The Sunny Side of the Street
WEDNESDAY
NIGHT - August 13, 2003
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Figure 1a: COMPARISON: DOW vs SPY vs NASDAQ (Intraday)
Figure 1a: INDU Daily chart
Still, yet another sideways moving day. They just persist! The only way to take profits in markets like this is to look for small intraday moves and be satisfied with what you can get. The longer term market is neither moving up sufficiently to catch any long term trends, nor is it moving down sufficiently to catch any significant corrections from the short side.
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Figure 2a: QQQ Daily
The Daily QQQ is showing a short signal, and prices are in the middle to bottom half of the Sunny_Bands. I will take the short signal if and only if prices drop below the low of the signal bar, which is at 30.03. Until that time I am still watching and waiting.
Figure 2b: QQQ 15 minute intraday
Today's daily QQQ took the Sunny_Bands, in the lower 1/3 of the chart in Figure 2b, right straddle the midline. That's a positive signal, though the RSI is looking a little divergent. Linear Regression is sloping upward on the daily and intraday QQQ. These things say to me that the short signal is likely not to work out, but rather to be reversed into a long signal in the near future. That would also happen in a sidewinding sideways market.
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Figure 4: EMini intraday
Yesterday I sadi: "My guess for this one is that the 988 level will be tested from the top side tomorrow and if it holds successfully, we will begin to see the sideways activity move into a new range spanning from 988 to 1004." And, today the EMini was indeed tested from the top side, but it broke through and begin to test the 988 level from the bottom side.
Today's action would say that the EMini is still running sideways and not quite ready for the move upward into the new zone.
Figure 5a: EuroDollar Daily - Sunday night commentary only
The next Attractor is now down at 98.7, which could be a nice profit taking opportunity. Why? Because the RSI has been so low that I would expect a bounce when that level is tested. The RSI itself has had a little bounce, but I expect it will use the 40 level as resistance and drop a little further from here.
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.