Wednesday, August 17
Chat Transcript: Strong Australian Stocks
Thanks to the handful of people who participated in last night's chat -- featuring Australian stocks was a total flop. ;-) We also discussed a couple of Dummy trades, which I know has wide appeal, the OSTK drama, and Jessica Simpson's Rise (and inevitable Fall). Here's the complete transcript:
Posted on August 17, 2005 at 8:00, GMT
| CMaoxian | hi JohnD |
| JohnD | Hi there |
| CMaoxian | Are you the lonely Australian? |
| JohnD | Not Australian, but a little lonely |
| nickm | good evening... |
| JohnD | Hello |
| CMaoxian | hey nick |
| nickm | q on dummy trades while we wait |
| CMaoxian | sure nick |
| nickm | why inside bar? |
| nickm | or how important it is to have one |
| nickm | in the setup |
| CMaoxian | inside bars tend to be narrow range and show hesitation which is what we want to see resolved |
| CMaoxian | hey max |
| maximus | hi everyone |
| nickm | hi max |
| CMaoxian | it's just a trigger, nick |
| nickm | so any small range bar would do |
| CMaoxian | it depends on how small a timeframe you're executing... if you're trading off the hourly chart that's different from a 5 min chart |
| CMaoxian | i like to see an inside bar, not just any narrow range bar, especially on larger time frames |
| nickm | another question.. for daytrading, which trend are u paying attention to? in hourly or daily ( sometimes are oposite)? |
| nickm | i use 15 min and 30 min |
| nickm | for setup... entry is on 5 min or even lower |
| CMaoxian | that's too small a timeframe for me unless i'm trading futures |
| nickm | ok got it... tx |
| CMaoxian | let's look at some strong Australian stocks |
| CMaoxian | first up is Woodside Petroleum Limited |
| CMaoxian |  |
| maximus | chairman what program do you use to make the the charts? |
| CMaoxian | metastock |
| maximus | is it subscribe service |
| maximus | ? |
| CMaoxian | no, max |
| CMaoxian | you can see how the trend has accelerated of late |
| maximus | yup |
| CMaoxian | blow-offs are dangerous because the reversal at the end can be a nasty one |
| CMaoxian | next up is another Energy stock: Santos Limited |
| CMaoxian |  |
| CMaoxian | i posted this chart on the site earlier this week |
| CMaoxian | looks to me like STO is finding some sellers, may move sideways for a bit |
| CMaoxian | hi chud |
| chud | hey chairman |
| CMaoxian | this next stock is the last Energy stock I'll feature: Origin Energy Limited |
| CMaoxian |  |
| CMaoxian | here again you can see the "resistance" above |
| CMaoxian | it helps to know some candlestick terminology because you can name those dark bars in weeks past "dark clouds" |
| CMaoxian | much more poetic |
| CMaoxian | who knows, it could be a temporary pause before it busts-a-move higher |
| CMaoxian | moving on to the materials sector |
| CMaoxian | Rinker Group Limited |
| CMaoxian |  |
| CMaoxian | here again you can see some acceleration of late, but not as bad as Woodside's |
| chud | any of these have ADR's? |
| CMaoxian | Rinker does a ton of business in the US, not just Australia |
| CMaoxian | they make concrete, concrete pipes, ya know, sexy stuff |
| CMaoxian | i don't know chud, i look at them in Australia |
| CMaoxian | next up is BHP Billiton Limited |
| CMaoxian |  |
| CMaoxian | BHP is listed in New York, chud |
| CMaoxian | as is Rinker |
| CMaoxian | you can see that BHP has moved to new highs drawing a pretty bar last week |
| CMaoxian | these are all weekly charts through the end of last week |
| CMaoxian | last strong Australian stock featured tonight: |
| CMaoxian | Macquarie Bank Limited |
| CMaoxian |  |
| CMaoxian | these guys have been in the news of late because they may bid for the London Stock Exchange |
| CMaoxian | those are all of the stong, big-cap Aussie stocks I have to feature |
| CMaoxian | did you guys have any day trades that you wanted to share? |
| nickm | so how do u trade Aussie stocks? |
| nickm | from US that is |
| CMaoxian | Do you have a Universal Account nick? |
| nickm | with IB? yes |
| CMaoxian | IB i think has permission only for the Sydney Futures Exchange |
| nickm | will check it..... |
| CMaoxian | but not the stock exchange... i meant a universal account with someone (like Goldman) who can deal anywhere |
| chud | is aussie market pure electronic? |
| chud | or specialists look at your stops? |
| CMaoxian | i think it's electronic but i'd have to check |
