At The Close | NOV 2004
At The Close by Jayanthi Gopalakrishnan
Stocks & Commodities V. 22:11 (130, 116): At The Close by Jayanthi Gopalakrishnan Just when I think I have a system in place and have it all figured out, the market pulls a fast one on me. Just when everything is moving along in one direction, something will happen to cause everyone to reverse direction, and very quickly. Whenever I see this happening, I can’t help but remember a phrase I once came across that I still consider to be a perfect description of the financial markets: “Market participants are like a school of fish that all change direction at the same time.” To give you an idea of how accurate that statement is, I am going to share a trade with you. It’s not necessarily an example of a good trade, but of course, at the time I thought it was fabulous. On September 1, 2004, the daily chart of the Standard & Poor’s 500 (Figure 1) showed that the index was hovering over the 50-day moving average. Judging by the reaction of prices to this moving average, I wasn’t sure whether it would go up or down. But given that the moving average was sloping down, I decided that if I were to make a trade, it would be to short the e-mini if the opportunity arose.
by Jayanthi Gopalakrishnan
Technical Analysis of STOCKS & COMMODITIES
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