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Strategies & Market Trends : Classic TA Workplace
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To: patron_anejo_por_favor who wrote (51121)8/24/2002 10:28:16 AM
From: AllansAlias  Read Replies (7) of 209892
 
Everwhere I am reading the same trader strategy: this run most likely has more in it, so I won't be timid and will buy this dip after it goes down some more. Bulls and bears alike are singing this tune.

I think the market will surprise traders one side or the other of this strategy. Either the pullback is more shallow than most think (i.e., it's nearly over) or it will be deeper. The latter has some appeal for me.

Imagine that we head down early this week to the area that most of the chart-chasers are watching. For the tech side, I see a lot of technical traders looking at QQQ $24.35 (+/-) as their target for a shallow buying opportunity. I will continue to watch for this building consensus, but there is no way I jump on board with this crowd.

I think there are a few places that hardly anyone is looking:

1) We bounce before, and I like $24.65-$24.90 for that target. If we get a bump up on Monday and another drop into Tuesday, every chart-chaser is gonna be calling the H&S top in QQQ.

2) We head to new lows in tech.

3) The middle road: This is the option killing road, a whipsaw path that would be hard to trade. It would see the drop going deeper than most expect, getting the disinterested and scared bears back into the market. Once we get these reinvigorated shorts back on board, we rise into September expiration, enough to kill the eager put buyers, but still below where we are now so that the calls going off in this last round of panic buying die too.
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