I Have No Clue Why So Many People Do This…

Both major markets are in
13-Minute downtrends as we go to press, with the hourly continuing to struggle
with establishing any base north of support. 
pullbacks on the 13 using a one- or three-minute trend reversal trigger were the
high-probability trades of the morning, with an overbought hourly stochastic
(which was missing yesterday … more on that below) providing additional wind at
the back of pullback short entries. The chart bias heading into the afternoon
remains bearish so long as we remain south of 13- and 60-minute supports as
traders await any news out of Day Two of the FOMC meeting.

We discussed

the difficult reward/risk ratio of using Tuesday’s emerging midday
13-minute break as an hourly downtrend continuation trigger given the
longer-term oversold market. Indeed, after two brief probes below 13-minute
support, ES reversed and ultimately ended 12 points higher than our column
chart. Such is why — despite a potential trend-continuation trigger on one of
our primary time frames — it’s critical to combine charts of multiple time
frames AND use oscillators to guide in making higher probability trading
decisions. I still have no clue why so many use solely one chart of one time
frame or with no regard to oscillators, which to me is similar to skating on a
frozen pond without knowing the temperature.

ES (S&P)       
Wednesday  January 29,
2003  11:00 A.M. ET           

Moving Avg Legend:   
60-Min 15MA

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Good Trading!

Don Miller