How To Be A Trend-Following Moron 101
Every now and then, it is nice to see that simple concepts that have been
tested over time work, and if you are paying attention, you will not be surprised
when they play out. From some of the questions we have been getting at TradingMarkets.com,
it appears that some of you were surprised.
We often will highlight action in the three major indices, as well as their
futures contracts. The Nasdaq Composite
(
COMPX |
Quote |
Chart |
News |
PowerRating) should not have
fooled you, based on Friday’s action alone.
Why? The trend is clearly down, and so far (although Friday was
a solid day on an intraday basis) all I am seeing on the daily chart is a simple
pullback from low.
Monday continues to play out the pattern, as the index stalls at
the level of recent support. Tuesday and today have acted just as they should.
While the market does not always behave as it should, it should not
surprise you when it does. You should always be aware of what the most
likely path of least resistance is. Keep an eye as to the trend, along with
support/resistance and key Fibonacci levels, and you will find your market
awareness will improve — which can only help your trading.
Until tomorrow,
P.S. Dennis, thanks for that wonderful photo you emailed to me yesterday. I
will never look at a Krispy Kreme the same way again.