Thursday, October 30, 2008

Qs and the Pivots

A nice article in the new November issue of Technical Analysis of Stocks & Commodities by Jim White. . The Logic of Pivot Trading. Copyrights prevent me from posting the article but check it out at the local Barnes and Noble or Borders for free. What made me laugh out loud when I started to read the article was his test example . . . GE. Does everybody and his brother already know about GE and I'm the last to find out? Hey!, there's always another trading day so let's get on with mining some coin out of this thing.
Jim's arguments for watching the pivots closely are the same ones I've been preaching for years . . . simply put . . . they work. You can email him at Tell him I sent you and that you're a struggling trader (or some other pitiful story) and can't afford a TASC subscription . . . maybe he'll email you the article and/or some of his other links.
True to form today the Qs did their little pivot dance with my previously discussed 33.06 as the glass ceiling of resistance. Ain't it amazing how these pivots get hit day in and day out??????
Quite a few little 816 scalps today (blue ellipses). . . the only area of congestion developing the last 30 minutes of the 14:00 hour (orange ellipse).
General rule of thumb for the 816 trades is to stay flat for the first 30 -45 minutes while the opening range sets up. Sometimes that range becomes a trend for the day with little pullback, and on those occasions you have to be prepared to board the train and use an 816 reversal as a stop. Remember, these are daytrades, and are not to be trusted for overnight carries. Net result for the day 7 good 816 trades and 3 sloppy ones. I'll look at some easy ways to separate the potentially sloppy trades from the higher probability setups in some future posts.
No GE/Qs scalps today as no slope divergences developed. The only divergence was that the Qs closed up over a buck while GE closed up .13, revealing a relative weakness in GE. It'll be interesting to see if that relative weakness continues over the next few days or if GE and the Qs return to parity. I'm just taking it a day at a time for now.

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