Friday, October 3, 2003
Issue Contents:
| 01:11 | Good Morning... |
| 01:21 | [$INDU, Daily] Dow Jones Industrial Average |
| 09:03 | Paul's Watch List |
| 09:20 | + 57,000 Non-farm Payrolls |
| 09:25 | Swing Trade Setups |
| 09:41 | [$HUI, Daily] AMEX Gold Bugs Index |
| 17:38 | 2003-10-03 Transcript for Real Time Trading Group Real time forum discussion: 2003-10-03 Transcript for Real Time Trading Group |
Well, we made it to Friday, but we still have to get through two more items in the U.S. Economic Calendar this morning.
It's amazing how time just flies. It was just yesterday that the world was going to come unglued on Y2K. How ironic that it turned out to be the top tick of the world as we knew it. The end of the year is sneaking up on us. Yom Kippur begins this Sunday at sunset. Columbus Day is October 12, which is also Canadian Thanksgiving. October 26 we turn back the clock. After Hallowe'en is U.S. Thanksgiving and before you know it, it's Christmas, and New Year. Wow!
It's been a long year for us here at TrendVue, with all the changes going on. As the year comes to a close, we are really looking forward to the next one, because all the diversions will be behind us, and we can go back to why we got to where we are now: strategies for success. I can't speak for Mike, but I am sure that we will be having a blast next year as we return to our roots, picking up where we left off in 2000 and returning to R&D into the nature of price. We've got a lot of ideas that I want to test, and with him back at the helm, anything is now possible.
[$INDU, Daily] Dow Jones Industrial Average
$INDU DAILY: The chart above has nothing on it other than the 20-day EMA and the 50-day MA on it. Why? Because every time we hit a target for a certain setup, we can pick up the eraser and dust the chalk off the board. This allows is to take a fresh look at it and contemplate the price action in front of us.
We can draw new lines here to mark out support and resistance. In this case, a pair of horizontal lines around the September 19 high and the September 30 low. This is the new trading range on the daily chart.
Recall Wednesday's buy signal based on a $VIX reversal setup. These are typically good for a few days. For those who bought, the upside target is a test of the September 19 high. The downswing between September 19 and September 30 was seven bars. The rule of thumb we use to calculate how much time it "ought" to take to get to the target is half of that. In this case, it works out to three and one-half days. Today is day three.
This is Paul's intraday and swing trade watch list for Friday. He will review the setups for the Real-Time Trading Group at around 11AM Eastern.
BUY SCALPS:
- No symbols.
SHORT SCALPS:
- HON @ 26.45
- ADBE @ 39.20
- AMZN @ 48.67
- ERTS @ 94.52
- SYMC @ 64.01
Prices above are used as ALERTS to look for intraday entries. If you need additional ideas, don't forget that we have automated Stock Scan Lists as well.
****
The top two stories on WSJ.com are related this morning's big numbers. When we read these headlines, what we are interested in is the sort of language they are using, because it reflects the collective consciousness of the market:
The Unemployment Rate held steady at 6.1% in September and payrolls expanded by 57,000 jobs, snapping a seven-month streak of job cuts.
U.S. stocks are expected to open sharply higher Friday, as the surprisingly strong jobs report lends hope that the economic recovery is plowing ahead.
So, it was only a few days ago, the market was "doomed" because of the Dollar's move down, a move that they detected "only" three weeks after it began as it came in to test the low on the weekly chart. On Tuesday when the daily chart of most of the major stock indices set up a buy signal, they were mute.
Next Monday, we will begin posting a swing trade setup each day. For subscribers of The Bottom Line Analysis, we will show you exactly how the setup is identified. For subscribers of The Bottom Line Strategy, each setup will be a complete case study of how to use options to swing trade.
[$HUI, Daily] AMEX Gold Bugs Index
$HUI DAILY: Last time we looked, the $HUI had made a reversal in this timeframe and was making a small attempt to bounce. So far, it has been extremely weak, but is holding still. We have to call this the "spike and ledge" pattern, which is formed after a reversal after a big runup in price. The ledge is the part where most investors believe that it's simply a pullback waiting to go higher, but it actually goes off the cliff on the downside after a tiny consolidation. I have marked off the tiny ledge with a pair of horizontal lines.
2003-10-03 Transcript for Real Time Trading Group
Real time forum discussion: 2003-10-03 Transcript for Real Time Trading Group
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