Thor Industries, Inc. Weekly Bullish Gartley - Exit

The top chart is the Daily, the bottom chart is the Weekly.

Today we opened with a gap up. Looks like profit taking got a little carried away. The Daily created a Bearish Engulfing pattern on high Stochastics and closed under the 8ema. It also hit my stop at 98.38 and exited with a little slippage at 98.28.

The Bearish Engulfing pattern on the Daily followed a double Doji and a Negative Stochastics Diversion. We're also about to enter a new phase going into January. This chart from 2008 - 2018 doesn't add any confidence:

Jan 2019 was an up month and Jan 2020 was a down month to complete the picture but the S&P 500 is currently very overbought.

Now, on the Weekly, THO is not yet overbought nor has it closed below the 8ema. So the Bullish indications that got us into this trade have not yet been violated. If we were trading on the Weekly chart we should still be in the trade. However, we would have needed a much lower Stop and therefore a much smaller position in order to control the risk. And the setup looked so good, I didn't want to go in that light. Options would have been a good solution but the options on THO are terrible in terms of liquidity and Bid/Ask spread.

So, the bottom line is that being stopped out of this trade, with the current price action, is better than holding on. I suspect this will bottom out on the Daily relatively quickly and start back up, unless the overall market starts to tank.

We'll monitor the THO chart and look for an entry for a new long position.

Summary:

Enter: 102.75

Exit: 98.38

98.38 - 102.75 = -4.37 * 50 shares = -$218.50 into the Loss column.

Corn Cup Forming - Exit

The top chart is the Daily and the bottom chart is the 3 minute.

On the Larry Pesavento internet show on TFNN this morning Norm Winski warned of a significant reversal in grains tomorrow after the close. You can see it for yourself by going to minute 41 at:

https://www.youtube.com/watch?v=HHH4i_IIvR8

This hyper-sensitized my caution with this Corn trade. So, at 2:00pm ET I went to the 3 minute chart and started trailing a Stop, with the intention to exit before the close at 2:20pm one way or the other.

I ratcheted up the Stop through a few levels but none were hit and there was less than a minute left before the close. At 14:19:51 I hit the Bid and sold out at 456 5/8. You can see the original Target on both charts at 468 1/2 just under the 27.2% Fib extension. We may well still hit that, maybe as soon as tomorrow before the close, but that seemed a little too perfect to base a trade management decision on. If we do hit the original target it may not be for several days or weeks, or even longer. And who knows how big the draw down would be.

We could have waited to see how trading went tonight and tomorrow morning since Mr. Winski's reversal time was after the close tomorrow, but we only have 1 mini-contract on, so we can't scale out. Plus the potential down turn could begin early. Wanted to manage the exit while I could, not find an unwelcome surprise when I woke up.

So, in summary:

Entry: 427 1/2 on 12/16/20

Exit: 456 5/8 on 12/28/20

456 1/8 - 427 1/2 = 29.125 * $10/pt = $291.25 call it a win.

If it was the full size ZC contract the profit would have been 29.125 * $50/pt = $1,456.25

Corn Cup Forming - Update 7

Been continuing to trail our Stop behind the low of 2 closed candles back each day. Starting today I'm changing the Trailing Stop to just under 1 closed candle back.

So, the last trading day was 12/24/2020 and the low was 446 1/2, so I just moved the Stop up to 446.

I tightened the Stop because we're very overbought, we've had an unusual number of green candles in a row, I'd like to capture profits in this calendar year, and tomorrow is a full moon. There seems to be a body of evidence and many successful traders that show there is a significant correlation between trend reversals in the grain markets and full as well as new moons.

Here are some very intelligent, successful traders with followers who are convinced of this correlation:

Tim Bost (www.timbost.com)

Norman Winski (www.astro-trend.com)

Shane Smoleny (www.wolftraderfutures.com)

Bill Meridian (www.billmeridian.com)

Arch Crawford (www.crawfordperspectives.com)

2 Gartley's on a Mar YM 3 Minute

Check out these 2 back to back Gartley Patterns on a 3 minute March YM futures chart. Both were successful scalps using a 61.8% retracement of the AD range as the target.

Larry Pesavento's book "Trade What You See" says the Gartley Pattern is successful 70% of the time.

Note these are not rigorous Gartley's as far as Fibonacci levels. It may be better to call them XABCD patterns.

Corn Cup Forming - Update 6

Same comments as yesterday's post. Holding the Target at 468 1/2 with a Stop at 430.

Thor Industries, Inc. Weekly Bullish Gartley

The top chart is the weekly. The bottom chart is the Daily.

I normally have been trading futures rather than stocks but last night on CNBC's "Fast Money", Guy Adami called out Thor Industries, Inc. (THO) as a bullish bet. I thought I saw an Inverted Head & Shoulders on their chart. So I took a look at it on mine and found a textbook bullish Gartley pattern on the Weekly.

Also found a Twentyman Line pattern and an AB=CD Pattern with a 38.2% Fib pull back. Both very bullish.

So I'm long from 102.75 but I'm very skittish about the equity markets, so I'm setting a nearby target. There are many targets available for this trade. I'm using the 27.2% Fib extension of the green range, which is 106.63, and is near the .618AD of the Gartley at 105.02. It's also near the Gartley C point at 107.59. The actual Sell Limit order is for 106.50.

Corn Cup Forming - Update 5

It's 7:15am ET. I'm concerned that even though we're in the middle of a BB/KC break out, there's going to be a liquidation today or tomorrow due to the Christmas break. 

Also, look at how many green candles we've had in a row. Its easiest to look at the volume bars to see this. Not counting today, we have 8. I went back all the way to the beginning of this contract and the most green candles in a row is 7. The first 3 or 4 in this current sequence are Doji's, so maybe those don't really count.

If you look at the high Stochastics, the lack of a red bar, and a 4 day Christmas holiday, I want to employ some prudence. So I moved the Stop from 428 to 430, which is just below the 2nd candle back. 430 is also well below the 8ema. 

Moving from 428 to 430 doesn't make much difference, but its the beginning of trailing a Stop just under the low of 2 candles back.