Conflict Continues

September 11, 2002
Don Miller

The hourly uptrend vs. daily
downtrend conflict on both the Qs and SPYs
continues as we enter today’s shortened trading
session.Â As of today’s delayed open at 11:00 a.m. ET, technology was the early
leader as the Qs opened with a 2% gap (stretching it to 2.5% shortly after open)
vs. the SPYs 1.5%.Â All price moves of course, including yesterday’s climb, have
been on light volume both in terms of yesterday’s thin trade as well as the
overnight Globex casino.

While I suspect volume will remain very light today and the current relief rally
may be highly suspect longer-term on the approach toward daily downtrend support
and potential right shoulder, such is absolutely no reason to short into climbs
without appropriate triggers and turns on the lesser timeframes, as the market
will do what the market does — just with fewer participants, which can
exacerbate price moves.Â

Longer term, the daily downtrend support, as with any trend support, should be
respected as it is tested, and the market will again play final arbitrator to
determine if the lesser timeframes have sufficient strength to break through the
current ceiling for more than a few price probes.Â

As I mentioned yesterday, this conflict region — while potentially troublesome
to longer-term traders until resolved — can provide the shorter-term trader
with decent opportunities using the lesser timeframes, as was the case
yesterday.

This morning was one of those rare few times where the ETF market has traded for
a time without the assistance of the futures which remain closed as this column
goes to press, due to extended New York memorial ceremonies.

QQQÂ Â Â Â Â
WednesdayÂ September 11, 2002Â 11:30 A.M. ETÂ Â Â Â Â Â Â SPY