An Equal-Opportunity Trader’s Day
The Qs are down slightly as we
approach midday, yet continue to hold
most of Wednesday’s gains in the context of an hourly uptrend (15-MA support,
approx. $30.50). Selling thus far has been orderly, which is a plus for the
bulls (aside from a noon anthrax knee-jerk move on low liquidity), and there
have been a few good long setups off both the 13-minute support (right after
open for two nice $0.25 scalps) as well as the hourly backdrop. Yet call it an
equal opportunity trader’s day as a break of the 13-minute support also provided
a good short opportunity following the long scalps.
Going into the afternoon, my eyes remain on the hourly support angle which has
served us so well over the last several weeks and months, yet a turn in tide on
the lesser time frames will be needed if there’s to be any significant intraday
bounce in the cards.
Thursday May 9,
2002 12:00 P.M. ET
Pet Peeve Quote
of the Decade (Which I must have heard or read at least 20 times
yesterday)
"The economy hasn’t changed in one
day just because of CSCO’s earnings."
My Respectful, but Blunt
Response
"The economy hadn’t changed in the week leading up to yesterday."
The market did yesterday what markets do. And lately, the market has moved in
excessive knee-jerk fashion on every little piece of data, which it did again
yesterday. Frankly, some of this talk is as bad as it was in 1999 to the upside
as the public first becomes hypnotized into believing a trend will never end,
followed by then being surprisingly whipsawed as a result of following the
"pied piper" approach.
My point is to remind us all to
check our opinions and egos at the door and view the market action as depicted
by charts rationally and objectively. No one — including this trader — knows
what the market will do in the next minute, hour or day, so we look to market
patterns and probability (see my recent
lesson) to guide us, which have been biased toward an imminent reversal …
CSCO or no CSCO.
At the risk of stating the obvious, markets don’t go straight up or down and
trends don’t last forever, despite what some industry pied pipers would lead you
to believe. They never have and they never will, which is why the astute and
hard-working trader can position for reversals (with appropriate setups
and triggers) which have much better reward/risk ratios at trend extremes than
focusing on trying to squeeze the last 1% out of a move. Will there be trend
extremes? You bet. But beware of flutists who have vested positions or simply
have no clue.
Good Trading!