It’s All In The Numbers
One of the ways in which I
like to gauge a day as being either a high-probability day,
or a day in which its better to sit on one’s thumbs,
is by knowing the importance of key levels.
Technicians love to use Fibonacci levels,
moving averages and other assorted technical goodies, but just as important is
knowing key price levels that just about everyone and their extended families
can focus on–what I’m referring to are psychological levels that act like
magnets for the masses.
Remember all the party hats and horns blowing at
Dow 10,000 and Nasdaq 5000??? Well, today’s celebration of Naz 2000 might not be
as lofty a benchmark, but by the looks of it, people are looking, acting, and
probably itching–right about now.
On days where the market is kind enough to give
us a test of a key level, I personally don’t need anymore information regarding
the proverbial battening down the hatches–and the reality that it’s most likely
not time to pop open the champagne just yet.