What Reflects The True Guts Of This Business...

Both major markets have broken out of strong opening bull cups on their respective 13 & 60 minute charts, and have broken recent resistance to the north as we approach midday. As we discussed yesterday, a reversal north of 910 would trigger any short positions taken on sharp pullbacks to yesterday's down move (of course E-Mini traders couldn't short the deep low-risk pullback as Globex was long gone by then) while attempting to continue the daily uptrend. The morning bull cups as highlighted below provided additional fuel for the current move. (We'll revert back to bar charts next week.)

There may be a few pullback scalp opportunities in the afternoon on the long side, keeping in mind the highest probability handle entries are likely behind us, and reversals may become a consideration should we pull sufficiently above supports that would carve out some retracement profit potential. School traders know that low-risk reversals should always include at least one trend on their side to provide both an entry and stop premise, as was the case with yesterday's midday triggers off the daily support.

I could probably write for hours about yesterday's Globex outage, including my thoughts on reminding traders to always have the ability to hedge in another account, never leveraging beyond what would be considered a prudent business decision -- the extent of which of course varies by trader, opportunity cost among E-Mini traders in terms of the inability to trade the afternoon setups, and the emotions and motives at play among major market players as the afternoon squeeze progressed.

For now, suffice it to say that as with any business, stuff happens, and our course indicators continue to provide strong guidance for managing any day, whether it be yesterday, or any other of the 250 trading days each year. Events like yesterday also serve to reinforce my belief in incorporating live trading into any of my educational tools, including the upcoming seminar, to appreciate the "rolling up the sleeves" and reality part of the business that most who don't trade choose to ignore. Effectively dealing with challenging trade management issues, whether they occur during a temporary loss of quotes, a massive Globex outage, or the proverbial "brain cramp," reflects the true guts of this business.

ES (S&P) Friday May 2, 2003 12:00 PM ET NQ (Nasdaq)

Moving Avg Legend: 15MA 60-Min 15MA
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Charts © 2002 Quote LLC

Good Trading and Have a Great Weekend!

Don Miller

P.S. Spend a week with me trading the E-minis -- Live! Click here for details.