How High Is High?
How high is high seems to be one of the more
pertinent questions of the day as the NQs briefly flirted with 1550 before
retracing to its current mid-day range. As we approach overbought conditions (before
I say anything more, please remember the Nasdaq was arguably overbought
on technicals at 4000 before the run to 5000),
I am strengthening my focus on three areas to try to get a heads-up on a
potential reversal: (1) Weakening stochastics on further market climbs, (2) a
break of major 13- and 60-minute 15-MA trend supports, and (3) stronger volume
on down moves. Until then, respecting the current trends should continue to keep
one out of trouble.
Wednesday November
7, 2001Â 12:00 PM EDT
(1)
Approx. Equivalent QQQ Price
One interesting
tidbit for those following ECN books has been the increasing number of bona fide
QQQ blocks appearing on the Island book prior to strong NQ moves. The last few
days have provided instances where 50K – 100K blocks placed on the bid or ask
were executed in the direction of the eventual surge. While I wouldn’t build a
strategy based on any single concept, such a pattern has certainly been worth
noting and may serve to supplement underlying signals and conditions.
Good trading!