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I day trade the QQQ's (strictly in/out intraday no overnite
holds) and focus each morning on just what the right side of the chart is doing
and trading consistent with the current intraday trend. However, with some
of the debate regarding are we at a top/bottom at least for some length of time
I have the following observations, FWIW
1. The commercials and large speculators, as Earl posted
recently, are net short, while the small speculators are net long. I take
that as at least a short-term negative.
2. The old trader's saw of buy Halloween and sell Spring
is currently upon/near us, with many short term tops put in in
March.
3. We have had a great move off of the September
lows.
4. Interest rates have been rising with the market now
debating not if, but when the Fed will start tightening.
5. Consumer confidence soared this month, yet big
ticket purchases are anticipated to decline (borrowed sales last fall from
now?).
6. Market PE ratios, especially on large cap, are at
high levels, with the hope the earings will pick-up the second half of the
year.
7. Also, if the commercials/large speculators are on the
wrong side of the equation it sets the stage for a big short-cover rally, which
if the Fed saw this happen I think they would be more inclined to tighten rates
sooner rather than later.
8. And more of my friends are starting to ask me again
what looks good to buy in the market!
Based on the above, I am concluding that we are near at least
a short-term top and would be suprised to see new highs at least until later in
the fall.
The above is just my 2 cents worth, from a day trader that
gets impatient when a trend takes more than 30 minutes to develop. Also,
even though I have the above opinion I will be playing both the long/short sides
as the right side of the 5 minute chart dictates.
Best regards to everyone,
Ed
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