The Blue Line Rules!
Despite
yesterday’s modest rally, the three major indices still are
indecisive to mildly bearish from a technical standpoint.
It is the same old story: The market goes from one side of key technical
numbers to the other.
In terms of trading,
I am beginning to see a pattern that is typical of summer trading.
All of my trades are taking place in the first hour and a half of
trading, usually anywhere from seven to 10 trades.
Mid-morning, as usual, is a non-event, and the afternoons offer maybe one
to two high-probability setups and take a little longer to play out than the
usual trade. Additionally, volume
on a five-minute time frame tapers off dramatically as the day wears on, adding
further difficulty to optimize entry and exit points.
Bottom line: Be selective and
don’t act on impulse. I suspect there will be some great trading as we roll
into September, so keep your powder dry.
Looking ahead to
today’s session most of the key numbers are probably already burned into your
brain or — at the very least — you can recite them in your sleep.
For those of you who are new to the column, or if you have forgotten
them, here they are:
| S&Ps: (futures) Nasdaq: (futures) |
|
| 1200 |
1670 (40% off April — May high/low) |
| 1192 (40% off Mar-May hi / low)1656 |
|
| 1187.77 |
1623 |
| 1179.73 |
1602 |
Please let me know
if you prefer this format for listing of the key technical numbers.
I received an e-mail from a reader yesterday, saying she preferred it
this way.
On a lighter note, every
once in a while you got to have a chuckle about your profession.
Today is the day for us traders. Think
about how “odd†it must seem to outsiders to see you poring over charts with
lines and such, and how your mood is directly related to the direction of those
lines. Click here
for one of the funniest articles I have ever seen on the market and technical
analysis, I think you will like it.
(PS:
If I am not mistaken, the chart in the article is too extended — I would
be looking for a pullback.)
As always, feel free
to send me your comments and questions.
Until tomorrow,