Euro Chat with Joe Ross
Chat log from: Wednesday, June 4, 2008
| JoeRoss joined. | |
| SusanV joined. | |
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| Joy joined. | |
| JoeRoss | Hello everyone. |
| GregV | Hi all. |
| GregV | Hi Joe. |
| SusanV | Joe, I read that airlines are in big trouble because of increasing costs of fuel. |
| SusanV | Does that mean Americans can soon no longer afford to fly to Europe? |
| Joy | Joe: Good afternoon! |
| Joy | Hello Susan and Greg! |
| JoeRoss | SusanV: Yes that's true. But airlines are not the only ones. General Motors is also in big trouble. Their truck sales are way down and they are about to go below 20% of the market share. |
| SusanV | Several airlines have already gone bankrupt, some filed bankruptcy. |
| SusanV | Hi Joy. |
| JoeRoss | I hate to say it, but GM is very close to going bust. If it does, it will be devastating. |
| SusanV | How are they solving this problem then? Nobody can travel to the US with these increasing costs. I thought they let the dollar drop so that more people would spend their vacation in the U.S. to strengthen the country? |
| JoeRoss | U.S. airlines are going bust, but that doesn't mean other airlines are going bust. Some will consolidate with others and now they have the open skies policy that lets more airlines fly to more places. |
| Joy | I am assuming overseas airliners are not in so much trouble with fuel cost because of the relative strength of their currencies, e.g., Euro. |
| JoeRoss | Joy: That's true. The high price of oil in dollars is actually a boon for people on the euro. |
| SusanV | But if more smaller airlines go bust, then competition gets less and the leading airlines can raise their prices as they choose. |
| JoeRoss | Since fuel is priced in dollars, other nations can buy much cheaper than in the U.S. |
| JoeRoss | SusanV: They will have to raise prices, but they will also fly fewer flights to ensure that they fill every plane to capacity. |
| JoeRoss | Mostly domestic flights will be hurt. |
| SusanV | The economist has an article about this, called "Buckle Up". They also write that less and less people travel business and first class. The % rate is decreasing |
| JoeRoss | The U.S. is now a cheap vacation place and people who could never before have afforded to come here are coming now. |
| Joy |
What is worrying is the amount and depth of U.S. debt. Joe mentioned about that in the great article Liquidity Breeds Stupidity. Now more companies need cash but will have a hard time with issuing corporate bonds, e.g., airlines. And counties and states across the country are going broke and have a hard time to issue municipal bonds. |
| JoeRoss | The Business class flight I was on with Lufthansa from Frankfurt to Denver was full to capacity. There wasn't a single empty seat. |
| SusanV | Does that all have any meaning for the trading community - can we take advantage of a fuel crisis like that? |
| Joy | Maybe we can host all the seminars in US and make it a vacation package for oversea students :-) |
| JoeRoss | SusanV: Not directly, we can't. But we can trade the price of crude oil and profit indirectly. |
| SusanV | Well, regarding first class and business class they write that their numbers fell by 3.9% worldwide in March compared with a year before and by a staggering 8.5% in North America. |
| JoeRoss | By the way Soros is now calling oil a bubble. He says the hedge funds have jacked the price of crude to unrealistic levels. |
| SusanV | Joy, you are very creative and innovative. |
| SusanV | We have to invite our students from overseas to come to Texas. |
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| JoeRoss | Personally I would not be surprised to see crude drop as far as $80, but I really don't know when. |
| Joy | Yeah, and I will come too! And see Joe in person! |
| JoeRoss | SusanV; that makes sense. The greatest drop would be in North America. |
| Joy | Joe: You don't trade CL though. I remember you said the only oil you used was that of fried chicken :-) |
| JoeRoss | Personally, I don't want the mess of having seminars in the U.S. It's a lot of trouble making all the arrangements. |
| JoeRoss | Joy: Now that CL is electronic and not as crooked as it was, I may start trading it again. |
| SusanV | Joe has his seminars online now. |
| SusanV | Should be most convenient to any trader. |
| JoeRoss | I prefer the one-on-one personal training when it is possible to do it. |
| JoeRoss | Since it can even be done over the Internet, there is no point in U.S. seminars. |
| JoeRoss | I have already given one-to-one seminars in China, Africa, and Germany. |
| Joy | Joe: how about the other oil-related commodity, like RBOB and heating oil? Are they less crooked too? |
| JoeRoss | Those online seminars worked out just fine. Almost like they were sitting here in the room with me. |
