Adjusting To Altitude

• November 4, 2002
• Don Miller

Both the S&P and
Nasdaq markets have extended Friday’s closing 13-minute, hourly, and daily
uptrends and have broken out of their
longer-term logjam, thanks largely to Microsoft
(
MSFT |
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PowerRating) which provided fuel
for extension of the bullish cups we discussed on

Friday. With much of the gain occurring on the overnight gap and with
volatility dropping yet again, intraday opportunities have been limited thus
far, as traders adjust to the new altitude. 

Heading into the afternoon session, pullbacks to 13-minute supports with
confirming follow-through signals may be worth noting. Yet, given the early
conditions and pre-Fed positioning, I’m encouraging the ultra-picky “I’d be
stupid not to take this signal” mode, given the limited opportunities and desire
to let the obvious trades present themselves before committing capital. 

Longer-term traders may want to keep an eye out for any post-divergence reversal
triggers over the next several days and upcoming weeks, should traders take the
markets toward monthly 15MA downtrend support, which has been in place since
2000.

ES (S&P)         
Monday, November 4, 2002  11:30 A.M. ET            NQ
(Nasdaq)

Moving Avg Legend:
5MA
15MA 60-Min 15MA

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Good Trading!

Don Miller