Simply Wow
Wow. Simply wow. No,
I’m not talking about this weekend’s spread (OK,
please humor me as I only have three more days before the predicted pasting).
I’m describing reaction to yesterday’s volatile intraday QQQ trading potential
which provided more high-probability opportunities than I can remember in a long
time, one of which we began teeing up in Monday’s
column that rapidly transformed from a desired setup to concrete reality
before our eyes. So before we get to today’s morning action, let’s recap a
bounty of setups which played out to perfection yesterday on multiple time
frames, starting with the move we began setting up on Monday.
Even the
nano-scalpers trading the one-minute time frame had several similar setups which
quickly become too numerous to count, and I counted at least five cup-and-handle
breakouts on multiple time frames, including those which you can see in the
above three- and 13-minute charts, which further aided trading the reversal.
Such action again reinforces the all-to-obvious, yet seldom-discussed point that
trends always
reverse, there are
heads-up signals and low-risk
entries, and as I mentioned yesterday,
the income potential can indeed be worth the effort in seeking them. This is why
these setups rank among my top QQQ setups discussed in my
video and which I’ll be reinforcing with state-of-the art technology in the
upcoming educational expansion.
Frankly, and at the risk of
preaching, Wednesday’s setups had monthly and multi-month income potential, of
which, many traders took advantage, and I tip my hat to you. Unfortunately, I
also know of many traders who were heavily green on short positions who ended up
flat or at a loss because they refused to close out positions because they
"believed" the FOMC’s inaction, SFO episode, accounting scandal
environment, or perceived high P/Es would lead to a further decline when the
charts were indicating a high-probability
of an intermediate-term reversal. (Again, this isn’t about anyone
making a prediction, since no one can tell the future as I discussed in my last
lesson on probability. Yet the probability simply doesn’t get any higher
than this.)
Yesterday’s action also showed how imperative planning is in this business. Like
a chess game, this setup began developing four days ago, and if you had just
"showed up" for yesterday’s trade, you likely wouldn’t have been
adequately prepared.
Shifting to today’s early action, the Qs are off their early highs and range-bound
just north of key hourly support as we approach midday which is cause for a bit
of an intraday waiting game as we await a break of the current logjam. Despite
yesterday’s move, we remain in a daily downtrend until violated which is
providing a lid of sorts until penetrated. Keeping an eye on 13-minute
stochastics as supports are tested may provide a clue as to the next move.
Thursday January
31, 2002 12:00PM ET
And while I’m at it,
Pats by three…and I’ll accept all good-natured ribbing come Monday.
Good Trading!