| SusanV | Joy, we must be twins ;-) |
| JoeRoss | Joy: Yes,oil and gas are less crooked but beware of illiquidity. |
| JoeRoss | Well, you are the two best looking people in this chat. |
| SusanV | Joe, what is the word of the day? Do you have a piece of good advice to the trading community? Something to be aware of? |
| Joy | LOL... Joe and Susan: You are funny. |
| Joy | Wait marsh is here. He is good looking too! |
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| Joy | Hi marsh! |
| paola | Hi Joe. I'm fine and you? |
| marsh | Hi Joy |
| Joy | Ciao paola! |
| JoeRoss | Word of the day: Watch the homebuilders. We may have seen the bottom in home building. |
| SusanV | Hi Paola, hi Marsh. |
| paola | Hi all my friends. |
| JoeRoss | Hi paola: I'm just getting over a cold. |
| JoeRoss | Their stocks will start rising again within this year and now may be a time to get in at the bottom. |
| Joy | Joe, did you get the cold from Loretta? Did you not just get over a flu virus Joe in April? |
| SusanV | Well, houses in Cedar Park are definitely too expensive. You cannot get a house bigger than 3 bedrooms for less than $150K. |
| JoeRoss | One builder is giving 2 houses for the price of one. If you buy one of his homes in California for 1.6 million, he throws in a $225,000 home for free in Escondido, Calif. |
| SusanV | Too bad you can't get a loan for $1.6Million. |
| Joy | Dear me, don't I wish to have that kind of money to throw around? I always want to live/visit CA. |
| JoeRoss | Joy: I think I got the cold from Loretta. But I don't recall having a flu virus in April. Maybe I did. I have a very weak immune system. It has never recovered since 1987 when I was hospitalized for 3 months. |
| Joy | Poor Joe, I am so sorry to hear that. Maybe you need more than 5 hours of sleep and getting up later than 2AM :-) |
| Joy | And eat a lot of your good lettuce and fruits. |
| SusanV | When i look at all the great mansions in Austin, those very expensive houses, I wonder how much time the owners actually get to spend in those houses since they work most of the time to keep their standard of living. |
| SusanV | Even I don't spend all day in my apartment that is really not cheap. |
| JoeRoss | Sometimes you wonder how much house does a person really need. Beyond what is actually needed is a waste of sorts. Maybe it just gives some people ego gratification. |
| JoeRoss | But you see when people get rich they often buy a huge house. |
| Joy | Wow, I did not know Austin is famous for great mansions... I always think of it as a great music town. I guess that is the price to pay for the boom in Texas. |
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| TradeCraze | Hello Mr. Ross. How's things? |
| JoeRoss | I rather prefer to be like it is in the book "The Millionaire Next Door" Living modestly, with no more than what I need. |
| SusanV | Oh yeah Joy, there are some very expensive areas in Austin up in the hills. You have to drive by with a humble mind or you get really envious. |
| JoeRoss | Joy: Lots of millionaires live in and around Austin. |
| JoeRoss | Hi TradeCraze. |
| Joy | Joe: THAT is very true. I read that book too. But does that mean the housing market bottom is close behind? Or is there a long lead time between homebuilders industry and the housing market overall? |
| SusanV | Even Sandra Bullock (actress) built a house in this area by lake Austin but then she broke up with the guy she married (Jesse James) down here in Texas and I don't know if anybody lives there. |
| JoeRoss | Joy: Long lead time. |
| JoeRoss | I think maybe the richest guy is Michael Dell. But there are many more. |
| JoeRoss | There are many $2 million and higher homes overlooking the lake and in the hills. |
| Joy | Yes, if I ever visit Austin, I will remember to keep a humble mind :-) I had no idea Sandra Bullock lived there AND broke up with that guy :-) I am learning more than trading today! |
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| JoeRoss | Hi dryice |
| dryice | Hi Joe! |
| TradeCraze | Yes very beautiful in the hills around that lake .. who knew that was there when I visited the area I was surprised how beautiful the area around the lake was. |
| Joy | Hi dryice, I don't think we ever 'met' before - I am a month new to this chat. How are you? |
| TradeCraze | Have we talked about oil today? |
| SusanV | We talked about fuel. |
| TradeCraze | It cost me $124 this week to fill up both of my cars ... this is a joke. |
| JoeRoss | Yes, we have talked about oil. I posted something about oil in the forum today. Soros thinks it is a bubble created by the hedge funds. |
| dryice | Well, I've just received my first issues of Traders Notebook and am still trying to find my way around. |
