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Article Archive For Jesse H. Thompson
DownloadSIDEBAR: Trend again? by Jesse H. Thompson
ARTICLE SYNOPSIS ...Trend again? by Jesse H. Thompson If you look closely at the method and approach ascribed to such market masters as Dow, Wyckoff, Livermore, Gann, Dunnigan and Jackson, you find trend stated as a primary consideration in all of their market operations. A philosophy which has as its emphasis the definition of trend and its goal as trading in harmony with trend, carries with it the great advantage of probability. The momentum of an established trend is not an advantage to be overlooked. Franklin P. Jackson typifies this attitude in his 1951 course The Golden Harvest:...
Speculation Philosophies by Jesse H. Thompson
ARTICLE SYNOPSIS ...Speculation Philosophies by Jesse H. Thompson ""A great thorough-going man does not confine himself to one school, but combines many schools, as well as reads and listens to the arguments of many predecessors, thereby slowly forming a style of his own...,"" Kuo Hsi, artist-priest, 11th Century China Today's overcapacity in processing information fuels great opportunity in many ways, but where reward treads, risk follows. And from the vantage point of the speculator, risk deserves the greater focus because it is human nature to focus on reward with too little attention on risk. The old adage,...
June, 1984 Gold: Studies in Price Action by Jesse H. Thompson
ARTICLE SYNOPSIS ...June, 1984 Gold: Studies in Price Action by Jesse H. Thompson The recent March trend reversal, as represented by the activity of the June 1984 Gold contract, is an excellent study of the interaction of price with natural resistance levels, as well as illustrative of the process of ""distribution to the side"". The most important natural resistance areas for the June 1984 Gold contract relative to the recent rallying activity are the natural divisions of the range formed by the last major monthly peak and the last major monthly bottom. For the June 1984 contract this was the 473.50 top of Jul...
Price, Action and Resistance by Jesse H. Thompson
ARTICLE SYNOPSIS ...Price, Action and Resistance by Jesse H. Thompson Origin, History and Recent Price Action We can not obtain a full account of the ""present position"" (price potential), of any given stock or commodity without a review of its recent price origins, price history and price action. And a wider perspective is possible only by considering a greater time frame than is normally provided in the limited space of most chart services. Hence, the great value in keeping your own longer term charts on each vehicle you monitor. The cycles of supply and demand are characteristically shorter for commodities...
The Seduction of Leverage by Jesse H. Thompson
ARTICLE SYNOPSIS ...The Seduction of Leverage by Jesse H. Thompson ""Leverage 'o Leverage. Ye siren of the speculative sea..."" --Anon. Rule: Do Not Overtrade! I must have bumped into this time worn dictrum a thousand times before I began to understand more fully the implications of this rule relative to actions taken in speculative markets. Of course, early in my studies I decided this rule was simply common sense and too basic to waste any further time or effort on, So I vowed to never overtrade and simple as that I was through with this rule. (Well, maybe I was through with this rule but it was NOT through...
GOLD SWINGS REVISITED by Jesse H. Thompson
ARTICLE SYNOPSIS ...GOLD SWINGS REVISITED by Jesse H. Thompson Review In the March 83 issue of TA, in an article entitled ""Gold: Bull or Bear Market?"", a simple yet very effective trend tool, the swing chart, was used to analyze the greater trend of gold. The monthly swing chart for June Comex Gold was in the position indicated (right). In the article it was noted that the ""failure of the June contract to break the previous swing high (527) is indicative of weakness."" Essentially, the turning down from the second or double-top at 528 established a distribution area at the 527-528 level. From this chart it w...
To Forecast or To Follow by JESSE H. THOMPSON/Technical Analysis staff writer
ARTICLE SYNOPSIS ...To Forecast or To Follow by JESSE H. THOMPSON/Technical Analysis staff writer Browsing the ads of Barron's Financial Weekly or Commodities magazine can be mesmerizing. Financial gurus, ""new discoveries"" and ""wonder"" systems abound. Too much skepticism might be unwise, since new discoveries are in fact made and old knowledge rediscovered all the time. But it's doubtful given the velocity at which they are currently streaming forth, that all these discoveries are as valuable as they claim. Nevertheless, the good is always there in the shadows of the bold print. So, the task becomes to separ...
Market Blueprints by JESSE H. THOMPSON/Technical Analysis staff writer
ARTICLE SYNOPSIS ...Market Blueprints by JESSE H. THOMPSON/Technical Analysis staff writer A method or system for trading can be likened to a building in that its viability depends on its foundation and structure. Ideally the cornerstones of this building will be purpose, preparation and planning. That is, its important first to define the express purpose of a developing method, and then to adequately prepare yourself to properly develop and implement your plan on a practical basis. The framework of the building is composed of the specific parts of the plan. DEFINING A PURPOSE for your blueprint, is not as simp...
