Getting An Education
There can be no better lesson
on "retail fleecing" than what
happened this morning on pre-market news that Cisco
(
CSCO |
Quote |
Chart |
News |
PowerRating) had
inadvertently leaked certain performance data to its employees prior to this
afternoon’s scheduled earnings release. Today’s open ranks up there with the
all-time gap and traps as the illiquid Globex session drove the Qs right up to
hourly resistance which was still showing a strong trend support angle, and in
the process, provided a low-risk trend-continuation entry opportunity with the
break of the lesser period 15-MAs.
The Qs are trading sub-36 as we approach midday, volatility has been pervasive
through much of the early trade, and it doesn’t take a whole lot to note that
we’re extremely oversold as one looks to stochastics, Fibonacci retracement
levels and surging volatility indices. This basically puts me in a mode of
looking for clues to detect when (not if) the next substantial tradable reversal
will occur. What will it take? For starters, a hold of critical intraday support
on the three-minute time frame, followed by a hold of the key 13-minute support.
(Keep in mind that the 15-MA on the three-minute chart is comparable to the
50-period which many follow, and the 13-minute support is analogous to the 200-period.)
A flattening hourly downtrend support would also help provide less of an
obstacle to any longs that have recently been limited to contra-trend scalps. In
the meantime, respecting current trends will help keep you on the right side of
the trade.
Wednesday February
6, 2002 12:00 PM EDT
Keep in mind that
CSCO’s "official" earnings release is scheduled for after the close
which may provide for continued volatility in the afternoon trade.
Good Trading.