Still Trying To Prove It
A couple of tempting
ticks above Tuesday’s high weren’t quite enough to propel the Qs out
of its longer-term "prove it to me" mode as we’ve settled into a slow
drifting retracement from early highs with such a pace that it would lose a race
against Heinz. While we cleared several intraday resistance points late
yesterday (see below), longer-term resistance levels remain in place, including
the current 1650-60 NQ lid which equates to about 41.00 on the Qs. Patience has
definitely been the intraday theme thus far, and I’ll be looking for breaks in
the tightening three-minute range for clues as to where we go from here, as well
as reaction off any approach to the 13-minute 15-MA, which is an interim lid.
Current intraday support on the Qs is 40.00, which was also key on the final
climb yesterday as noted in the discussion below.
Thursday
July 26, 2001 11:50 AM EDT
(1)
Approx. Equivalent QQQ Price
Let’s Play Two
Those in the TradersWire forum yesterday were treated to live walkthroughs of two
Q cup and handles as we climbed out of yesterday’s intraday abyss. Both
formations, first on the three-minute chart and then on the 13-minute chart,
came on the heels of a clear 60-minute price and stochastic divergence between
Tuesday’s low and yesterday’s low. As with any divergence, confirmation via a
trend change on a lesser time frame is preferred to increase the probability of
a turn, and the 3-minute MA was cross the first clue. In both the three- and
13-minute formations, the handle bases happened to coincide with none other than
approaches to each chart’s 15-MA. (Still
wondering why I use 15-MAs?) I’ll let
the charts do the rest of the talking which should be deafening.
(1)
Approx. Equivalent QQQ Price
As I said in TW
yesterday, of all the charts and studies I use, the three- and 13-minute 15-MAs
have earned my greatest respect over the years. Their dual role of defending
existing trends as well as signaling potential changes in tides can be a helpful
addition to any trader’s toolbox.
Good Trading.
For
a more in-depth look at how Don trades the QQQs, click here.