Keeping A Tight Leash
Two words to describe
the Q open on this July Friday: thin and slow. When I see early $.05
Island spreads on the Qs, I do more arm folding than trading as there’s little
room for error and one can get whipsawed very easily. The spreads have since
tightened and we did gain some footing on a three-minute "Landryesque"
bow tie cross which quickly resulted in a wrestling match between three-minute
15-MA support and 13-minute 15-MA resistance, with the 13-minute getting points
for the first slam. Until we can clear the 13-minute intraday wall established
yesterday (see below), I continue to have a tight leash on longs. Look for the
three-vs-13 match to continue with continued respect for the elder statesman
until proven otherwise. I’ll be looking for any stochastic strengthening on
further 13-minute declines for early clues as to a potential longer-term
reversal to the upside.
For those in the TradersWire
forum yesterday, I alerted the group to one of my favorite setups which was a
potential market turn upon weakening 13-minute stochastics and a three-minute
5/15-MA cross in the direction of the weakness. Once we watched the cross occur,
the market moved fairly predictably to its 13-minute 15 MA, at which point the
trade could have been partialed out for an immediate $0.25-$0.30 Q gain. The
market then provided us with a nice bonus once the test of the 13-minute 15 MA
failed, and we had a nice trailing-stop visual on the rest of the trade courtesy
of both the three- and 13-minute 15 MAs. Just follow the numbers:
Thursday July 19,
2001
I continue to appreciate and am
overwhelmed by the positive feedback and questions the Q columns have generated.
Please be assured that I do read and respond to every e-mail, although it may
sometimes take a day or two because of my own trading responsibilities and the
extent of current reader interest. I also look forward to meeting many of you at
TM2001. Please note that we’ll be kicking off the weekend festivities on Friday
afternoon, so plan your travel accordingly! We also have a few surprises
planned, so stay tuned.
Have a great weekend!
For
a more in-depth look at how Don trades the QQQs, click here.