Fleeting Glimpses (TC2000)
One day, many years ago, when I thought I had learned most of the ways of looking at the market, I found there was another way. It was almost never talked about, didn't appear in books. Some professional traders couldn't verbalize it but used it almost subconsciously.
It is this. After you have smoothed everything out, shaped your moving averages, constructed your envelopes and channels, there is something else you don't see. What is it? It is the illusive fact that the market sometimes only reveals itself in fleeting glimpses. They say a day doesn't make a trend. That's true. But sometimes one single day can tell you whether the apparent trend is a hero or a pretender.
Possibly the best example of the market showing itself in a fleeting glimpse is the breakaway gap – through which a stock in a confirmed and stubborn downtrend turns on a dime and, in a flourish of trumpets and a doff of the hat, completely changes it trend and its character.
This is why, apart from looking for patterns and trends, I always keep an eye out for an anomaly within a day – something that just doesn't go with what seems to be true. When I land one of those anomalies and bring it into the net, it is seldom accompanied by a flash of lightning and a voice echoing through canyons. But it can put me on a new track, establish a new mindset, provoke a wariness or the opposite.
The way the market turned in the middle of the day, with the Dow closing above the close at its last minor peak, plucked a string on my guitar. Volume had been troublesome, but today it finally rose with prices. Last Thursday the Dow rose 237, the Nasdaq 103 and the S&P 500 27. But it could show no credible follow through on Friday, and on Monday it was “darned lousy.” Disappointment! That was the game it was playing and with great success. And then came today, with the Dow taking out a minor high. The Nasdaq and S&P 500 didn't better any resistance markers. But there was a perkiness that hadn't been there before. The Nasdaq was only up 38 points, but 81 of the Nasdaq 100 advanced, showing more strength than met the eye. Volume breakouts exceeded anything seen in the past 12 market days. Suddenly I could look at the positive TSV divergences in the Dow and S&P 500 and the Nasdaq with more confidence. The market, after bouncing me around for several days, suddenly, if subtly, lost the game of chicken and revealed something good about itself. We still need follow through. Personally, I think we're going to get it. -DW |
