Exciting As Dirt
The Qs are attempting to break
out of consolidation mode as we approach midday, hovering
in the upper third of its early range in the context of an hourly downtrend
(more on that below). Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating),
Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) and the SOX
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) have been key in leading the reversal off the early lows, and
I’ll continue to watch MSFT with a keen eye as I mentioned
yesterday. The Qs have broken through what had been 13-minute down trend
support on a price basis, yet much work remains if we have a trend turn on this
key period. Having said that, a potential cup on that time frame is in progress.
Keep in mind Greenie and crew are scheduled for this afternoon, and we have Cisco
(
CSCO |
Quote |
Chart |
News |
PowerRating) earnings after the close, the reaction to either potentially
speaking volumes as to whether we extend the climb out of the recent abyss. Both
the VXN.X and QQV.X are also off early spiked highs, which may bode well for the
bulls, the afternoon and evening news notwithstanding.
Tuesday May 7,
2002 12:00 P.M. ET
Exciting as Dirt
They’re a lagging indicator and aren’t as schnazzy as Fibonaccis or Elliott
Waves … in fact, they’re probably as exciting as dirt. Yet I’ll go to my grave
(hopefully a ways off) knowing that when combined with the other two legs of the
trading stool (range and momentum) and two other time frames, they can continue
to get the job done for those following these silly lines day in and day out.
For those shaking their heads in disbelief over yesterday’s end-of-day sell-a-thon,
the hourly angle continues to rule the roost, and the lesser time period
(13-minute) reversal to the downside would have been your trigger. Perhaps it’s
worth continuing to repeat yesterday’s comment until the tide turns:
On a longer term time
frame, the main challenge the Qs and underlying equities have in reversing hard
to the upside is the hourly trend and support angle, which remain down. Simply
put, the lesser time frames are going to have to show dramatically improved
trend support to get the current barge turned around, and I’m continuing to look
at long entries as short-term contra-trend trades only until the hourly picture
changes.
Using such a strategy complete with exits
and trails, as I mention in the QQQ
video and school,
will allow you to pick up the $0.10 – $0.40 moves while still being in position
to capture the larger turn when it happens.
From the QQQ School
Mailbag
"Congratulations on your great course! Your trade simulator is top
notch! Before, I traded according to various patterns, but I didn’t feel
confident. Now I concentrate on your patterns and the opening reversal from
Haggerty." A.K.
Good Trading!