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Nationalist Traders Log


Profiting from the NASDAQ Mania

For Oct. 10, 2001

Just a note to let you know that we have a new sell signal as of the close on 10/09 which you may view below. No additional commentary until this weekend.

NASDAQ COMP with ADX

That is all the comments for tonight. Should be back again with more tomorrow night.

The Gold Stocks

09/05/01 Tough call as we are just now entering oversold territory. The dollar has broken to the upside, and I would wait for an indication of the near term direction of the dollar before entering the golds. The option open interest ratios are too bullish.

Monitor the gold stocks here: HUI

Monitor the dollar here: Dollar Chart

The Oil Service Stocks

09/05/01 I would wait for a break above OSX 81.

The Bond

09/05/01 The near term direction of the bond will be determined by the economic news over the next two days including the service NAPM and the employment report. I suspect it is still a sale, but would wait to see the service NAPM tomorrow before taking a position ahead of the employment report on Friday.

Nearby Long Bond

SHORT TERM NDX/QQQ OUTLOOK

09/05/01 Looks like 1-800-GET-ME-OUT has finally arrived. I suspect the NDX and NASDAQ will underperform the SPX because of fund switching by the 401(k) crowd into the better performing funds. It could get very bloody and go to extremes. On guard against a short term bounce here, but will follow the trin in my trading.

09/05/01 - We have a new counter trend buy signal added on 09/05/ for Thurs. 09/06.

Daily QQQ

Notes on Today's Trading Signals

Before reading this section you should read Trading the NDX - How the Little Guys become Big Guys.

Reserved. SI HOURLY QQQ and Stockcharts HOURLY QQQ

Reserved. FIVE MINUTE QQQ chart from AskResearch.com.

You trader types who want good support and resistance points might want to check out the NASDAQ commentary at Velociraptor. His trading predictions are at least as good as mine, but you will need to convert the COMP numbers to their NDX and QQQ equivalents.

Some Notes on the Trading Method

For some time, I have been concerned that my daily descriptions of technical signals and my expectations for the coming day do not really describe the rules that you and I should follow in actual practice.

So I want to set forth a primary entry rule. Enter short only when the Stochastic Oscillator is overbought (above the 80 line) and enter long only when the Stochastic Oscillator is oversold (below the 20 line). Enter a trade at any other time and you take an enormous risk of reversal and short term losses.

Acting only when the STO says it is safe will spare you oceans of grief from whipsaws. If you can develop the discipline never to chase the bus, you will win over the long term.

You should exit a position when the STO goes to the opposite extreme from where you entered, or if the trade does not work and violates your stop.

This simple discipline works whether you are using the hourly or the daily chart.

Thus all the analysis and market calls for the following day must be interpreted and used keeping the above entry and exit rules in mind.

Generally, you should not initiate a short sale unless NASDAQ trin is above .75 or heading up toward .75. If trin is between .75 and 1 the trend of trin should be up before a short sale is initiated. Short sales can be initiated at any point if trin is above 1, meaning that declining issues have more volume than advancing issues. Also, a NASDAQ trin above 2.5 (outside of the first 10 minutes of trading) is often climactic and will usually provoke a short term rally.

Tomorrow's Call

News bound for the next two days. Expecting a bounce to QQQ 37.3, but mutual fund redemptions look like they have started and could throw all of our oversold indicators into the dustbin. Watch especially the last two hours of the trading day and expect this net redemption selling to vary from day to day in chaotic and unpredictable fashion.

QQQ Target Array
09/06/01

TARGETDescriptor 1Descriptor 2
42.35resist-
4034 dmaresist
40strong resist-
38.4resist-
37.313 dma-
37resist-
35.663 dma-
*35.3308/31 Close-
34old lowstrong support

Yesterday's Call: reserved.

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Disclaimer

The Ole Ygg is not a registered investment advisor. You are responsible for your own investment decisions. Do your own research, and if relying upon advice of others, seek counsel of a registered broker or investment advisor first. The above comments are intended as conceptual discussion of market direction and technical indicators only and are not a recommendation to purchase or sell any particular security.


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