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 December 11, 2003
Commentary-
Well, we had another great trading day in the
market, if you had the patience. It started out great, and then it went
completely to sleep. I was watching for the release of the Fed minutes two
hours before the close. I expected that to pop us out of that narrow range. It
did, and the trading was great.
Let's start out with a look at how things
have been progressing since the ES hit that grouping on the 60-minute chart.
I'll show the December contract, but keep in mind that we have rolled out now
to the March '04 contract for trading. As I mentioned a few columns ago, I
still look at the groupings on the older contract for a while because the data
is much better.
That grouping was a real nice reversal point
on this 60-minute chart. Recall how this grouping was almost exactly at the
same point as a grouping based on a pattern on 3-minute chart? Well, we can all
see the pattern on this 60-minute chart, but let me highlight it anyways. Look
carefully and see if you can see anything else in there.
Let me drop down to a 13-minute chart and
show you something. I will be looking from the center of the above pattern
forward. Look again at this last chart before you move on, and see if you see
it. Again I'll refer to the December contract for data clarity, even though we
are now trading the March '04s.
Starting to recognize that structure? You know, the one I keep
pointing out pretty much every night? This time there were three 5-point
patterns converging on the same spot. One on the 3-minute chart, one on the
13-minute chart, and one on the 60-minute chart. Those are the kind of odds
that I like. The market seems, to me, to be outrageously harmonic lately. If
you follow Scott Carney over at Harmonic Trader, you don't have to
be told what you are looking at, you already know.
Let me show
one more very interesting setup that I saw today. I was expecting the Fed
minutes to pop us out of that dull trading range that we spent most of the day
in. I was expecting it to be a bullish move, because my own personal opinion
(and it's just that) is that there are election year games going on, as well as
Fed games going on.
I spotted this pattern on the 1-minute chart on the
semiconductor holders, which I feel has been trading great lately. My play was
for a very short-term intraday long trade, if the pattern failed. It did. Take
a look at this chart.
I was waiting to get long after the release if it started to go up.
This pattern gave me a great setup. Remember how I'm frequently saying that the
patterns tell me something if they 'work', and they tell me something if they
don't. If this thing was going to go down, I expected this pattern would have
set it up. I got a nice pop that I was able to capitalize on, to satisfy my
intraday trading urge. It's not a late 90's pop, but it's about as good as any
I see in this market.
Pattern after pattern after pattern is what
I'm seeing lately. I don't recall ever having seen so many patterns. Lots of
tight groupings, forming right at the pattern completion areas. Multiple
convergences. Things are good for my style of trading right now.
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