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 October
3, 2004 Commentary (weekend edition)-
Today I'm
going to revisit the charts from the September 22,
2004 commentary. Exactly what I suspected is starting to shape up. I
have been all over this since even before I posted that commentary, and it
'made its move' pretty much exactly where and when I expected it to.
Let me quote
from that commentary:
"We have all the big indices and a key sector
all rolling over at key lines. It is very important for me to take notice of
this. This is so obvious I strongly suspect it is a 'trap'. If not, then I
suspect it will be a temporary trap. It seems like everyone on earth is selling
short off these lines.
My bias surely has to be on the short side, but I'm very
'jumpy' in here. I feel like the insect that's walking around and I just got a
hint that that faint circular line in the dirt I'm approaching is a trap-door
spider, just waiting. Given that, I'm still playing the short side, but I'm
being extra cautious. I'm also looking to play long if I see a trap unwinding,
and then I'll evaluate if the long side looks 'real', or if it is acting like
the run up is done for now.
I'll be watching price action, volume, sectors, futures,
currencies, and anything that I can if I think it will help me read the market.
If all these lines break to the upside, I think that could potentially be very
significant. Remember, we are nearing the election. This hardly seems like the
time for a big move down to start. It does seem like a time for me to be very
wary of traps, though."
Let's look at those same four charts with the current
data. I'll start with the INDU.
The INDU has turned right near a .618
retracement (not shown), and has started up towards the trendline. Interesting,
but not all that remarkable. But wait. Let's look at the S&P cash
now.
Now, that's what I was thinking might happen.
It's not set in stone, but a move is happening. And it was quite easy for me to
see when it was starting, and to get a long bias going, even if it might be a
temporary bias. But, let's look at the NDX now.
The NDX has blasted right through the upper
median line parallel. I'm seeing some serious signs of a trap well sprung, and
a move starting to take place, perhaps into the election. Lastly, let's look at
the SOX.
The SOX has also taken the upper median line
parallel out. All these indices have turned and given clear signals for long
trades for me. Now they are showing 'breakout' signs, as I suspected. This week
will be key, to see what happens from here. So far, though, it has been so
predictable for me it's been ridiculous.
Let's finish with an update of the
gold chart, as that is getting near.
I've been waiting patiently for quite awhile
on this one. I have no idea what it may do if/when it gets to the potential
trade areas. I do know that I will be waiting, watching for entry triggers, and
acting according to my 'Trading Plan' if I get the right sequence of events.
All I can do right now is wait and let it unfold. It may be a classic like
GOOG, or it may not be. That's trading.
If you have had any difficulty e-mailing me
(bounce backs), or if you haven't gotten an answer from me for two days on an
e-mail that you sent, please resend. I had one report of difficulty, but I
don't suspect the trouble is on my end. Just in case, I wanted to mention it
here.
The next commentary will be the mid-week edition, posted by
Wednesday evening.
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