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November 18, 2003
Commentary- The direction for today's commentary was
quite easy for me to decide on. I saw one setup that I really liked, and
decided to show that for today's topic. Unfortunately for the swing traders and
position traders, it's going to be another ES 3 and 13-minute setup. I will,
however, discuss the daily chart on the ES to see how this setup from today
plays into the grouping on the daily chart that we looked at in yesterday's
column. Let's start with a look at the 13-minute chart.
The arrow points to the area of the grouping
on the daily chart that we highlighted yesterday. I noticed the ES struggling
to reassert the uptrend that was continued with today's gap up. I dropped down
to the 3-minute timeframe and put a grouping on the chart.
I also put a trendline on the chart. I noticed that it
pointed to just about the same area as the grouping. I was going to watch this
spot very closely, and look for a short entry signal against the grouping.
Let's see how this played out.
I got an entry signal, and the move off of the grouping was quite
substantial. This chart was captured at the close. And where did the move go
to? Right back down to that grouping from the daily chart. In fact, it traded
just a little bit below that grouping. So, does that invalidate the setup from
the daily? For me, that trade was over as the trend down picked up steam today.
No way would I still be sitting on that daily timeframe trade. Keep in mind,
though, that's based on my 'Trading Plan'. Right now I'm thinking the
downtrend that is becoming clear on the 60-minute is the one to watch. With the
overall sentiment so bullish, though, I'd keep an eye out for some range
trading in here.
On another track, let me give a
hint about something to look at. Go pull up daily (and weekly, if you want)
charts for the dollar index, gold, the CRB, and crude oil. Something is
brewing, and I'm not all that convinced it is going to be good for 'Joe
Average'. I may discuss some of these things in the columns to come.
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