What I’d Like To See Today

• January 2, 2003
• Don Miller

The major indices are ringing in
the new year in the solid green thus far today
as traders have reacted favorably to
better-than-expected ISM and Construction Spending data, which spiked ES 10
points in a blink of an eye. Also aiding the bounce was an underlying coil
reflecting price/momentum strength divergence on the hourly charts which we
discussed in

Tuesday’s column.

Pullbacks have been shallow at best since the 10 A.M. ET moonshot, and ranges
extremely narrow which have presented a bit of a challenge in terms of
high-probability morning trend entries as we approach midday of this first
trading day of 2003. 

Heading into the afternoon, I’d personally like to
see either one more push up on the hourly or a break of the 13-minute to provide
a reversal trade premise better than a flip of the coin in terms of probability
and reward/risk ratios. Specifically, one more surge on the hourly may provide
sufficient short potential upon a 3-minute break since we will have pulled away
from the 13-minute trendline.

Alternatively, the 13-minute chart may provide either a break premise upon
failure or a long premise based on one of our favorite “oversold on support”
setups should support hold and momentum decline on any decent pullback and test.

ES (S&P)         
Thursday January 2,  2003  11:45 A.M. ET            NQ
(Nasdaq)

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

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Good Trading and Happy New Year!

Don Miller