Questionable Momentum
The Qs are lower on the
day on modest volume as we approach midday. I’ve been focused in on
the 13-minute and hourly charts for much of the morning, with the 13-minute
providing a nice backdrop for a pullback short and the hourly providing some
price vs. momentum strength divergence on the continuation to guide the trade
and set an interesting backdrop for longer-term reversal potential.
Yet, as is the case with any such divergence, as
I discuss in the QQQ
School and Video,
such a divergence on the hourly is merely a heads-up, as the chart trend
remains down. Trend changes on the three-, 13-, and ultimately the hourly will
be required if it’s to mean anything other than a pause in the context of a
continuing downtrend. However, given the post-holiday and summer-like trade
pace, it does call into question the momentum of the early decline, and the
lesser time frames should help guide the next move.
Wednesday May 29,
2002 12:00 P.M. ET
Good Trading!