| CMaoxian | it's pretty hard to find an archaic thing like the specialist system anywhere else in the world |
| chud | archaeologists are searching tho |
| chud | is there an australian ETF? |
| CMaoxian | hi jfra |
| jfra | hola |
| CMaoxian | yes, iShares has an Australian ETF, ticker symbol EWA |
| nickm | CM - i would like to talk about daytrade trade i missed - yesterday - see what you guys think |
| CMaoxian | sure nick |
| nickm | CME |
| nickm | i am looking at 15 min chart |
| CMaoxian | hi JC |
| JC | Hello |
| JC | Packed house! |
| nickm | it gapped up.... pulled back nicelly started consolidation |
| CMaoxian | Australia is not as popular as i had hoped, JC ;-) |
| CMaoxian | hi foo |
| nickm | in mid morning... nice setup... the reason i missed it... is that i thought setup is for the LONG... |
| jfra | I'm kind of fond of Olivia Newton John |
| foofighter | hi CM |
| JC | Yeah, tough to beat the Holy Grail. |
| chud | just wait til the next crocodile dundee sequel comes out. |
| chud | nickm: why would you have been watching CME? |
| nickm | hi volume, good range |
| CMaoxian | why long? |
| nickm | gapped up 6 points |
| jfra | nick, is it thin? |
| chud | that day started out pretty "usual" though |
| chud | it wouldnt have made unusual suspects list |
| CMaoxian | it's listed on the NYSE which means someone's nephew is holding the order book |
| nickm | why long is a key Q... because of the gap UP and pullback... |
| jfra | CM, lot's of guys here in NYC houses trade only 3 letter stocks.. |
| CMaoxian | i like the way someone's nephew walked it back up after picking off Monday's low |
| chud | that gap up is less than 1% tho. not an impulsive move. |
| CMaoxian | yes, i know jfra, but it's not my cup of tea |
| jfra | me neither |
| jfra | but, I'm wondering..... |
| CMaoxian | i'm not showing any gap up, nick |
| chud | that's because it's their nephews with the book |
| jfra | lol |
| nickm | yesterday... not today |
| CMaoxian | did it open at 274.20? |
| CMaoxian | oh yesterday! |
| chud | 2 days ago your time |
| CMaoxian | yes, thanks chud |
| CMaoxian | where's the Dummy bar, nick? |
| nickm | hang on using laptop.. hard to read time on the chart |
| CMaoxian | the first Dummy bar is at 12:45 and you should've quit looking long before then |
| chud | 4th bar is inside bar. but price never moved above it's high |
| nickm | about noon est.. several bars would qualify |
| CMaoxian | 12:45 is first qualifying bar |
| CMaoxian | even if you did enter there, you woulda lost less than a buck |
| CMaoxian | maybe i should post a chart |
| CMaoxian |  |
| nickm | the reason i wanted to talk about it.. is to find out what trend do u guys look at ? ... and would you be only expecting LONG or be open to short in this case? |
| nickm | i have missed several nice trades by excluding one side or the other |
| chud | if i was looking at it, i wouldn't have gone long by the time a dummy entry showed up. up trend was dead. |
| JC | Today's ADVDEC readings should have had you shopping on the short side. |
| CMaoxian | nick, my first thought would be long |
| nickm | ok |
| CMaoxian | but there was no spot to enter in the morning so it would have passed by |
| CMaoxian | even if i had pursued it into lunch and got long above 12:45 bar, the loss would have been around a buck |
| CMaoxian | but as chud notes, by 12:45 i prolly woulda had a clue given the general tone that long was not the place to be |
| CMaoxian | plus it's not a suspect and it's listed on the NYSE which is another no-no |
| nickm | ok ... I look at dummy trade setup as breakout setup... ... which is open to both sides... |
| chud | chairman, what kind of words of wisdom can you offer on selecting dummy stocks. i know unusual suspects are preferred, but can you expound a bit? |
| chud | for example, what's the sweetspot for the morning gap? 10%? higher? |
| CMaoxian | the smaller the gap the better |
| chud | but explosive volume? or just more than avg? |
| CMaoxian | i like to look at the pace of trading, chud |
| CMaoxian | i need to see hundreds of trades a minute to get interested |
| jfra | CM, I find these days that the "move" is usually done by 10:45..nothing but noise afterwards...no volatility |
| jfra | even gappers and high volume ones |
| chud | do you prefer gappers to stocks that the scanner picks up later in the morning? |
| jfra | high relative volume, that is |
| CMaoxian | maybe so, jfra, i'm not in there day to day at the moment so i can't say, but there's always something happening somewhere |