| TradeCraze | Ok thanks, I will go over there and read it. |
| SusanV | Yes, Joe posted it in the Stock Investment Board on the TE Forum, it's called "Oil is a Bubble." |
| JoeRoss | Crude futures are 122.34. |
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| Hrasa | Hi, traders. |
| JoeRoss | Hi hrasa. |
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| Joy |
Joe: I have a question on the 30 year Bond (June). When I looked at the daily chart, ZB, ECBOT, it broke out of the recent congestion but reversed with equal strength starting 5/30. Is it just returning to the wide swing pattern this year? |
| paola | Ciao Fabio. |
| fabio.it | Ciao paola. |
| fabio.it | Hi joy. |
| marsh | Matthew McConaughey the actor lived in Austin for a few years. He lived in a trailer in a trailer park. The kind where you can drive off with it at any minute. |
| fabio.it | Hi all. |
| TradeCraze | Ciao. |
| JoeRoss | Joy: I have no idea. |
| Joy | Joe: I also looked at the calendar spread for ZB, Dec - Jun, as you mentioned one time. And the spread is climbing in an up move. |
| Joy | Ciao Fabio my friend, how are you? |
| JoeRoss | Hi Fabio. |
| GregV | Thanks Joe, got to go. |
| dryice | Goodbye, traders - dinner is ready - :-) |
| GregV | Bye. |
| fabio.it | Fine thanks... and u? |
| JoeRoss | marsh: smart man that McConaughey. |
| JoeRoss | Joy: If it is rising get in. |
| TradeCraze | Fabio, are you the person that was staying with JR? ... I think I met you when I came for some training a few years ago. |
| Joy |
I am well Fabio... I am learning local rich and famous around Austin. Marsh just told us McConaughey used to live in a trailor there... |
| fabio.it | I don't believe I'm the one...I attended two seminars the last 2 years in Italy. |
| JoeRoss | Craze: That was a different Fabio. |
| TradeCraze | Must be thinking of somebody else ... |
| TradeCraze | Ok. |
| JoeRoss | The Fabio who was living here was Fabio Pesavento. |
| TradeCraze | Ah, yes that was his name ... nice chap. |
| JoeRoss | I have no idea what has become of him. |
| JoeRoss | But he may be living is Switzerland. |
| JoeRoss | He was from Bibioni, Italy. |
| fabio.it | joy... did you survive thunderstorm? |
| marsh | Lately, I've been liking the bond chart (USM08) on a 15 minute chart. |
| TradeCraze | marsh, I agree it has been very kind this year on that time frame. |
| JoeRoss | marsh: It is a rare time when you can trade bonds on a 15 minute chart. So go for it. Get it while the getting is good. |
| fabio.it | Joe... euro fx is making a long congestion on 30min chart... how would you handle it? |
| SusanV | Did anybody read the posts from DavetheKiwi on Joe's forum? It's in the section for Beginning Traders. |
| TradeCraze | Seems like the electronic markets are loaded with people now trading ... lots of liquidity. |
| SusanV | It's really an interesting read. |
| Joy | Thank you marsh – that is great lesson! I read Joe’s book, Trading the Ross Hook. And Joe said something about trading in the 120 minute-time frame. I wondered how it would work out now. |
| JoeRoss | Fabio: I would try to write option strangles if i could get good premium on both sides. |
| marsh | I don't know Joy. Check it out for yourself. |
| JoeRoss | Joy: a 15 minute tradable bond chart is a gift. It is not at all the usual situation. |
| marsh | Sometime ago, Joe mentioned a 2 bar reversal. There are at least 2 of them on 15 min USM08. |
| Joy | Thanks Joe and Marsh! Why is it so rare? Is the best pattern usually forming at a longer time frame? Or is it just unpredictable? |
| TradeCraze | Boy bonds going nuts on fedspeak. |
| JoeRoss | Joy: Rare because there usually is not much to look at on a 15 minute bond chart. It usually looks more like a tic-tack-toe chart. |
| Joy | Joe: THANK YOU! I understand now :-) |
| JoeRoss | Also crooked politicians. |
| SusanV | Joe, which ones are the most liquid markets to trade? And which ones are the most volatile markets? |
| paola | Joe, what do you think about British Pound. It's a good substitute of Er2? I've read it in the last US chat. |
| SusanV | Hrasa, did you bring any questions today for Joe to answer? |
| JoeRoss |
SusanV: Markets vary as to liquidity. But the most liquid U.S. market by far is the eurodollar market. The most volatile may be any market at any time. Natural Gas is often very volatile, but any market can become volatile. |
| JoeRoss | paola: I did a long look at BP, but it is no match for ER2. I have not found anything that can compare with ER2 for day trading. |
| SusanV | Do you trade any of those markets you just mentioned that have high volatility / good liquidity? |
| SusanV | Hey everybody, where are your questions and comments??? |
| JoeRoss | SusanV: I trade ER2 which has terrific volatility intraday on short-term charts. It really rocks and rolls. |
