Don’t Fight The Tape
The
bulls are reluctant to give up the fight despite the lowest showing
for Leading Indicators since 1995. Don’t fight the tape. Although
longer-term traders are probably scratching their heads (I am too, with my other
accounts) with regards to the strength.
The fact remains that the
markets had a very strong close yesterday, with the S&P and Nasdaq futures
closing above their 20-day moving averages, in fact both indices are within
striking distance of their 50-day moving averages. Technically
very impressive.
Intraday however, the moves were still
relatively tame. The move up was more of a slow grind as opposed to violent
swings. This forced many intraday traders like myself, to reduce share size and
hold on a bit longer in order to capture moves. If you refer to a 1-minute
S&P chart, you will notice the moves were less than the minimum requirement
of 3-5 points. "Scalping" those moves was an act in futility. By
taking your cues from the 5-minute chart and using the KTN’s
provided in yesterday’s
column, you fared much better. (Note: Two of the KTN’s
in the chart, 1079 and 1084.9, were pointed out in TradersWire
since they were derived after the opening.) Adaptation is the key to
longevity.
Looking ahead, the market will be
"choppy" until a clear trend can be established away from the 20- and
50-day averages. Trade selectively so that when the market makes its move, not
only will you have a clear perspective, but won’t be frustrated by being chopped
up in the meantime.
Key
Technical Numbers
S&Ps |
Nasdaq |
1117.45 | 1437 |
1109.5 | 1426-28 |
1101.50-1102.46 (confluence) |
1404 |
1094 | 1392 |
1091 | 1371 |
1086.5 | 1355 |
1081 (significant number yesterday) |
1327-29 (major confluence) |
1077 (20-day moving average) |
1302 |
1067 |
As always, feel free to send me your
comments and questions.