This Is When I’m Finding Good Trades
I alluded to this yesterday in my column, but did
not have enough time to finish my thoughts. The key reversal bar
formed on Wednesday was certainly bullish, purely from a pattern standpoint, but
with sentiment readings the way they are, as well as the internals on Wednesday,
it was hard to get too excited about the move higher.
Nonetheless, the market has moved up nicely and may continue to do
so. However, purely from a technical standpoint, it may be tough for this rally
to go very far.
Historically, after a move has retraced .786 off the high, it rarely will
resume its previous trend, in this case up. Sure, we may rally for a few days,
and that would be fine, especially into the next potential Fibonacci time date
on March 21. This would set up one hell of an opportunity for longer-term
shorts. Additionally, if you go back and look at charts for the S&Ps and many of
the major trading stocks, you will see that most of them stopped dead at a 62%
retracement off Wednesday’s low and the high back on March 3.
However, going back to the basis of my article, HVT, I continue to find good
trades in the opening hour. For those of you who have just finished reading my
book, your next step is to integrate in key technical levels to the trade
setups. This makes for a very robust approach to HVT. A great example was a
trade in Citibank
(
C |
Quote |
Chart |
News |
PowerRating) from yesterday.
I had indicated that 32.12 was a very critical level, and in order for C to
attain higher price levels, that area would need to be taken out.Â
That was my “bigger” picture viewpoint, granted, my idea of bigger picture
may be the next hour or two. However, 32.12 IS still significant even for
an HVT trade when it coincides with a standard setup, in this case a short sale
in a downtrend.
Make sure you are stationed at your keyboard at 9:45 AM
for the release of the Michigan Sentiment Number. In
the last few months this number has created some great volatility spikes when
the number came in worse or better than expected. The consensus is for a reading
of 78. As
always, a significant deviation from that number, higher or lower will “goose”
the market for a few minutes, just enough for nimble traders to get in and take
advantage.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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