| JoeRoss | All of the currencies have good liquidity and so does the Emini S&P. |
| JoeRoss | Bonds and notes are very liquid. |
| Joy |
Joe: Is eurodollar commonly traded? I never see / read about it even though it is liquid. Marsh mentioned about your using the stair steps as trading strategy - I have not got to that in my book yet and am just curious. |
| SusanV | Thanks Joe. |
| JoeRoss | Joy: It is the most liquid Market in the U.S. and also traded in (Japan or maybe Singapore). It is a quiet market and is best traded with futures spreads or option spreads. |
| marsh | Joe, in the stock market, stocks that have high liquidity day after day usually have low volatility. Isn't that true? |
| marsh | By high liquidity I mean high volume. |
| JoeRoss | marsh: That is true. Most of the Blue chips meet that description. |
| Joy |
Joe: Thank you!! Back to the word of day, homebuilder, you gave us earlier… how would you trade? Find the top picks that fell to the right price range, buy and hold? Or would you go for a different route, e.g., trading the sector as a whole? |
| JoeRoss | Joy: I would look at the top home builders. Ones like D.R. Horton. There are a couple of others, but they aren't coming to mind at the moment. |
| Joy | Thank you, Joe! That is a great starter for me! |
| Joy | Joe: There is talk about a temporary US dollar rally... but I thought Swiss Franc looked like in congestion lately and Fabio just mentioned Euro in congestion. |
| fabio.it | If there is one tip to trade for living, what is it? |
| JoeRoss | Joy: The dollar rally was to be expected. I don't know how long it will last. |
| JoeRoss | fabio: one tip: Don't lose your money. |
| Joy | Joe: you said you were working on something to solve the problem in that Liquidity Breeds Stupidity thread. Are you close to announcing it? |
| fabio.it | i am the king of stop loss |
| JoeRoss
|
Joy: I'm close. |
| JoeRoss | It will contain some trades, and some observations. |
| Joy | WOW Joe! The ultimate golden nugget! |
| JoeRoss | People are always asking me what I'm in and what I'm doing. So in these my latter years, I am going to tell them. But it will be for a price. |
| marsh | About the dollar rally albeit a congestion in the Euro. The Euro congestion is so wide, if the dollar traversed the width of it, it would be quite a rally. |
| Joy | Thank you Joe – I cannot wait to subscribe to it! |
| SusanV | Joe, you are the hero in this trading business. |
| marsh | In other words, TN is what Andy is doing and thinking. |
| JoeRoss |
I hope to begin in July. It is going to have a lot of currency trades in it, as I think being in the right currencies at the right time are one of the best ways to protect against the falling dollar and all of the other problems we are seeing in the U.S. and also worldwide. |
| JoeRoss |
Traders Notebook (TN) is prepared by Andy. Andy is truly an expert spread trader and a great observer of markets. TN has Andy's flavor in it. I want to offer some very short term trading and some very long term trading and everything else in the middle. |
| JoeRoss |
Andy does not do much with currencies and Traders Notebook is not geared toward capital preservation. It is purely a trading letter. My letter will be about how to save your rear end in times like we are now facing. |
| Joy | Thank you Joe! That sounds like a great way to learn and, for a beginner like me, to evolve through your years of wisdom. This is really exciting! |
| Joy | :-) We need the savings... between inflation and taxes. |
| JoeRoss | In many ways it will be different from any letter I've ever seen. It will not contain a portfolio. It will have only an equity curve. I will tell when i enter a market and when I leave a market. Nothing in-between other than commentary. |
| fabio.it | Good luck... |
| JoeRoss |
The letter will be about the way I do things--the way I trade. I don't believe in portfolios. I don't believe in win-loss ratios. I never keep many or any of the statistics that others keep and drive me crazy with. |
| JoeRoss |
So they won't be included. That in itself will keep many away, but that's their tough luck. If they want me they will have me as I am, and as I truly think and trade. |
| JoeRoss | I'm 12 minutes over and so I have to leave. |
| JoeRoss | Thanks for the chat today. It was interesting. |
| JoeRoss | Bye to all. |
| Joy | Thank you Joe for your words of wisdom! |
| paola | Bye to all. Ciao!! |
| marsh | Thank you Joe, see you tonight. |
| marsh | See you Joy. |
| fabio.it | Bye all. |
| Joy | I think many would appreciate the guiding principle, rather than fancy pie chart of portfolio :-) |
| JoeRoss | Ciao |
Next EURO Chat with
Joe Ross:
Wednesday, June 11, 2008
Time: 8:00 - 9:00 P.M., European Central Time (Berlin, Paris, Rome)
COME BACK WITH YOUR TRADING QUESTIONS & COMMENTS!
