approximations of fx volume are available but that doesn't answer any of my questions which I'll leave to PivotProfiler who I'm sure can answer for himself.

It's true that you need a relatively significant retracement because you need to draw the pitchfork from a swing low to a swing high and then to the next swing low, which should be a retracement. Interestingly we closed above the pitchfork. If we pull away from it then the upper line should act as a lower support line.

PivotProfiler, by your post it's obvious you failed to understand my post and also fail to understand the market you trade. When I said "10 pips is nothing" I wasn't talking about the value of 10 pips on your trading account. I meant it was nothing in relation to EUR/USD's average daily range. I assumed it was a futures chart because "Euro FX" is the name usually given to the CME's futures contract. OK, you say it's the spot contract so now explain what the volume in your chart actually represents. It moves between 1.000 and 30.000. Volume is not available in the spot market so where are you getting those numbers from? The thing that is really ridiculous is your belief that "Professional Money" is behind every little 10 pip move in EUR/USD. Who exactly are these mysterious "Professional Money" people manipulating every little move in this market? In spot forex the majority of volume could better be described as "Real Money" i.e. commercial interests that actually need to exchange money for business reasons. Only a tiny percentage is speculative. At that time of day there is no speculative "Professional Money" involved in EUR/USD. The volume is mostly created by banks calmly filling orders by Japanese exporters. The EUR/USD move would have been created by investment banks arbing the EUR/JPY, USD/JPY cross rates.

I agree with you there walterw. I'm going to do some more research into candlesticks because unlike intraday trading where candlestick patterns are never perfect, on the daily charts candlestick patterns often are perfect. The last big correction was preceeded by the classic three mountain top pattern and the three black crows candlesticks. If this rally ends in a shooting star it will probably be a gap up to new highs then a massive rally to new highs then a decline back to the open.

Here's what the Candlestick Man himself (Nison) says about shooting stars: So it was a shooting star (but I agree not an ideal one, especially as it wasn't above the previous candlesticks) and we had a little bit of weakness in the morning but it just turned into another buy the dips scenario. The strong close puts the bulls back in charge.

I think it takes a while for fundamental data to be priced in. The effect of surprise economic data can last for hours or days after it's released so I'm sure the same is true of a surprise crop report or a bad hurricane.

I know John Carter's set ups and don't care much for them but thanks anyway. Even when I'm not trading directly off of fundamentals I like to at least understand them. I couldn't imagine trading stock index futures, currencies or bonds without understanding the significance of employment or inflation data for example. It seems to me to be trading with one eye closed.

No because CME Euro futures are not widely traded in any of those places. If you look at the chart you'll see volume never goes above 30! Hardly "Professional Money"... :p

I definitely need to learn more about the fundamental aspects of ag trading. Can anyone recommend a book that looks at things like seasonal trends, weather, major players and the impact of the various reports?

Do you really think Professional Money is active in the Euro futures market when it's 2200 New York time and 0300 in the morning London time? A 10 pip move is nothing. It looks more like the natural ebbs and flows of a sleeping market.

Thanks MidKnight and Tingull, that confirms what others have said. I think I'll wait for the paperback.

It's not necessary to look for a "strict" shooting star. That's just nit-picking. In any case, the one that really matters is the cash SP500 which is a strict shooting star. The 0930-1615 ES chart also finished down on the day. What really matters is what price action is telling us, i.e. a lot of new longs entered the market and drove the price up but strong selling drove the price down again.

Tingull, what does Markets in Profile have that Mind Over Markets doesn't? I've heard it's not really required reading if you've already read MOM. I don't really go for the psychobabble side of trading books so does MIP provide any real facts that MOM doesn't?

High volume on a shooting star suggests trend reversal, not continuation. It shows there was a transfer of stocks from strong holders to weak holders. Anyone who follows VSA can see the bearish implications of that. Like I said though, I wouldn't short this market. It might just be a little pullback before another leg up.

Yes, and a bullish daily candlestick on high volume.

I wouldn't short this market right now. Waiting for strength to come in after a pullback to re-establish longs is the way to go.