Monday, September 15, 2003
Issue Contents:
| 09:54 | Good Morning... |
| 10:17 | Your Invitation to Real-Time Trading |
| 10:29 | Squeezing Blood Out of a Stone |
| 10:36 | Divergent Opinions |
| 10:42 | [$SPX, Daily] S&P 500 Index |
| 10:45 | [$NDX, Daily] NASDAQ 100 Index |
Sorry for missing the opening bell.
A few housekeeping items. Mike has been sick since last Tuesday with that doctors believe is gastroenteritis. When he went down for the count last week, he was in the middle of programming the automated upload of the trancripts from the Real-Time Trading Group. Since we are now using DigiChat instead of PalTalk, I am unable to retrieve and post the transcripts, and will have to wait for Mike to complete the mission.
Your Invitation to Real-Time Trading
Beginning Tuesday, September 23, 2003, our Real-Time Trading Group will host a free day each month for the TrendVue community. To participate, you will need to have a free TrendVue Member ID.
Squeezing Blood Out of a Stone
Over the past three months, even though the market has been going up, traders have found it hard to make money, because the movement has been in selective stocks.
This is the daily chart of the S&P 500 index. Take a look at the average true range numbers. It's the lowest in a year, and what it means to us is that instead of being able to expect a movement of 45 points per day back in July 2002, right now, we can only expect a move of 9.89 points of day. This means that intraday traders have to be extremely careful, because if we set out to make two quick points a day, we would have had to capture a 4.4% move in a day's range back then, compared to 20.2% right now. I think they ought to put this chart next to the word "stalled" in the Webster dictionary.
Same thing for the Dow Jones Industrial Average.
Even the NASDAQ 100 Index is pretty sad. The bottom line? We take it easy, since we cannot force blood out of a stone.
Before I passed out late in the night, I was surfing around, reading opinions on the market. It seems that we have quite a big of divergence here. On one hand, one site says that it's moving up in "stairstep" fashion, while on the other and, another site says that it looks just like August 1987.
I think that's sort of unusual.
Not much to report, other than the fact that the daily $SPX is trying to bounce off potential support in the form of the June/July highs, plus the 20-day EMA.
So far, we haven't seen much thrust upwards, and this will likely set up a swing trade on the SHORT SIDE tomorrow. We will set it up for Bottom Line Strategy subscribers later.
[$NDX, Daily] NASDAQ 100 Index
Same story here. We'll see if this is a weak bounce, and if so, we set up a SHORT SALE swing trade on the $NDX daily chart for tomorrow.
I think what traders are detecting is the fact that it's stalled, but contrary to what a lot of them seem to think, the market does not go up and down. It actually goes up, not up, down, not down. From my vantage point, what we are seeing it "not up", but it's not the same as down. While it seems to be stalled on the upside, it is definitely not in a downtrend; therefore, we are interested in intraday and/or one or two-day hit and run swing trades.
Note that the $NDX daily chart has so far formed a doji signalling indecision, right at a resistance area left from the gap down, plus the it's the top of a tall black candlestick, which is also an area of resistance. This is also a test of top on the daily chart.