The Potential Fly In The Ointment…
Both major markets are following
through on extensions to Friday’s closing daily and hourly bull cups as we go to
press, and are currently hovering near
multi-month highs. With all trends strong short of monthly, the potential fly in
the bull’s ointment remains one of extension as markets continue their recent
runs for the roses. As a result, we’ll continue to monitor developing price vs.
momentum divergences for reversal premises should they occur, especially if we
stretch a bit farther from our intraday 13 & 60 minute supports. Yet as always,
waiting for a lesser interval to begin the momentum downward remains the safest
bet for long trailing stops and/or reversal attempts.
For now, it’s the shorts that remain on the run, which is why favor our bull
cups with 15MA handle bases as one of the strongest setups in terms of
underlying trader psychology, probability, and reward/risk ratios. Traders need
look no farther than Friday afternoon’s 6-point ES pop — in a low volume,
illiquid afternoon trade nonetheless — and today’s extension to reinforce the
premises taught in the
video and
simulations.
Heading into the afternoon, my bias remains long until either we stretch
significantly north or lose 13-minute support with underlying divergences, at
which time the mindset will shift to the greater probability of a retracement —
the duration of which we’ll let the market decide.
ES (S&P)
Monday June 2, 2003 12:00 PM ET NQ
(Nasdaq)
Moving Avg Legend:
15MA 60-Min 15MA
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Good Trading!