Reaction May Hold Clues

• August 13, 2002
• Don Miller

Call it lucky 13 in that the
closing 13-minute trend from yesterday has been a picture-perfect guide
for the morning trade, despite the relatively
narrow range and poor pace.  Trading the mini-rallies long into early trade
resistance or short off the downtrend pullbacks have both provided profitable
opportunities, and both the SPYs and Qs are toying with trend reversals as we
approach midday.  Taking early short profits rather quickly has been wise in
light of the test of daily uptrend support, especially on the SPYs, as we await
the post-FOMC settling-down period.

QQQ
Wednesday
August 14, 2002 12:20 P.M. ET SPY

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

See
School and

Video for Setups and Methodologies

The markets are on the upside
and testing recent daily highs as we approach midday
and await the afternoon FOMC announcement. Both the Qs and SPYs are in 13-minute
uptrends after having reversed their opening gaps down, with the SPYs continuing
to show strength on the daily and hourly time frames. In fact, you’d have to go
to weekly and monthly charts to find the SPY downtrends and reaction to today’s
FOMC announcement may hold clues as to whether we’ll begin a retracement off
weekly downtrend support (resistance on longs). The Qs are trying to assert
themselves into a daily uptrend, and similarly, the next few days may be key in
gauging further strength.

Trade pace and volume have been light ahead of Greenie-time, which was to be
expected.

QQQ
Tuesday August 13, 2002
12:20 P.M. ET
SPY

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

See
School and

Video for Setups and Methodologies

Good Trading!

Don Miller