I find it funny that news came out a half hour before the closing bell on Friday, which helped the Nasdaq rally back 30 points, and the DJI 200 points, on the day. Did they have to hurry to release it before the bell rang, or was the release timed?  I’ll never know. It seems interesting it happened just as the Nasdaq was beginning a new leg down intraday. You can see the candlestick to a new day’s low on the chart. Then it
closes at it’s high of the 5-min period, and is followed by another bullish candlestick.

Now unless you’re really on top of your game, you’re not going to buy the higher high there. The candle just made a new low. You can definitely tell something is up though, when the next candlesdtick becomes a wide range bar. Bulls have rushed back in.

Psychologically it’s tough to buy after sitting all day in a market that has done nothing but drift lower. This is the time you must though. This is the trading opportunity you’ve waited for all day. I sat there and knew I should pull the trigger. I knew QLD would rally to it’s 200ma. I’ve seen it occur before. I finally did get in after it had already run a point. Moving from a very patient stance to one of aggressive action is a key factor in successful day trading. Master it, and watch your account grow.

I made an incorrect choice holding QID overnight. The ETF gapped down as the Nasdaq gapped up. I set a stop on 1/2 below the first 5-minute low. My disaster plan calls for selling the second 1/2 under the higher of the 5 or 30-minute low. In this case my position held.

I should have waited for the great entry on the 5-minute chart to trade QID. You can see the gap down followed by the first reversal up. QID then pulls back with three candlesticks, and triggers that buy signal on the fourth. R is less than .20 if the pivot low is used for trade protection… and just .10 if the previous candlestick low is the stop.

Note where that little rally stalled; at the 200 ma. See how it bounced off the 200ma later in the day.

I had a good gut feeling QID would continue higher if that trendline was retaken on the 60-minute chart. Bullish QID traders had enough buying power to trade back above a trendline that had held since December 26 (it stretches back to that date). They were in control.

Where does that leave us on the daily charts? One day closer to a breakout that should trade in a trend for a while. The last three days have been fade the gap opens. I sold QID with a profit, and mounted MZZ using the 5-minute chart, on a bounce off the 200ma near 61.7. We’ll see if holding the trade overnight pays off. Or will we gap opposite again!