Some Nice Oscillations
The Qs have been doing some major
testing of last week’s highs this morning, as
well as the strength of the recent two-month run. We’ve had some nice
oscillations for a Monday morning, including a mid-morning pullback toward
hourly support that provided both long and short intraday traders with
opportunity.
Given the longer-term overbought condition (which, yes, can
certainly become more overbought), I’m currently continuing to pay a great deal
of attention to longer term charts, most notably the hourly and daily
timeframes, to spot emerging divergences as well as reducing share size on
intraday long triggers. Friday’s climb on extremely low volume
was reflected in an early flat reading on the daily stochastic which helped
provide a backdrop for the early morning drop, yet we must continue to respect
the current uptrends until violated.
Monday,
November 26, 2001 12:20 p.m. EDT
I
had an interesting discussion with a trader the other day on my use of the term
“downtrend support” — rather than the more traditional term
“resistance” — when describing the 15-MA of a downtrending market. He
mentioned that such a juxtaposition required some mental gymnastics on his part,
at which point I nodded and indicated that is precisely my intent. The simple
reason for the semantic distinction is to subconsciously remind folks who may
think solely in “long” terms that downtrends are indeed as tradable
and have their respective supports.
Good trading!