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, March 25, 2009

Gap, Consolidate, Expand

Another G-C-E day (Gap, Consolidate, Expand). The first 20-minutes on a 5-minute chart of the SPY gave us a small ascending triangle before expanding upwards. A hesitation at R1 before a test of the highs from these past two sessions.
Here again on this chart I marked two instances where the "First Cross" occurred today. The first long entry (green vertical line) I didn't take as I'm not comfortable entering on the close of such a strong wide range candle that brought price up to the highs of the day. The second entry short (red vertical line) was a lot easier to consider, though it did take a while for the move to get going. Watching my 15-min chart we had an interesting performance. Price fell right down to the bottom regression-channel line, bounced, consolidated for a candle, dropped through and then snapped back; pretty impressive moves.
I also noticed something that I mentioned in yesterday's post regarding LBR's "Slingshot" strategy. The swing low on March 20th and today's swing low formed both (a) higher price low and (b) lower momentum low which did end up leading to a "slingshot" rally.
Our longer-term perspective showed us a tag of the 50-EMA leading to a rally; intriguing.Attempting to see turning points in the market I try to gauge NYSE TICK, combined with SPY volume and price. On this chart below, we notice a progressive downward slope in the TICK with below average volume. As price began to sell off, volume increased and the TICK continued to reach lower lows. The successive lows in price occurred on lower volume, while TICK began to put in higher lows.

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