Take A Look At This Textbook Trigger
The major markets are pausing
this morning after another fierce overnight Globex trade
that continued to painfully squeeze those short the
market and ignoring our key trend signals. Yet since no market runs forever, the
overstretched bungee snapped back hard this morning — with much of the action
occurring prior to the normal session opening — and ES is current trading more
than 10 points off its Globex high in a range-bound trade.
For those awake in the early hours, the textbook trigger of a three-minute turn
shortly after 8:00 am ET, complete with a pullback as highlighted below,
provided the low risk entry trigger. Such action continues to reinforce my
unwavering belief that less is more and simplicity is best when it comes to
making some sense out of a chaotic market. Simple? From a technical analysis
perspective, most definitely. Too simple? Heck no, especially in an industry
known to complicate things often to sell expensive products and services.
Easy? Never, as order entry ability and personal psychology dominate the trade
actions of many traders. By personal psychology, I’m largely referring to
confidence or the lack thereof. And if these silly charts do nothing but help
you visualize the trade outcome before it occurs — much like most successful
athletes visualize the sinking of a putt or the making of a shot before
executing — then we’ll have done some good.
As I’ve said before, I’ll try like the dickens to avoid the “I told you so, I
told you so, I told you so” route that I still see ad infinitum in this
industry where egos prevail (where are those folks when something doesn’t work
out????), as it’s the patterns that do the work. And by burning the patterns and
expected outcomes (on a probability basis) into one’s mind, one can learn to
visualize and recognize anticipated outcomes before the trade is executed, much
like a successful athlete. Otherwise, the shots will continue to slice or hook
whether or not you use state-of-the-art titanium shafts or a simple 20-year old
wedge. I continue to prefer and encourage the latter.
ES (S&P)Â Â Â Â Â
Tuesday March 18, 2003 11:00 AM ET       NQ
(Nasdaq)
Moving Avg Legend:
5MA
15MA 60-Min 15MA
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