A Day To Embrace
A day to embrace is one way to describe yesterday’s
price action. Whether you were a bull or bear, the market had
something for you yesterday. The price action was excellent as the market went
from falling off a cliff to proclaiming the elusive bottom. As my colleague and
I were discussing yesterday, bear market rallies are vicious. Let’s hope the
price action continues.
Yesterday was also a perfect example of a day to implement Position Sizing,
as mentioned in my column
yesterday. There were three factors evident early on yesterday that should
have encouraged you to step up and be more assertive in your trading:
- Intraday range
- Ample volume
- Extreme emotions
It is a day like yesterday that will allow you to fully capitalize as a
trader. I trust you adjusted either the frequency or size per trade or both. You
need to be at the trough when it is feeding time.
The trade of the day, non-HVT, was the setup mentioned in my
service on Sunday evening. The trade was on eBay
(
EBAY |
Quote |
Chart |
News |
PowerRating). I pointed it out in the text below:
"EBAY is charting technically well and is
offering some potential long swing trades off the 60-minute chart. EBAY has
formed a 4 point up trendline and has pulled back after a powerful spike
through resistance to 64.00 on heavy volume. Currently, the price is in
consolidation between the 38% and 50% retracement levels from 6/06 lows to
6/18 highs. With a little help from the S&Ps, EBAY should break through
the 38% retracement at 60.17. If I gave you a target for this trade you might
laugh…so I won’t. Bear in mind that EBAY has been strong relative to the
market and we’re at critical price levels. If we find a short-term market
bottom here, EBAY has a good shot of retesting recent highs which are quite a
ways higher."
With the strength of the market, not only was the trade triggered, it also
far exceeded the potential I had anticipated. Take a look a the five-minute
chart to see the setup and continuation.
We are likely to continue to see good price action today as the market is set
to digest two economic reports at 10:00 AM EST, Housing Starts and Consumer
Confidence. Any deviation from the consensus will likely offer some great
trading.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 1025-26 (confluence and key resistance) |
1118 (confluence and key resistance) |
| 1018 | 1104 |
| 1007-10 (may be choppy in here) | 1090 |
| 991 | 1072 |
| 979 | 1054 |
| 970 (contract low and confluence) |
1038-40 |
| 1033 (contract low) |
As always, feel free to send me your comments and
questions. See you in TradersWire.