SPY gapped down this morning within 10-cents of yesterday's opening gap down price. After finding support at S1 we got a dragonfly doji followed by an nr7 up candle on top of vwap (don't you love having a confluence of reasons to take a trade?). We did manage to fill the gap (which coincided with pivot resistance), but that was about all we managed. From there it was all downhill. Later in the afternoon was an utter mess with a broadening wedge that will drive you nuts. At 4-p.m. the SPY closed just under the gap-up low from Thursday last week. As of 4:15-p.m. price is back about that level (shake out?).
We did put in some lower highs and lows today, and the 20- & 50- EMA's have crossed over bearish. However, price hasn't liked that orientation lately, so we'll see if it tries to shake off that bearishness tomorrow.These empty spaces we're being left with (a-la opening gaps) are being guarded closely.
This afternoon's attempt to fill the gap left from Thursday resulted in sideways consolidation with a meagerly bearish TICK. While at the end of the day the TICK gave it's lowest reading of the day and price put in a higher low (on extreme volume) and turned back up towards the opening range low. Price is not giving up without a fight.
Compare that to early last week, where TICK sentiment was certainly bearish, but price refused to go any lower. You have to wait for price to tip it's hand with certainty. Maybe Intel earning's will put a strain on things?
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 email@example.com
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