First Nasdaq target hit, here's the next one

Jea Yu has been involved with the equities markets for over 10-years. He specializes with intraday trading in the U.S. equities and futures markets. To receive a free 7 day trial to Jea Yu's Underground Trading Pit, click here or call 1-888-484-8220 ext 1.

Nasdaq 100 e-minis (noodles) tagged the my first target of 1703 on the nose (pointed out in my last report) once that 1693 line in the sand resistance broke out. Ironically, there wasn’t a lot of participation in the breakout from the tier 1 generals like (KLAC | Quote | Chart | News | PowerRating), (YHOO | Quote | Chart | News | PowerRating), (GOOG | Quote | Chart | News | PowerRating), (BRCM | Quote | Chart | News | PowerRating) as we tagged the 1703 level. From that point on, the 8 and 13-minute noodles formed dual shooting stars to selloff into the close.

From this point on, we have to make sure that the noodles hold above 1691 on pullbacks or else we will fall right back into consolidation. If we can successfully retest the 1703 then look for 1713 next target to the upside which is the daily upper Bollinger bands.

For the last two weeks, the market has been spending Friday through Wednesday basing very flat consolidations and breaking out on Thursdays. Since Thursday is a holiday this week, we might look to Friday barring any terrorist incidents for another weekly breakout attempt. In the meantime, we are making sure that we PACE ourselves during the tight consolidation periods by sticking mainly to the first hour and last hour for our trades.

It is very important to remember that one has to recognize his style as a trader and stick to periods where that style works best. Scalpers need volume and swingers need wider time frame trends. There are four parts to trend and its important that every trader realizes this. The most ‘meat’ to play is the breakout channel widening process as well as the peak and channel tightening reversals. Consolidations are the first part of trend and should be avoided. Yet, consolidations can happen 70% of the time.

Its best to take it slow this week and pace yourself with the market. Good trading all!

Jea Yu

Jea Yu has been involved with the equities markets for over 10 years. He specializes with intraday trading in the U.S. equities and futures markets. Jea also is co-founder and lead analyst at www.Undergroundtrader.com, the premier online chatroom for active traders and voted Forbes Best of the Web for active traders four years in a row. Undergroundtrader.com has catered to over 7,000 traders wordwide since its 1999 inception. Mr. Yu has authored best sellers “The Undergroundtrader.com Guide to Electronic Trading” and “Secrets of the Undergroundtrader” both published by McGraw Hill and two videos “Level 2 Warfare and Beating the Bear” from Traders Library. Mr. Yu is a popular guest speaker at the Online Trading Expos and has been interviewed and quoted in major publications such as The Wallstreet Journal, Financial Times and USA Today as well as having several feature articles published in Activetrader Magazine.