| chud | yes jfra, it seems that way to me |
| CMaoxian | the later the better chud |
| jfra | TOMO, is a good example of why a gap open is secondary to a good setup for a long play |
| jfra | had to be quick though..would prob have missed it myself |
| CMaoxian | lemme look at TOMO |
| jfra | fugly, CM |
| chud | TOMO looks like a thin puppy |
| jfra | yup |
| nickm | CM can u describe your prep for the morning of trading? |
| CMaoxian | yeah Tom Online looks thin |
| chud | couple of dummy shakeouts in TOMO too |
| chud | i get my wrists taped up |
| CMaoxian | you mean Monday in TOMO i assume |
| CMaoxian | it's thin, there's nothing unusual about the trading, the scanner wouldn't find it in a million years |
| CMaoxian | it looks exactly like the kind of stock i would never attempt to trade |
| chud | ha |
| nickm | I don't wanna take too much time, but would't you consider good entry in CME earlier, after first NR7 bar? |
| CMaoxian | sure, if it had traded above there nick, which it didn't |
| CMaoxian | if it had traded above that sixth bar nick, and been listed on Nasdaq, and was showing unusual pace early on, then i may very well have entered there |
| jfra | CM, do you feel that too much volume in a stock is counter to a tradeable move for the day? |
| CMaoxian | not necessarily, jfra |
| nickm | ok .. thks |
| chud | chairman, you been following the OSTK drama? |
| CMaoxian | yes, chud, i read both herbie and jeff matthews |
| chud | you're on their side then? |
| chud | everybody seems to think Byrne's a kook. i'm kinda hoping he's proven right. |
| CMaoxian | i like byrne's writing too, and i'm on no one's "side" |
| jfra | well, the numbers don't add up |
| chud | would make for a nice short squeeze too |
| jfra | Canada is turning into the N Korea of questionable short selling games |
| CMaoxian | i agree with matthews that CEOs who get obsessed with "the shorts" usually don't have their priorities straight |
| chud | greenie & mathews were mentioned by Byrne in his conference call.. so they're not gonna be too unbiased. that's all i meant by the "side" statement |
| chud | yea i agree |
| chud | unless it's jessica simpson's shorts |
| nickm | sry guys.. but my turn on babysitting our little one... catch you later and thanks for the answers |
| CMaoxian | see ya nick |
| CMaoxian | i don't get the appeal of jessica simpson, but then again i've never seen her "live" |
| jfra | not that big a deal... |
| chud | i dont get the appeal of her music |
| CMaoxian | wasn't aware they were marketing her there too |
| jfra | T&A tunes |
| chud | but she looks good on the dukes of hazzard ads |
| CMaoxian | they'll beat all the dollars out of her that they can in multiple formats and then move on, lol |
| CMaoxian | you'll know she's near the end when they launch her "fragrance" |
| chud | yea. i'm sure it's already out. |
| jfra | it's actually not bad...;-) |
| CMaoxian | some fat guy is lying next to his pool in SoCal laughing about it right now |
| chud | easy on the fat guys in socal |
| CMaoxian | i thought you were in Nebraska? |
| chud | so cal |
| chud | tennessee sometimes |
| CMaoxian | interesting commute |
| chud | keeping the heat on their toes |
| CMaoxian | all right i guess we should wrap up this failed chat |
| JC | Even though long was not the general dir, VPHM had a nice dummy long entry today... and the volume |
| CMaoxian | remind me never to feature any stocks from the southern hemisphere |
| chud | do you think the low chat turnout will cause a buy signal in the sentiment indicator this week? |
| CMaoxian | no chud, there's no correlation whatsoever |
| chud | the chat's havent been around long enough to get good historical data i dont think |
| CMaoxian | yes JC, a fantastic Dummy entry there, but as you note that stock went the wrong way today |
| CMaoxian |  |
| chud | it stayed strong despite the selling |
| CMaoxian | yes, lovely action in VPHM |
| CMaoxian | I've got one word for you Benjamin: Vancocin |
| chud | what's it do anyway? |
| CMaoxian | it's what i take for my morning trading prep |
| chud | oh. i'll have to get some |
| chud | steroids alone arent getting it done |
| CMaoxian | ok guys, thanks for coming by... see you next week |
| foofighter | thanks CM |
| chud | thanks chairman |
| JohnD | Thanks as always... |
| jfra | thanks.. |
| JC | thanks. |
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