Jan
29
2009

  Long on Cubes

I reviewed all my charts, and it really seems like QQQQ ("cubes") has exhausted its selling pressure and so I bought some. A little over the "target" price based on the TD indicators, but not much.

Technically, bottom indicators are starting to align in several different sectors. This is no guarantee of a rally, prices could be stuck in a consolidation mode (that means they fluctuate up and down within a certain price range without making a decisive break in one direction or another). But the indicators to point to a reduced risk that prices will suffer a significant further decline before trending upwards.

Personally, I'm looking for a rally. Not a big one, I'm setting my profit goals modestly, and need to be vigilant about keeping up with the price moves to cash out and take profits conservatively without becoming greedy. Gotta work on my trading discipline.

For now I'm keeping an eye on SPY and EEM, they are nearing the end of their exhaustion cycles but aren't there yet, so I'm still waiting. I'm surprised the financial ETF I'm in, XLF, isn't down more than it is given all the bad news in that sector. But that's where the beauty of technical trading comes in-- it illuminates price trends independently of the news cycle. And the bottom line is that to make money you care about your purchase and sales price, not about any vague notion of consumer or investor sentiment as reported by the media. The uptrends usually start amidst the worst of the news, well before the news improves. So we'll see if the XLF and USO trades work out for me in the end. After all, technical trading only points to entry and exit points with an increased probability of profit, not a guarantee of profit.