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
I am always open to questions, comments, or suggestions on how to improve this blog.

Wednesday, October 8, 2008

wait for it

For being down 500 points on the Dow yesterday and an afternoon rally of a couple hundred points while closing negative across the boards, there's an awful lot of "bottom" calling going around. Volume wasn't very convincing and all we seemed to accomplish today was a rally to our intra-day highs before selling into the close. hmmmm, I'm not convinced. We need a strong trend day of buying. The late day sell-off was pathetic.
The setup I focused on today was an ETF of the S&P500.
SSO - ProShares Ultra S&P500 ETF on the 5-minute chart, formed a descending triangle.
As selling dried up we got a pop out of the triangle. A measured move put our target above the highs of the day. Being that this is a bear market, and essentially a "counter-trend" move my target was the highs of the day, which is exactly what happened. I wanted to close out and enter short from that point as momentum diverged, but I thought we might get a pop to the upside, instead we dropped like a stone.SDS provided the mirror image of a trade. So, if you wanted to go short at the end of the day, but couldn't acquire the shares, you could have gone long SDS.

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