Range And Volatility Follow-Through
difference a day makes. Yesterday’s price action brought many
players back into the market, although the afternoon session was a bit muted
as prices basically were range-bound before grinding and hovering near the
highs. The chart below will show how the morning session provided for many
more 3-5 point moves than did the afternoon. Those who traded sparingly, if at
all, in the afternoon held on to their morning gains. (Please note: I make the
previous comment from the perspective of a “scalper” only.)
Â
as traders, especially daytraders, there are no rules dictating that you need
to be busy on the keyboard throughout the day. The strong work ethic which most
traders possess allows one to believe that you must be busy to be productive.
However, many times the opposite is true. For some, it takes a while to get
comfortable with that concept.
Â
frustrated yesterday afternoon, as he continued to buy every potential
breakout of the range of 1078-79, only to end up chewing up commissions. The
smart thing to do is to simply wait for the range to be broken and then buy
the next pullback. Daytraders are an opportune bunch by most standards. Wait
for the odds to be in your favor…then strike.
This morning should offer some
follow through with regards to range and volatility. The Jobless
Claims number came in better than expected, but only had a slight
impact to the upside. As of 5:30 AM PST, the market is up just above
yesterday’s high. It should be interesting this morning. Chain
Store Sales are also due out today and may have an impact.
Despite my thoughts (intermediate-term)
on retail and bank stocks, it appears as though the market differs with my
opinion, as the daily charts appear to be ready for me to cover and
re-evaluate (many of these stocks are on the verge of breaking above key
moving averages). Do I think the market is wrong? Absolutely, but a good
trader/investor needs to have their stop loss in place and abide by it. This
strategy will always allow you re-enter the trade when it appears as though
your scenario is about to play out. Remember, you don’t need to be a hero.
Key
Technical Numbers
| S&Ps |
 Nasdaq |
| 1121 | Â 1399 |
| 1108-09 (confluence) |
 1363 |
| 1104 | Â 1355 |
| 1096 | 1338 |
| 1084 | Â 1313.5 |
| 1079 | 1289 |
| 1074.4 | 1280 |
| 1062 | 1262-64 (confluence) |
| 1048-50 (major confluence) |
1245 |
| Â | 1227 |
As always, feel free to send me your
comments and questions. See you in TradersWire.