The Charts Speak For Themselves
As many of you know,
one of the benefits of trading based on technical indicators is that the charts
are completely unemotional and unbiased. Yet if charts could talk, they’d
probably be laughing, or at least staring in bewilderment at the continual rally
cry of those who continue to call for market bottoms in the face of downtrends
on just about every chart one can find.
Now while this point may seem more applicable to longer-term trading vs.
intraday, it remains key nonetheless, as twice in the last two days, the rally
caps came out, first on yesterday’s
(
INTC |
Quote |
Chart |
News |
PowerRating) "let me it say it again,
only louder" news, and then today with the pre-market GDP release. In both
cases, however, could we break out of a 60-minute downtrend as defined by its 15-MA?
I’ll let the charts speak for themselves.
At the risk of stating the obvious for some, news means nothing and it’s merely
trader reaction to news that is key. The fact is as that of this writing, the Qs
remain south of their 15-MA on just about every major time frame which, until
broken, must be respected. As each one breaks, whether it be today, tomorrow, or
whenever, we then must clear resistance incrementally and watch to see if the
lesser time frames test and hold their supports. When that occurs, I’ll also
sign up for one of those caps, but not before.
As the day wears on, watch as the three- and 13-minute 15-MAs begin to converge
mid-day, which may point the way to afternoon action in terms of a "Landry-esque"
bow-tie cross or double resistance.
Wednesday
August 29, 2001 12:00 PM EDT
If you’re like me,
you’ve probably noticed that the market’s pace at these levels has mirrored that
of an aircraft carrier more so than the speedboat that we grew accustomed to
earlier in the year. As a result, I’ve found that one-minute charts have grown
smaller in importance and the three-minute has become a nice microscope for a
market whose 13-minute trend seems to dictate. Food for thought anyway.
Good trading!
Don Miller
P.S. I’m pleased to announce that I’ll
be hosting a two-day
QQQ trading learning forum immediately following TM2001 at the Venetian
Hotel and Resort on October 7- 8, 2001. It seems like we’ve struck a pleasant
nerve with the Q column, and I look forward to sharing my thoughts and views in
a live forum highly conducive to learning and interaction, as well as simply
meeting many of you in person. So whether you trade the Qs or watermelon
seeds, consider extending your stay just a bit and we’ll combine some very
intensive trading discussions and some fun!
For
a more in-depth look at how Don trades the QQQs, click here.