The Sunny Side of the Street
SUNDAY
NIGHT - July 20, 2003
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Figure 1a: COMPARISON: DOW vs SPY vs NASDAQ (Intraday)
Figure 1b: INDU Daily
As far as I am concerned, the technical picture has not changed from yesterday to today, so I my commentary will be brief once again. The Dow peddled in place on Friday, moving even less than Thursday. The only way to play this game is still to wait and see. The horizontal Attractors are in place and I am just waiting to see which way the markets break out.
Too many people, when the market gets in a phase like this, want to jump in and make something happen. Be assured, however, that there is nothing you can do to make the market move and it will only do so when the time has come and enough big money wants to play.
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Figure 2a: SPY Daily
The SPY bounced slightly from the Attractor at 98.42, but other than that continues to show a sideways picture.
The current set up on the ATR, following a solid upward trendline, makes me think that tomorrow might be a bounce off that trendline with the accompanying expansion in range. Whether the expansion will be upward or downward is not yet evident.
The RSI is now low enough to start another leg to the upside, with another bullish leg in the market, but it is probably a day or more away.
Figure 3a: QQQ Day bars
Figure 3b: QQQ 15-minute IntraDay bars
Intraday the QQQ dropped again and then found another steady Attractor, holding just above the 30.94 mark. On the daily chart that puts the QQQ right on the midline of the Sunny_Bands, hovering in a wait and see mode. Following the rules of thumb below, we are not long at this juncture, but neither are we ready just yet to get short.
I rather expect the QQQ to come back up from the midline, but only time will tell, as always. All I can say is it is neutral zone time, until we get a signal from breaking above or below the markers already in place.
Figure 5a: EuroDollar Daily - Sunday night commentary only
The
current signal on the EuroDollar model is still short, with nothing yet to
confirm or deny the signal. My interest in
shorting this market will only come if the EuroDollar drops below 98.88.
Until then, I stand neutral. This commentary still holds, two weeks
later, with the ED moving ever so slowly sideways.
Stay sharp and on your toes. Moves can reverse on a dime, anytime. Let the market speak to you. If the market is going down, by golly ignore my commentary from the night before and know that the market is going down.
RULES OF THUMB:
0. I keep the chart in Figure 1a on each day's commentary simply to illustrate how much in tandem the 4 indexes I watch actually are. For this reason, I don't always comment on every index. Analysis of one speaks highly for the same analysis for each of the other indexes.
1. When price is pushing the upper Sunny_Bands upward and then eases off and moves back toward the midline, it's time to take profits. If it starts moving up and pushing on the Sunny_Bands again, it's time to get back in. Likewise, if the market is pushing down on the lower Sunny_Band and eases off to move back to the midline, it's time to take profits from the short play.
2. Divergence of the RSI and price is another good time to take profits and wait for a breakout of price before taking a position.
3. When the exchange puts in curbs or trading halts on a large move down, it usually (not always) stops the downward motion. After the market reopens is a good time to take profits from your short position.
4. The market can't go nowhere forever. Eventually, who knows how long it will be, there will have to be a breakout-- one direction or the other.
5. This commentary is for educational purposes only, and is meant only to teach readers about my indicators, other technical indicators, and how I read them.
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While it may be true that a picture is worth a thousand words, it is definitely not true that a picture deserves a thousand words.