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Strategies & Market Trends : DAYTRADING Fundamentals
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To: shasta23 who wrote (6908)2/9/2000 5:47:00 PM
From: TraderAlan  Read Replies (2) of 18137
 
Stefan,

No this isn't an intraday measurement. Its a 14 day RSI smoothed by a 5 period MA (its smoothing the whole thing).

This RSI has few whipsaws. You watch the slope and use it to estimate overbought and oversold conditions. Last I looked Naz RSI has actually turned up a bit from about the middle of the range.

I traded WCOM several times on the way up and suspected the reversal today as it opened right on its 200 day EMA, which is major resistance. Also traded ADBE a few times but never suspected the rally that took place. Don't think that can be predicted. You have to go with the odds and leave it at that.

I use indicators to support the pattern, never the other way around. I've "suspected" Naz has been in a boxed trading range between 3700 and 4200 but it did bust it yesterday. Today it fell back in. There is a major divergence between the SP/Dow and Nasdaq and I honestly don't believe Naz can make much more progress without participation of the other indices.

I just watch tests of the highs and lows to watch what happens. Naz index and its stocks are notorious for popping through support and resistance points, cleaning out the crowd and then reversing. Everyone and their brother thinks they're a TA expert these days so you can't trust natural pivots the way that you used to. They still work but are much more noisy, i.e. they will violate repeatedly just to catch the TA newbies who think they discovered the Rosetta Stone.

Alan
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