Digestion
The Qs are in consolidation
mode this morning as the market digests
yesterday’s late-day tank (more on that below). We’re at an interesting point as
we approach mid-day as the key 13-minute 15-MA — essentially the one-minute 200-period
MA — is getting a test as to the strength of its resistance amidst tight
Bollinger Bands and an hourly downtrend. As with any trend in progress,
respecting supports until violated remains the low-risk ticket, which would have
worked well yesterday. On the larger picture, the Qs remain in an uptrend on the
daily and weekly charts, although they’ve been range-bound over much of the last
few weeks which has required highly effective use of stochastics for any
multiple-day swings.
Thursday January
10, 2002Â 12:00 PM EDT
Yesterday’s strong
volume and market pace provided an abundance of trading opportunities. Last we
left off, we were looking for initial support on a nicely angled 13-minute
support which, indeed, produced a nice Q bounce good for up to $0.40. Then, as
the afternoon began to play out, the Qs handed us another one of my favorite
combinations of weakening stochastic divergence followed by several breakdown
triggers, including a beauty of a 3-minute cross in the direction of the
emerging 13-minute downtrend. The market even obliged with a nice 15-MA trailing
stop which would have helped you hold a portion of your trade on the plummet.
Could anyone have predicted the extent of the decline? Of course not. Did rumors
accelerate the decline? Perhaps, but it doesn’t really matter as the signs of
potential weakness were abundant, and we’ll take triggers first and ask
questions later. And if you continue to put your line in where you know the fish
typically bite, you never know when a school of fish will be looking for lunch.
Let’s pick up where we left off yesterday and recap the afternoon:
The best part about
doing the QQQ
video has been sitting down at the end of the day and reading e-mails and
seeing results from those pulling the trigger (By
the way, try shorting a stock on yesterday’s confirmation trigger as it’s moving
down!), which continues to make all of the
work at this end extremely satisfying.
“Watching and
learning from your videos … love that 3/15 cross on the 3-minute, below the
13/15 which was heading down. Only 2 trades today, both shorts, made almost a
grand, my best day yet trading the Q’s.” E.T.
“Thanks Don. Prior to your video, I had been getting terrible fills or not
getting filled at all on the Qs using my broker’s auto routing. I can’t wait to
watch it again to see some of the things I missed the first time around.”Â
D.M.
“Hello Don. I bought your video course on trading the QQQ and have just
finished watching it. I found the course very informative.” R.S.
(Keep up the) Good
Trading!