Monday, November 05, 2007

Qs Close Below LR30 Channel

The Qs held their ground today with a S1 to PP cycle and some volume driven spillover. Of concern is the fact that the Qs did close below the lower channel line of the LR30, the first time this has occurred since the upward cycle began on Aug.17. The short term question is whether the Qs can get some traction and break through the support of today's high (54.40). If we get another close below the LR30 Tuesday, we may be seeing a trend reversal in the Qs.
November is historically the strongest month (S&P ROI) and the first 3 trading days are typically strong, clearly not the case this year.

Just a note of explanation as to why I no longer post daily VIX charts and comments.First, there are a number of excellent sites offering insight and technical studies on the VIX, including Vix and More and more recently, Traderfeed. I felt that my posts analyzing the VIX were becoming more redundant than informative, and although I closely follow VIX action in 2,10, 60 minute and daily bars and utilize VIX extreme reading to gauge my trading, these are essentially discretionary signals that serve as trend indicators rather than trade triggers.Second, those who have followed me for a while know that my focus is really on the Qs (and Q options) and although the VIX provides a relational base for reviewing the Qs performance, I have found that it is really not predictive in the same manner as the NYAD, TICK, pivots and parabolics. Thus, I have dropped the StockCharts daily bar format and adopted the Schwab SSPro platform charts and TC2005 linear regression charts as the backdrop for my daily commentaries. These are the the charts that I look at as I trade and the indicators are set the way I examine them throughout the day in order to trigger entries and exits. I believe that this new format will better serve both my readers understanding and my explanation of the setups that I favor and the technical analysis tools that I use to evaluate trade probabilities.

No comments: