Flexibility Is The Key
The Qs indeed followed
through on yesterday’s 60-minute weakness divergence, although it was
unfortunate for Q traders that early retracement positioning was difficult, as
the NQs began their descent during the pre-market globex session. This left
traders either positioning for the typical retail fleecing at open for the
bounce or aligning themselves with the emerging downtrend on pullbacks, either
of which would have been successful for early profits. To put the morning in
perspective, I’ve adjusted today’s chart focus to reflect the pre-market session.
Thursday October
25, 2001Â 11:30 AM EDT
(1)
Approx. Equivalent QQQ Price
I’m currently
watching to see if we get trend reversals on the current shorter-term up-trends
that may serve as continuation short triggers on the 60-minute time frame,
keeping in mind, once again, that much of the anticipated move has already
played out.
The morning gap down reminded us why flexibility is key and why we should always
be thinking ahead with an alternative trading plan. While I had been focused on
trading 15-MA cross confirmations of the emerging divergence, as the bulk of the
early move occurred before the Qs began trading, adjustments were required. As I
said in my recent QQQ seminar, I am constantly only concerned with where we go
from here at any given moment, and if a significant expected move has already
occurred, we need to wait for the next bus…which may be the uptown route.
Good trading!