Guess Who’s Coming To Breakfast?

March 20, 2001
Kevin Haggerty

The reason, whether it was
a combination of some short-covering, programs and/or bottom-fishing in the
extremely oversold condition prior to Greenspan doesn’t matter for the daytrader
because it adds up to another excellent day.

I had numerous emails from
many of you who played some of the many Slim Jims that exploded in the
afternoon. The luck part is the extent of the move but you don’t get the luck
without being there. This is a daytrader’s market and the percentage moves, long
and short, on a daily basis are much more significant than those of the major
averages or indexes and you get to go home flat.

The volume picked up
significantly yesterday afternoon as the Greenspan move hit high gear. Overall
volume was 1.1 billion shares with a volume ratio of 78 and advancers over
decliners by +857. The up volume of 870 million was the most since Jan. 3 and
Jan. 4 of this year, which was new money being invested.

I have included the
five-minute chart from yesterday
for Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating) which highlights three different entry patterns in one
day. In yesterday’s text, I highlighted QCOM for a closing-range entry at 50
5/8. You got a trade-through entry there with thrust and volume, as you can see
on the chart. After the thrust,
QCOM went sideways as volatility contracted and it formed a long, narrow
Symmetrical Triangle. This is
often the case after thrust moves.Â

Your second trade
opportunity was the breakout of this triangle pattern at 51.5 on the 1:45 p.m.
bar.Â This breakout took it
above all of its 8-, 20-, 60- and 260-EMAs. Right
after the breakout, it formed a thirteen-bar Slim Jim with entry at 52 and
exploded out of that at 2:00 p.m., trading up to 59 5/8 with no
pullback along the way and on significant volume.Â

If you had it on your
screen, you couldn’t have missed it. And if not, that’s just your trading plan
deficiency, so tighten it up.

Five-minute chart of
Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating)

with 8-period EMA, 20-period
EMA, 60-period EMA, and 260-period
EMAs

1.
Breakout of closing range

2. First consolidation breakout to new intraday highs

3. Slim Jim breakout

(June
Futures)

Fair Value

Buy

Sell

11.70

.13.00

10.00

Pattern
Setups

It will be a reaction day
on the intraday charts, unless you decide to sit naked in front of the Fed move
— probably not the wisest decision.

Have
a good trading day.

Guess Who’s Coming To Breakfast?

BUY THE FEAR, SELL THE GREED

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