....The Dow sold off 777 points yesterday. Today the Dow gained 485 points. In other words, the Dow gained 37% of yesterday's losses today. So, can we assume that the sell off yesterday, after the official vote results were finalized, was so drastic because of stops below the market being hit, while intra-day traders piled on the snowball to the down-side? As we can recall, the markets gapped down yesterday and before the time the results of the bail-out bill were tallied the Dow was already down 300 points.
It could be assumed that if we got a YES vote on the bail-out the markets would have likely rallied, and possibly would have filled the opening morning's gap. So, what we witnessed yesterday can certainly be described as a number of different time frames being in the market at the same time; intra-day traders taking advantage of the volatility and swing and position traders (not to mention the robots) who were long, having their stops violated. Besides, there's a short-sell prohibition for 800 stocks as well.
The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at firstname.lastname@example.org
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