Change Of Pace
Both the S&P and Nasdaq
markets have followed through nicely on yesterday’s triggers and
are probing above daily short supports which have been in place for weeks. Both
markets remain long on all of our key intraday time frames, with nicely angled
morning supports which have been helpful on the few pullbacks we’ve seen thus
far — with the main opportunity reflecting trader knee-jerk reaction to the
Consumer “un-Confidence” figure which momentarily provided shorts and
fresh longs an opportunity to enter close to trend supports. The techs remain particularly
strong and are challenging a two-day 10% climb.
The key as we go forward today will likely be the change of pace given the
reduction in volatility, and we may be setting up for an intraday environment
that will mostly favor investors and traders trading the longer time frames,
such as hourly and daily. (And given yesterday’s bonanza of high-probability
setups, getting a head start on the weekend may not be a bad idea.) On the
daily, we may be in a bit of a transition period given the horizontal trend
supports and price probe north, and traders using price crosses should take note
that a daily uptrend is not yet officially in place until we have a 5-MA cross.
If and when we do, opportunities may present themselves for pullback entries for
a potential challenge of the weekly short support, and time will tell which will
play out.
ES (S&P)Â Â Â Â Â Â Â
 Friday October 11,
2002Â 11:00 A.M. ETÂ Â Â Â Â Â Â Â Â
 NQ (Nasdaq)
I’ve been trying
really hard to bite my tongue with respect to Cohen’s words of wisdom the other
day, but I feel I would be doing a disservice to faithful readers if I didn’t at
least comment on it with respect to trading. As many of you know, Tuesday’s
close “looked good” in terms of a longer-term technical bounce as the
S&Ps closed north of hourly support which was a very decent premise for a
moderate-term long position entry. Yet similar to the pre-9/11/01 dawn where the
market was poised to make a high-probability bounce, the unexpected happened —
indeed on a much lesser scope this time in terms of life’s priorities, yet the
concept is the same — and that caused the first attempt to hold key hourly
support to fail. This time we can look to you know who’s sudden revelation that
the market may not just climb a gazillion percent by the end of the year to
reach her long-standing target.
In any event, the key as I mention in the E-Mini
course is second entries. Kevin Haggerty and any pro worth his/her weight in
contracts talks about them. Indeed, Tuesday’s close didn’t “stick,”
which would have triggered small stops on Wednesday, yet here’s where most
traders fail, followed by
re-entries on Thursday triggers! Those
that don’t succeed in this business, which include the vast majority who try,
would have given up and thrown in the towel on Wednesday. And folks, this isn’t
hindsight stuff. First entry doesn’t stick? No problem, stop, reassess, and
repeat if triggered. As I’ve said before,
if this business were simple we could all hire a bunch of monkeys to trade for
us and I could mail this column in from the Cape shore every day.
The only people that succeed in this business are those willing to yield to the
market when necessary and have the perseverance to reenter. When I mentor
folks,
I ask that they all fill out a questionnaire indicating whether they have ever
faced serious adversity in their lives, whether it be personal, business or
financial. I do this because in my view, those that have lived through such
experiences have a much better chance of making it in this business, while those
who haven’t will have to work all that much harder to develop a tenacious mental
mindset which most won’t because they’re simply too lazy or unable to develop
the needed mindset.
Good Trading and Have a
Great Weekend!