Multiple Textbook Opportunities

  • August 2, 2002
  • Don Miller

It’s Friday, so as usual I’ve
got a lot to say both before and after the charts so let’s get right to it. 
At the risk of sounding like a broken record,
our charts and setups continue to provide multiple textbook opportunities on
both the Qs and SPYs. Yesterday was a classic afternoon as the Qs were guided
nicely by its 13-minute trend and the SPYs superbly by the 60-minute trend, the
difference in trend timeframes reflecting the weaker tech market. In fact the
SPY afternoon setups and chart as noted below look so good, they almost look phony — specifically double 3 AND 13 minute divergence at 15:20
COINCIDING with an hourly trend brick-wall ON TOP OF an overbought
daily chart in a downtrend.

Many of you know that I never use the term “easy” to define this business,
because it’s not and most folks fail miserably. Yet setups frankly don’t get any
better than this and
school students should have nailed the entries, as many did. As Kevin
Haggerty has said, with which I totally agree, if you didn’t take them then
there’s something psychologically getting in the way — and in my view, success
in this business largely comes down to what goes on between the ears.

With respect to today’s action, both markets are hovering near the lows for the
day and are putting in solid trend days. Staying on the right side of both the
13- and 3-minute charts will keep you on the right side.

QQQ         
Friday  August 2, 2002  1:00 P.M. ET           SPY

Moving Avg Legend:   
5MA 
 15MA   60-Min 15MA

See
School and

Video for Setups and Methodologies

You may have noticed
I’ve cut down on posting mail excerpts lately, and have done so for a couple of
reasons including time constraints at this end and a desire not to turn this
column into a “spin cycle” for the video and school. I do continue to respond to
every email personally and simply continue to be amazed, humbled and gratified
by the hundreds of traders that have gone through the video (back on TM’s best
seller list almost
ten months after its production .. we just can’t kill it) and school
who share their results, questions, and challenges with me. I’ve posted a few
recent notes below, the last of which almost knocked me of my chair.

One of the recent questions I got a kick out of reading lately is why I would
choose to share ideas as it might adversely affect my ability to execute fills,
etc. Two easy answers:

First, these are Exchange Traded Funds (ETFs)
folks!  Fills may be more of an issue in the futures market where it’s a
zero-sum game and competition is keen, but keep in mind one single futures tick
can trigger thousands of ETF shares and ETF transactions have zero impact on
market movement.  As I’ve said before, it’s great to write and teach about
trading ETFs which can be done totally clear of fill issues, conflicts of
interest such as manipulative impact, etc. 

Second, even in a truly competitive market such as the futures scene, any trader
worth his/her weight will welcome, rather than fear competition. Traders who
rely on the unwitting and unknowing to reap their profits won’t survive very
long.

Plus, I look at it this way — we’re in a dang tough business together as long
as we walk this earth, so we might as well help each other while we can. And if
that sounds a bit preachy or phony, well I do have an ulterior motive for
writing the column and providing the school material and simulations — it keeps
me focused and fresh which, in turn, helps my own trading.

Back to the School,
it’s currently undergoing even more enhancements as we work to incorporate SPY
content and simulations. We may need to rename it to reflect its far broader
appeal than simply the Qs (yes, the methods apply to any liquid market), and
expect to roll out the changes shortly.

Lastly, I’ll be presenting my next QQQ/SPY trading seminar at the Online Trading
Expo in Anaheim next Friday. If you plan on attending and would like to upgrade
to the School later to take advantage of the trading simulations, you can apply
the cost of the seminar to the school. If you can’t attend but just want to stop
by, I like M&Ms and caffeine-free Diet Coke. While it will be a short turnaround
trip for me (I missed the Red Sox visit by one week), I’d love to chat before
and after Friday’s seminar.

From the Recent Mailbag

Last weekend I listened to your tapes again and picked up many more
things. Now that I have more experience trading similar to your system I see
things that I didn’t really notice the 1st time through the tapes.  — A.C.

Thanks for your always useful columns. I trade on a longer time frame, since
most of my money is in retirement accounts. However, I have been able to make
use of many of your insights and methods, and I almost always use your work in
timing my trades during the day.  — S.F.

I would like to thank you from the bottom of my heart for your excellent
interactive online and video trading course. The use of the multiple time frame
analysis (especially on the same screen) has saved my pension plan hundreds of
thousands of dollars in the last month alone.  In addition to using your
methodology in daytrading successfully, I also used it on a longer time frame
(monthly, weekly, daily and 60 minute charts) and it works like a charm. I can
see the big picture, use the counter trend pullback at the Bollinger bands, see
the stochastics convergence/ divergence, the MA crossover, the support and
resistance and make a sound investment decisions.  Although the idea of multiple
time frames is well established, you have made it very easy to understand,
reproducible, teachable and practically applicable  more than any one else. I
highly recommend your course to all traders.  — A.M.

Good Trading and Have a Great Weekend!

Don Miller