A couple of days back, I had commented on the negative divergences developing on the Nasdaq and had written that the index might test MA(20). Well, here is how the chart looks after yesterday's action.
Right at MA(20). The last few times the index touched MA(20), it bounced right back. What's going to happen this time? Well, the answer is simple. Wait and watch! Simple, right? But implementing it is pretty hard. One of the hardest things in being a trader is to develop the ability to sit there and do nothing. Being a short term trader, sometimes one feels simply obliged to take a position but in order to be a successful trader, one must master the ability to just sit back patiently until the right high probability opportunity comes. And right now, I feel the market demands just that - sit back and watch.
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Take care and good luck!