Focus On The Possibilities
The Qs and SPYs, along with their
E-Mini counterparts, are continuing their hourly and 13-minute downtrends from
Friday despite the morning gap up and
some initial price probing of the 13-minute downtrend support. Given the 13 and
60 backdrops, the three-minute trigger and guide has worked well on early shorts
with the main challenge being market pace on this summer Monday, which has me
leaning toward quick profits and trail adjustments. Using a football analogy,
the pace and volume essentially have me thinking more along the lines of
exhibition season to keep one’s head in the market as we gear up for the new
fall season, meaning light lots and not pressing much.
Longer term, as I mentioned in my last few columns I felt a break on the hourly
chart was key to establishing shorts off the strong weekly resistance which
triggered on Friday. If you were looking for it during my absence (more on that
below) and got chopped up a bit mid-week last week, note the level of the hourly
stochastics during each trend break attempt. The higher the stochastic reading,
the better your probability which is why I continue to look to ALL three key
indicators — trend, strength, and range — to guide my recommended
approach. The emerging post-trigger hourly trend support angle continues to be
wind at the shorts’ back, and given the approach toward daily support
(resistance on shorts) I’d be inclined to pare out and lower stops.
QQQÂ Â Â Â Â
Monday August 26, 2002 11:40 A.M. ET      SPY
Moving Avg Legend:
5MA
15MA 60-Min 15MA
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It Isn’t Fair
Like trading, life often isn’t fair. In the case of trading, such “unfairness”
may appear in terms of clear market opportunities accompanied by trader
distractions, hesitation, or self-sabotage where well-intended entries are
missed or otherwise bungled. Or it could be a great setup taken followed by a
catastrophic company or world event where even the best-intended stop is of
little help. As they say, “stuff happens” (we’ll keep it to the “G” rated
version here), and those who go into this business knowing that both will occur
from time to time will likely be better equipped to handle them and move on to
the next trade, day, or month with a clear head looking toward the future.
In terms of life, the unfairness can arise when you see the eyes of a previously
healthy ten-year old child suddenly brought to her knees by a condition that
will affect her for the rest of her life. Some of you know that right after last
Monday’s column went out, we learned that our daughter was diagnosed with
juvenile diabetes which required an immediate ‘drop everything’ trip to
Children’s Hospital in Boston where we spent the bulk of last week. Words will
never be able to describe the experience as we and other families learned about
the incurable condition and how to begin a lifelong journey of monitoring and
needles that will forever change our lives. Frankly, it stinks and isn’t fair.Â
Not just for our child and this condition, but for every kid afflicted with
anything. Hit us adults with your best shot, that’s fine … but not our kids.
But life goes on. Last year, Derek Lowe of the Boston Red Sox had the worst
year of his professional life. After having been one of the top relievers in
baseball the prior year, Lowe couldn’t get an out in 2001 if his life depended
on it. And the slump wasn’t just for a few games or a week or a month … it
lasted virtually an entire year. It got so bad that he got booed every
time he warmed up, and as close as the Fenway stands are to the field and
bullpen, Derek said it was like wearing blaring headphones. He knew what he had
to do, but he just couldn’t produce. He also couldn’t eat or sleep for weeks at
a time. Where is he today? Mr. Lowe decided to pick himself up by his
bootstraps, changed his approach, put the past behind him despite the hundreds
of thousands of critics, and is now the leading candidate for this year’s Cy
Young award at 17-5 with a 2.19 ERA.
My point, while likely obvious and definitely somewhat self-directed under the
circumstances, is to ignore the past as well as current disabilities and focus
on the possibilities. While life far outweighs the importance of trading, both
continue to share startling similarities. Conquer one and your chances of
excelling in the other greatly increase. We’ve shed quite a few tears over the
past week, and now it’s time to move ahead to what I believe is an incredible
future.
Good Trading.
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