Stock, Option and Futures Trading
DOW & QQQ Blue Bars
We did a post when the DOW was at the 10,700 low saying we could short squeeze back up to the 11,200 level. The DOW went higher than the 11,200 to the 11,350 level and then back down to a new low at 10,400. We played that move with FAZ calls and IWM puts.
From the 10,400 low we had another short squeeze back up to the 11,200 level. So the 11,200 is a meangiful level of resistance. We also noted the 2220 on the NQ which the high Friday was 2222 then a 25 point move to the downside.
Using the blue bars you can see how it has done a nice job picking the lows and the highs. We like to use multiple symbols because one is always going to get the blue bars before the others. When looking at the market as a whole we like to look at NQ,ES,TF, YM , SPY and QQQ.
You can see how the blue bars picked up the low on the QQQ chart but not the DOW chart. But the DOW chart picked up the blue bar high on 9/27 when the QQQ chart did not have blue bars. We call it multiple symbol confirmation just like using multiple time frame confirmation. It is worth your time to look at multiple symbols because one is always leading the others.
Once you learn how to look at multiple symbols then the next step is to learn what you are looking for and have the tools to give you odds of turning points. We use patterns first then our indicators second to confirm the levels we trade.
Just like we said in the post below we think it is best to play it wave to wave and you can see how the market is making one leg moves up and down and having the levels ahead of time to look to exit can be the difference of making money on the trade or having a losing trade. Sell into the strength of the waves (or scale out) like we did with SKF. Book some profits and move the stop to even.
SKF,FAZ,TZA all look ready for calls as of the close of Friday we will see how Monday opens then get in new positions.