ETF SWING & DAY TRADING

[Mr Nasdaq]

Re: Winfree's Support and Resistance...

Hi Chico,

"The support and resistance levels he gives are great for a trading range situation, and very reliable, but in a trending market..."

In a trending market, the Support and Resistance levels still work, but in a different way...

The key to making them work is found in one of the principles of Support and Resistance. That principle states, "Resistance, once captured, often becomes Support".

The QQQQ demonstrated how that principle can be used for fun and profit on Friday...

As a subscriber to the Support & Resistance Report, you know that Thursday's area of "Gathering Resistance" was between $41.83 and $41.95. After printing a high of $41.99, Resistance was found. The QQQQ pulled back 26 cents to a subsequent low of $41.73.

On Friday, however, Thursday's area of "Gathering Resistance" was captured when the QQQQ opened at $42.11 and rose to a high of $42.21.

According to the principle of Support and Resistance as stated above, when Thursday's area of "Gathering Resistance" between $41.83 and $41.95 was captured on Friday, it was, thereby, transformed into an area of "Gathering Support".

In order to relieve any doubts that Thursday's area of "Gathering Resistance" was now an area of "Gathering Support", the QQQQ pulled back from its high of $42.21 to a subsequent low of $41.94 (the high end of Thursday's area of "Gathering Resistance").

Support was found and the QQQQ recovered to close at $42.16.

The point that I am trying to make is that even trending markets pull back, and that when they do, they often find Support at former areas of "Gathering Resistance" that were transformed into areas of "Gathering Support" when they were captured by a rising price.

"Resistance, once captured, becomes Support".

Mike