Adaptation Is Key

Options
expiration Friday is upon us.
Hopefully yesterday’s options-related
dull price action is behind us. A report on German business sentiment hit its
lowest level since 1993, much lower than expected. The results were compiled
after the Sept. 11 attacks. European exchanges were off as a result. This may
not in itself offer intraday setups, but it is painting a clear picture of the
world economy as a whole. From am investment standpoint, I can’t help but remain
bearish.  The charts and valuations also prove this point.

Looking ahead to today’s session, I
can’t stress enough how important it is to refrain from trading when the
intra-range just does not warrant it. Options expiration is notorious for choppy
price action. Traders need to be clear on when you can "scalp" vs.
taking trades based on a 5- or 15-minute chart. Yesterday was a great example of
very few "scalp" setups. (Refer to my most recent
lesson
for more details). My trades yesterday revolved around the 5-minute
charts, thereby extending the duration of my trades from less than 3 minutes to
10-15 minutes. Adaptation is key, and will allow you to handle any market
scenario.

Key
Technical Numbers:

S&Ps

 Nasdaq
1084 1351.67
1076 1333.5
1071.34 (opening
only)
1325.76
1064 1314.75
1058 1295
1049 1278

As always, feel free to send me your
comments and questions. Have a great trading day and weekend.

Dave