Quiet Before The Storm?
All is quiet on the QQQ front
this morning as the world awaits word from the FOMC due
out at 2:15 p.m. ET. Yet the morning quiet could well reflect the quiet before
the storm in more ways than one. Specifically, the charts are telling us that Qs
are likely on the verge of a strong move, and I don’t just mean knee-jerk 2:15 –
3:00 p.m. shenanigans. Why? First, volatility has been noticeably absent in
terms of both tight trading ranges, along with volatility indices that are
almost under my screen. Second, I believe the daily and hourly charts are both
at a critical crossroads in terms of either continuing the current daily uptrend
bounce which began on Friday off a strong support angle, or stalling and
reversing — potentially significantly given the rampant complacency levels.
Normally, I’d be looking for the market to tip its hand this morning as to
continued uptrend strength, especially given yesterday’s opening gap fill and
less-than-stellar afternoon performance as defined by momentum indicators. Yet
this morning — and perhaps even the full day — has become an FOMC wild card,
and we may very well need to wait another day or so for the market to lay down
its cards. The 13-minute trend support (approx 200 MA) continues to serve as
immediate uptrend support with the hourly just below it and can be considered
for trailing stops on current longs and/or reversal triggers should they break.
Tuesday March 19,
2002Â 12:00 P.M. ET
In light of the
current longer-term market action, I’m less inclined to trade the FOMC chop than
I am to use it to attempt to define a longer-term move which again may become
clearer tomorrow or the next day.
From the QQQ
Trading School Mailbag:
“Hi
Don. I must say your course I received last Tuesday has certainly impacted my
top line already, and I have been trading for seven years — full time since
October, and plan to stay full time now after going through your course.
Many thanks, Don. You have added two layers
to my confidence.” G.B.
Good Trading!