Today the SPY (5-min chart) gapped down into S1, rallied up for a gap-fill, and trailed into a falling wedge before expanding all the way up to our pivot (which corresponded with a 50-EMA resistance on our 15-min chart). The pivot point for today is at the same range where price seems to be finding some equilibrium lately. The $84.30 area corresponds with the low of the April 9th gap, where price has on numerous occasions found support.
If you didn't buy the falling wedge breakout; A "First Cross" trigger (green vertical line) was given coming out of the high and tight bull flag (11:45a.m.EST). Another strategy I'm looking to incorporate is the reason I included the DMI in sub-graph2. The concept is to trade the direction of the +/- DMI when ADX ticks up from the low of the day (provided DMI is greater than 25 at the time). In this situation you would have gone long (two white vertical lines) at or near the highs of the day.Looking at the 15-min chart; price has retraced 50% between Friday's highs and today's lows (Fibonacci retracements not shown). It's amazing how quickly those moving averages get back to a bullish orientation lately. Also notice how price chops around that area that corresponds with the April 9th gap-up lows.
Watching the NYSE TICK with SPY price today we can see the open was negative (but not overwhelmingly so) but began to trend up through the morning. Following the high TICK of the day the TICK readings began to fall off, and once the upward trending TICK readings began to fall through it's corresponding trendline it was a good time to start taking profits. With the same approach, once TICK broke out of that downward trendline to the upside (coupled with the generally positive bias to the NYSE TICK) it showed renewed interest in the upside.So, after our little pullback yesterday, price closed near the highs of the day, leaving us with a piercing line candle pattern.
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
I am always open to questions, comments, or suggestions on how to improve this blog.