Slow Chop
Slow chop and extremely
tight trading ranges have been the early themes of the day, as the Qs
have been toying with Friday’s 13- and 60-minute supports for much of the
morning. Volume has been light with very little sustained follow through on
attempted range breaks. With respect to the larger picture, we continue to test
weekly resistance in the context of a daily up-trend, so some chop is not
totally unexpected as the market digests recent moves. It will take a break of
the current range with some volume to get me interested at this point.
(1)
Approx. Equivalent QQQ Price
You’ll notice a few
minor adjustments to the charts above in terms of the addition of the 15-MA
support/resistance level of the next larger time frame on the three- and
13-minute charts. The formula for doing so is very straightforward: Multiply 15
periods x the next larger time frame (i.e. 13 minutes if working with the
three-minute chart) and divide that by the time frame of the current chart (i.e.
three minutes) to determine the appropriate equivalent period — in this case
65. While I prefer to keep my charts uncluttered, adding support or
resistance of the next larger time frame as defined by its 15-MA may lessen
ping-pong-like neck strain when scanning your charts and keep you from taking
crosses when it’s simply a sucker move into a brick wall.
Good trading!