I’ve Fallen, And I Can’t Get Up
Remember the old “I’ve
fallen, and I can’t get up commercial”? Such
a description would aptly describe today’s early action, as the Qs haven’t been
able to get out of the way of its own 13-minute downtrend shadow. As this column
goes to press, the Nasdaq futures have broken critical 1500 life support
(approx. $37.25 on the Qs), which also marks the approximate point of last
week’s lows. Volatility within the context of the downtrend has been strong,
which has provided for outstanding tradable oscillations in the morning session
on both the long and short sides.
Wednesday January
30, 2002Â 12:00 PM EDT
As is typically the
case when trends begin to reach extremes, we can begin to shift our attention
toward signs for potential exhaustion and reversals in the context of
divergences and trend changes while
respecting the existing trends until they
occur. While the trend can indeed be your friend, trends, of course, do reverse
— often severely — and the effort extended in finding them can be well worth
its weight in income. To that point — and continuing the discussion I began in Monday’s
column, which is quickly becoming a more serious issue than my initial
“ideal setup wish” — keeping an eye on the daily chart to measure the
true market weakness on this drop, coupled with any trend changes on the key
13-minute and subsequently hourly time frames, may help gauge whether or not the
patient begins to breathe again.
Good Trading!