Something For Everyone
There
was something for everyone
yesterday — tape readers, technicians, bulls and bears. What has to
go down as one of the more memorable sessions in recent weeks, the market went
to the brink in terms of support only to be rescued by one solid rally. As
a daytrader (HVT), there were many
opportunities, selling short the rallies throughout the morning and buying the
dips all afternoon. It is interesting to note that some of the best trading
occurred during the normally “dull” 11:30 a.m. – 2:00 p.m. ET. As a result, I
traded bell to bell.
So where was the action from an
HVT perspective? Mainly in the big story
stocks of late, IBM
(
IBM |
Quote |
Chart |
News |
PowerRating),
Tyco
(
TYC |
Quote |
Chart |
News |
PowerRating) and what would a party be
without the poster children for speculation, Texas
Instruments
(
TXN |
Quote |
Chart |
News |
PowerRating) and Micron Technology
(
MU |
Quote |
Chart |
News |
PowerRating)? Take your pick, there was plenty to have kept you busy and
profitable. Look at the one-minute charts of these stocks yesterday, there were
setups all over the place. (Refer back to some of my
earlier lessons to get an idea of what I refer to as a setup.)
Given the extreme range of yesterday’s
session, there were also some opportunities on longer time frames as well. But
more importantly, opportunities to cover recent shorts. If you ignored the
warning signs, those shorts established only a few days ago are probably back to
even or under water. Stocks that I had profiled as good shorts were:
Intel
(
INTC |
Quote |
Chart |
News |
PowerRating),
Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) and Bank of America
(
BAC |
Quote |
Chart |
News |
PowerRating).
The chart below of the S&Ps will
show you why it was reasonable to cover those positions. Given my approach of
sticking with the trend, I did not “flip” these positions and go long. While it
would have been quite profitable in hindsight, I always stick to my rules and
keep the probabilities in my favor. Trade with the
trend. At that time, the trend
was still clearly down on the 60-minute charts as noted by the moving average.
There is no question
that this market will remain volatile until some clear trend can be
established. Today may very well have been a short squeeze. Who knows and
frankly who cares? Trade what you see. As a result, despite my wanting to
hang on to some nice short positions I have in other accounts, the market is
just too indecisive to be stubborn. Take what the market gives you until a trend
can be established.
Keep an eye on the
1099-1106 level in the S&P futures, referring back to the chart on 2/15. It is
possible that that gap will be filled. If that gap is filled, the S&Ps will then
need to break 1109 and 1122 in order to establish some sort of up-trend. It
should be interesting and will offer nimble traders many opportunities.
Key
Technical Numbers: (futures)
|
|
|
|
1139.4 |
1476 |
| 1130 | 1462 |
| 1119-22 (confluence) | 1447-52 |
| 1108-10 (confluence) | 1430 |
| 1096 (opening only) | 1425 (critical resistance) |
| 1090-92 | 1412 |
| 1081 | 1405 (opening only) |
| 1073.8 (key) | 1380 |
| 1061 (critical support) |
1365 (critical support / yesterday’s low) |
| 1055 | 1330-34 |
| 1037 (critical support) |
As always, feel free
to send me your comments and questions. See you in
TradersWire.