Volatility Bands Continue To Provide Excellent Trades

March 1, 2005
Kevin Haggerty

What Monday’s Action Tells
You

NYSE total volume of 1.8 billion shares
attests
to the month-end activity. The volume ratio finished at 31 and breadth
was -721.
However, the market action had a “V” shape as programs dominated
action.

Traders had 2.0
volatility band long trades
in
the major indices yesterday, while the SMH provided a
Trap Door reversal
short
that declined -1.5% from entry before resuming the direction of the open
which
then reversed again because of the program air pocket after 11:45
a.m.

Traders start today looking at triple tops
just
above in both the SPX and Dow, so intraday short setups can be worked
against
these tops if we rally and then be ready to reverse the trade to the upside
if
the Generals push the button. The next short-term position trade depends on
whether the major indices are advancing or declining into next week’s time
zone.
The longest intraday trend which I look at is the
“523” Trend
Method using the
120-minute chart. The SPX 34 EMA is 1200.76 and the Dow 10,750. The QQQQ 523
Trend is negative with both the 5 and 20 EMAs below the 34 EMA which is
37.35
vs. the 37.22 close.