Surfers need waves to surf by and so do day traders. Well, today was a surfs up for day traders, these are the day’s that a good trader will make a killing. The market started the day with a small gap down to open @ 85.06 setting the low of what looked like the day’s low @ 85.00 by 9:35 am. The market then rallied triggering a first 5 minute short by 9:50 am reversal time, but then the price action failed on the sell and the QQQ took off like a rocket upward to set the high of the day @ 85.77 by 10:30 am. I expected the Q’s to stay bullish for the rest of the day but by the start of lunch, 11:15 am, price began to roll over which looked more like a pull back at first and not a short. By 11:30 price had fallen and started to base until 12:00 noon when price collapsed confirming the new downtrend on the 5 minute chart. Price action pivoted @ 12:30 and pulled in for a few bars before going sideways until 1:10 am when price started to sell off again. Price sold off hard for 30 minutes straight finally ridding itself of all the sellers on huge volume ending the downtrend in what traders refer to as a Climatic sell off @ 1:30 as the QQQ put in a beautiful bottoming tail triggering a climatic buy for the astute trader. Price then rallied all the way almost reaching the high for the day but coming up short @ 85.64 by 3:30 pm reversal time. Price then faded to close this wild day @ 85.52; here is the crazy 5 minute chart of the QQQ today.
QQQ 12042013
My play of the day came as I watch the QQQ go climatic on the 5 minute chart. I was all over the entry on the 1 and 2 minute charts. Price moved up nicely as expected since this play had all the textbook attributes of a Climatic Buy Setup: Bottoming tail, on volume, over 5 red bars down, and @ 1:30 pm reversal time. I was in on the 1 minute chart @ .91 cents full share size. I sold 1/2 at my first target of 85.11, then I sold 1/4 @ .18, then price reached my longer target @ .31 where I sold 1/2 of what I had left and finally trailing the play @ .28 where I sold my final shares. Huge play for me on this wild trading day.
