The Sunny Side of the Street
SUNDAY
NIGHT - August 3, 2003
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Figure 1a: COMPARISON: DOW vs SPY vs NASDAQ (Intraday)
Figure 1a: INDU Daily chart
Continuing along the sideways winding path, the Dow and the QQQ played in a narrow range today, as did the SPX. (Check the chart at the top of the page to verify that they are still linked.)
I have drawn a yellow box on the Dow chart to show the channel the market is in, and marked the highs and lows for potential breakout alerts. I'm sticking to my guns on the daily chart until the market breaks out one direction or the other.
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Figure 3a: QQQ Daily
Almost, but not quite. While the intraday QQQ made it over the 32.20 mark, the closing price on the daily chart did not. So it is not quite a buy signal as yet. But, close.
Friday's move still qualifies as sideways, as it stayed nicely within the Sunny_Bands, but there was enough force behind the intraday up move to give a hint of a positive attitude and potential run up in the near future.
Figure 3b: QQQ 15 minute intraday
Couldn't have been much more sideways! The market started with a bit of a down move and then spent the rest of the day moving in a narrow 20 cent range--next to impossible to trade.
I pulled off a 20 minute long trade from the blue arrow to the red arrow, netting a small profit, but that's all I could get out of today.
Still, the fact that the market is not falling any farther, but rather holding up bravely above the line at 31.30 shows at least some sign of strength.
Figure 5a: EuroDollar Daily - Sunday night commentary only
The current signal on the EuroDollar model is still short, but now at last we have the breakthrough we have been waiting for to confirm the signal.
The ED dropped below 98.88 on 7/31, which was the time to actually believe the short signal and make a move.
The next Attractor is now down at 98.7, which could be a nice profit taking opportunity. Why? Because the RSI is so low that I would expect a bounce when that level is tested.
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.