The Psychology of the Decision Bee by JESSE H. THOMPSON
ARTICLE SYNOPSIS ...The Psychology of the Decision Bee by JESSE H. THOMPSON A round the market ""hives"" buzz the forever listless market observers, the ""bees"". The hedgers, scalpers, brokers, analysts, traders, speculators, you and I. Within the general category of these ""bees"", there are two subclasses, the participants and the non-participants. some non-participant bees are temporarily so; they do not currently have a position, short or long, in the markets. Then there are the permanent non participants; those who never take positions in the market but are content to divine and impact the direction and ps...
WHAT TEXTBOOKS NEVER TELL YOU by Jesse H. Thompson
ARTICLE SYNOPSIS ...WHAT TEXTBOOKS NEVER TELL YOU by Jesse H. Thompson Post Pattern Activity Most texts on market form or activity describe certain price patterns that occur with great frequency; these texts also define the implications of these price patterns and their potential movement. Studying ""market habits"" as Jesse Livermore called them can be of great value to the analyst or trader who has the capacity to interpret them. Many of these market habits are widely known and commonly referred to, yet used in isolation they can prove deficient. A rule of thumb is: To validate the implications of any such pr...
The Head and Shoulders Formation by JESSE H. THOMPSON/Technical Analysis staff writer
ARTICLE SYNOPSIS ...The Head and Shoulders Formation by JESSE H. THOMPSON/Technical Analysis staff writer Technical analysis as it is applied today to the anticipation and projection of impending price movement of stocks or futures markets might be broken down into three major areas of study. These are: 1) The study of price activity itself 2) the study of derivatives of price and 3) the study of internal indicators. The study of price activity itself is generally of older vintage. The book, ""Technical Analysis of Stock Trends"" by Edwards and Magee is a study of market formations and trends within this area. ...
The Livermore System by JESSE H. THOMPSON/Technical Analysis staff writer
ARTICLE SYNOPSIS ...The Livermore System by JESSE H. THOMPSON/Technical Analysis staff writer Livermore is one of those names you might hear floating around among the chatter and ticks inside the local brokerage office. Or maybe you will catch a reference to him in some obscure article or book. Just as the markets of the various exchanges are often mystifying, so too are many of the historical characters surrounding the markets. Jesse L. Livermore was one of those characters, passing in and out around the Wall Street of the l890-1940 period. The classic ""rags to riches"" stereotype of this period. Humble begin...
Gold: Bull or Bear Market? by JESSE H. THOMPSON
ARTICLE SYNOPSIS ...Gold: Bull or Bear Market? by JESSE H. THOMPSON How to use a monthly swing chart to determine major trend. Before you attempt to answer the question, it is imperative to first define which trend you consider to be the greater trend. For in the crosscurrents of markets exist several trends coexisting over variable time periods. To one person an upmove lasting several days is a bull market while to another the very same move is considered a normal corrective rally within an ongoing bear market of longer duration in time. Therefore, first determine what you define as a bonified bull or bear mar...
Confessions of a Speculator: Why Losses Occur by JESSE H. THOMPSON/Technical Analysis staff writer
ARTICLE SYNOPSIS ...Confessions of a Speculator: Why Losses Occur by JESSE H. THOMPSON/ Technical Analysis staff writer ""The Markets"", whether envisioned as the stock markets, the futures markets or any of the myriad forms and reflections of price activity, are all somewhat compelling. Driven by hope, fear, greed, curiosity or crowd psychology countless individuals gather around the exchanges of the world (or by proxy around their quote machines and computers), noting and participating in the constant movement of prices. Maybe it's the reflections of the future, cast in the shadows of price activity that compe...
December Treasury Bonds by JESSE H. THOMPSON/Technical Analysis staff writer
ARTICLE SYNOPSIS ...December Treasury Bonds by JESSE H. THOMPSON/Technical Analysis staff writer Interest rate futures are always interesting to chart as well as to trade. Aside from the speculative aspects of interest rate futures, it is also valuable to know how much a lender is going to charge to let loose of his cash for awhile. For trading purposes the December and June Treasury Bond contracts are good vehicles to employ. I also find a quarterly Dow Jones 20 bond chart dating back to 1966 and a monthly chart of the long term Treasuries (15 years or more) are helpful. The following trades or positions were ...
The Nature of Price Resistance by JESSE H. THOMPSON/Technical Analysis staff writer
ARTICLE SYNOPSIS ...The Nature of Price Resistance by JESSE H. THOMPSON/Technical Analysis staff writer Most of us involved with speculative markets often are so preoccupied with ""effect"", or price activity, that we ignore ""cause."" But an understanding of cause can clarify our analysis of that all-important effect. Basic cause might be defined as the ever-changing relationship between the forces of supply and demand. We traders tend to think of commodity contracts only as speculative vehicles or abstractions. We tend to forget that the commodity contracts we so actively trade normally are a reflection of th...
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