Stubbornness Is A Fine Line
One of the intriguing
aspects about this business is the requirement to trade both with and
without bias, "with" meaning acting on indicators that are essentially
statistically biased toward the market moving in one direction vs. another, and
"without" meaning reacting to what is happening vs. reacting to what
one expects to happen and avoiding crossing the fine line to stubbornness. I
must say I awoke early this morning to the deafening drumbeats of Nasdaq
"bottom-calling" given how the market ended virtually flat last week
on an onslaught of negative earnings releases, which put me immediately into my
overly cautious mode early in today’s session. (Some tell me my overly
cautious trading stance reflects a lingering imprint of the ’86 World Series
where the Shea scoreboard briefly flashed "Congratulations to the 1986
World Champion Boston Red Sox" when the Sox were two strikes away from
shaking the curse.)
Yet longer-term perspectives are indeed important for the intraday trader as
we try to position for short-term profit opportunities. As I’ve said before, one
certainly needs to know the weather and fire danger conditions when chopping
trees for a living. It’s just that I trust the charts as providing a better
barometer reading than simply Uncle Ray’s knee acting up. In my view, early
clues to sustainable climbs will include successful
testing of the Q’s 60-minute 15-MA which
was established last week.
As far as today’s action goes, while the early optimism waned a bit shortly
after open as the NQs moved under the 1700 level and the three-minute 15-MA
broke to the downside providing a couple of nice scalp entry opportunities on
the cross and subsequent pullback, we’ve thus far held the 60-minute 15-MA which
again is key in any longer-term move to the upside.
As I wrap this, I notice a nice
three-minute 15-MA strengthening, which is a prerequisite for any testing of
this morning’s early highs.
Good Trading.
For
a more in-depth look at how Don trades the QQQs, click here.