Oh, That 13-Minute Trend
The Qs are up $1.30 as we
approach midday, fueled in part by a
stronger-than-expected retail sales report. Absent a complete midday collapse,
the Qs are setting up for their first follow-through day since baseball season
started. All tech sectors are showing strength, with the top-ten tier one and
two Nasdaq 100 stocks all showing impressive green and the
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holding nicely above its 500 support at 536. My eye is currently fixed on the
13-minute trend support which is finally catching up with market price at
midday, and its staying power may provide clues as to the next move.
On
Friday at midday, I mentioned two things that would get me interested in a
bullish trading opportunity: price/momentum strength divergence on the daily
chart of the late week retracement, coupled with a turn of at least the
13-minute chart. Let’s go to the videotape, which shows the daily stochastic never
reacted to the price retracement, and Monday morning’s 13-minute turn indeed lit
the fuse.
Oh, that 13-minute
trend. Love it, respect it, and love it some more. Mix it with two other time
frames to provide perspective and triggers, add momentum and range indicators
along with a liquid market and a focused trader, and you have the core
ingredients for successful trading. Does this make trading easy? Never, and most
will continue to fail despite any method designed to skew probability because of
the head games. Yet, can it simplify what is all-too-often a business made
overly complex? Absolutely. Those who have been through the QQQ
School and Video
know what I’m talking about.
On a personal note, it’s hard to believe that we’re approaching the first full
year of Q columns here. In fact, it was about this time last year when Larry
Connors first approached me about contributing to TradingMarkets, at which point,
I initially and respectfully declined because I wasn’t sure I could do justice
to providing high-quality content for a site which I highly respected
(interestingly enough, TM was at that time my sole trading subscription service)
without adversely affecting my trading and teaching efforts which remain
important to me. I’m sure you can imagine
the effort required for a trader to prepare and author a meaningful midday column
every day of the year. I was also skeptical of the “those who can’t do,
teach, write or sell” syndrome which plagues this industry in certain
corners.
Yet after personally reconciling potential conflicting perceptions, along with
balancing responsibilities at this end, I accepted the challenge largely because
I thought I might be able to offer a different twist on a business about which I
care deeply, and hopefully make a small difference in the lives of traders —
many of whom have been significantly hurt or destroyed financially by the myths
and pied pipers of the late 1990s. And while I don’t offer that magical black
box (because, of course, it doesn’t exist) and will go to my grave someday
knowing the vast majority who try this business fail (because I too have lived
through the pain), I hope and pray that I’ve been able to make that small
difference for some, although I recognize time and a greater Power will
ultimately judge the effectiveness (or lack thereof) of any contributions.
Lastly, Gary
Kaltbaum’s column yesterday stirred feelings deep within me. My personal
reaction to his current situation was to remind myself (1) of life’s priorities
that puts God and family far above this business we call trading, (2) that money
— whether it be from trading or other aspects of the industry — is not the
end-game of this business, and (3) that any income we’re blessed with is only as
good as its ethical source and ultimate use. As I said at TM2001, faith in God
and my family’s faith in me have gotten me through my darkest hours and toughest
times as a person and as a trader, and there is a direct correlation
between my spiritual state and trading performance. And for those who may think
talking spiritually in a trading column may be politically incorrect, politics
frankly means little to me when it comes down to something that means more to me
than you can ever imagine. Gary just gave me a good reminder.
Good Trading!