‘Tis The Season

October 18, 2002
Don Miller

‘Tis
the season where earnings action often dictates market movements, as has been
the case yet again over the last 24 hours
as MSFT and others have given futures traders in
both the overnight and general sessions cause to reach for the Dramamine.Â Yet
the hourly and daily market uptrends continue to provide wind at the longs’
backs as the market tests weekly downtrend support.

For traders trading the lesser timeframes, such longer-term supports for both
uptrend and downtrend scenarios remain solid backdrops for trading the 3- and
13-minute charts, with today’s 3-minute providing yet more solid opening trading
opportunities (more on that below).Â As was the case yesterday, keep your eye on
any emerging hourly price vs. momentum divergence which may provide clues as to
a potential reversal off the weekly short support.Â On the long side, the hourly
continues to provide a nice trail point, keeping in mind the reward/risk ratio
may begin to skew to the short side if we’re unable to break to new highs.

ES (S&P)Â Â Â Â Â
Friday October 18, 2002Â 11:30 A.M. ETÂ Â Â Â Â Â Â NQ
(Nasdaq)