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Strategies & Market Trends : DAYTRADING/SWINGTRADING STOCKS with INTRADAY INVESTMENTS -- Ignore unavailable to you. Want to Upgrade?

To: bowledover who wrote (114)	5/27/2001 3:14:58 PM
From: -	Read Replies (1) \| Respond to of 565

Thanks, David. Good questions like that are always welcome. And, it's always good to know there's someone out there reading the thread! ;) We were referring to 2230 on the COMPX, which was the top of the recent trading range. On April 20 we hit 2202; May 2 2232; May 7-8 2210-2215; May 16 2216... those highs more or less define the top of the trading range, which we really think of as more of an overhead resistance "price band" than a specific number. The point being that whenever the market has tried to trade to those levels, the sellers come out of the woodwork, stopping the advance. That's good old "overhead supply" at work; something has to change to get through it and that's what happened last Monday (May 21). There are many other ways to characterize the recent trading range... e.g. on one excellent thread moderated by a friend of ours, they were having a debate about what sort of technical formation (chart pattern) that trading range represented - bull flag, bear flag, handle of a cup&handle, head&shoulders, etc. These were great questions that a lot could be learned from, but on the other hand we always try to keep our market analysis as simple as possible. So, we characterized the April 19 - May 21 pattern as simply a trading range. Anyway, on May 21 the Nasdaq broke out, taking out the top of that trading range. Now (with the market pulling back) the question is, will we STAY broken out, or will the Nasdaq trade back down into the trading range? :) If the buyers return after this pullback towards the breakout point, there decent odds we'll see an uptrend to the 2600-3000 level this summer. Ed can explain how we use Elliot wave and Fibonacci analysis to project likely price targets. We also watch for congestion bands and previous swing highs-lows, e.g. if the Nasdaq takes off and runs, then we'd expect the 2800-2900 area to be a challenge, as it was there that a major swing high formed during the big selloff. But we don't have confirmation that this breakout is real; the market cold easily fall back into a sloppy trading range, or even test the old lows from earlier this spring. Although Greenspan is cutting like a madman, Silicon Valley is still solidly locked into a profit recession. It's simply too early to say with any confidence that we're going to have a rebound in high-tech earnings in the next quarter or two... so the current tech rally (from 1620 to 2250) could still turn out to be a bounce in the tech bear market. We don't try to guess about those sorts of things - we'll leave that to the market gurus & pundits. What we try to do is to be aware of all the possibilities, and prepared for anything that comes our way. The market could also simply chop around in a slopppy/sideways fashion for a while - we're ready for that, too. Steve

To: bowledover who wrote (114)	5/27/2001 8:35:13 PM
From: drfibo	Read Replies (2) \| Respond to of 565

Hi David, I came up with the 2230 as a key resistance level to break on the Nasdaq because the swing high for the index which occurred on 05/02/01 was 2232.66. Once the Nasdaq broke above this key resistance it's next resistance would be the 2242 - 2245 range which represents a .50 Fibonacci retracement drawn from the January Highs to the April lows on the Nasdaq. Notice that even though the Naz has traded down from the May, 22nd highs, it has been able to hold the 2243 level. This area which previously served as resistance is now support! The next major Fibonacci resistance for the Nasdaq is the 2400-2406 range. Of course, along the way there are other minor resistance zones. The important thing to remember is that 2400 is the next big obstacle for the Naz. In it's most recent 4 day trading range, the Nasdaq has resistance at 2282, 2292 and the all important break out high of 2328. I hope this helps clarify our thoughts on the Nasdaq. Happy Trading, Ed - aka DrFibo intradayinvestments.com

To: bowledover who wrote (114)	5/27/2001 11:04:32 PM
From: -	Respond to of 565

David, here is an annotated daily chart illustrating the Nasdaq trading range situation: intradayinvestments.com

To: bowledover who wrote (114)	5/28/2001 5:12:41 PM
From: -	Read Replies (1) \| Respond to of 565

Summary of Short-Term Trading Tutorial Posts on this thread (as of Monday, May 28, 2001): #40: The Break-Even Stop:: One of a Short-Term Trader's Best Friends Message 15814751 #41 "The Equity Curve" (EQT) technique -- A foundation for short-term trading success Message 15814903 #42 Broadband Connectivity Choices for Day Traders Message 15815717 #60: The Loser's Spiral - The Dark Side of Trading Message 15826505 #62: DayTrading vs. SwingTrading Message 15826596 #82: Types of Stops: Machine-held, Broker-Held, ECN-Held, Exchange-Held Message 15836120 #103: Intraday/Day/Swing Trading using Options Message 15856650 #110 Key intraday Periods in the Stock Market Message 15858839 #111 The Importance of using Multiple Timeframes in Stock Trading Message 15859228 #112 The Benefits of Sector Trading Message 15859549 #113 Relative Strength Trading Style Message 15859556 #116 A Thought on the Psychology of Trading Message 15859955 #118 Trading Book Review: "Pit Bull" by Martin "Buzzy" Schwarz Message 15860721 #122 An introduction to Fibonacci (Part I) Message 15862389 A few of the posts that are based on my 1999 posts on the "Daytrading Fundamentals" have been edited/updated. ===