A Delicate Task
If the market has proven
anything over the last few weeks, it’s that it’s going to take more
than a single news item to turn around this barge of a market. Neither the FOMC,
NAPM,
(
MSFT |
Quote |
Chart |
News |
PowerRating), nor any other four letter acronym by itself is going to
change the current market sentiment that is etched into charts in the context of
resistance level after resistance level. Current intraday trends remain down as
we approach mid-day with 1400 on the NQs developing into a critical level in
terms of trader psychology and coinciding for the moment with 13-minute
resistance.
Like the rest of the trading world, I’ve also been watching the oversold
indicators, the rising volatility indices, and other clues that might suggest
some sort of sustainable bounce. Yet I continue to stick to my guns on at least
having some
support beneath me. Simply put, and at the risk of stating the obvious, I want
— at a minimum — a 13-minute uptrend
before I do anything more than dip toes in on
the long side. For those that like being early and are looking to smaller time
periods, I suggest that a change in a 13-minute trend is mighty
"early" in the context of a market that has fallen to these depths.
Am I suggesting ignoring the current downtrend and foregoing trade opportunities
within the context of established downtrend supports? Not necessarily, so long
as one has clear stop premises on shorts. Yet I find that trading a market that
is significantly oversold or overbought in the longer term (and which can become
more oversold or overbought) is a delicate task at best and we need to keep the
larger picture in mind.
Thursday
September 6, 2001 12:00 PM EDT
(1)
Approx. Equivalent QQQ Price
I’ll be discussing
various moving average setups in an upcoming lesson this weekend and will be
addressing them in even greater detail in the upcoming Q seminar.
Good trading!
P.S. I’m pleased to announce that I’ll
be hosting a two-day
QQQ trading learning forum immediately following TM2001 at the Venetian
Hotel and Resort on October 7- 8, 2001. It seems like we’ve struck a pleasant
nerve with the Q column, and I look forward to sharing my thoughts and views in
a live forum highly conducive to learning and interaction, as well as simply
meeting many of you in person. So whether you trade the Qs or watermelon
seeds, consider extending your stay just a bit and we’ll combine some very
intensive trading discussions and some fun!
For
a more in-depth look at how Don trades the QQQs, click here.