That was some weak. Such strong sell-offs that felt like reversals, only to be revealed as retracements that presented buying opportunity.
Straight out of the gate this morning we had a "gap-and-go" move on strong TICK that stopped just shy of R1. This move was followed by an "oh-boy, is this a reversal?!" gap-fill (not quite filling the gap) down to pivot support. Notice the Resistance-becomes-Support price behavior throughout the day.The TICK stayed strong all day long. Even when we were filling the gap, and things looked like things might be getting reversed, I noticed the advance/decline line was still predominantly bullish, making me think we weren't going to get too bearish early on.
Something I haven't been keen on spotting until it was too late is the "Slingshot" setup. I did however take note of it this morning, and it paid-off pretty well.
The 15-min SPY chart showed a lower high at the open combined with a higher momentum high, leading to a "Slingshot" in price. The gravestone doji was a great time to consider getting short. Meanwhile, later in the day we got two "First Cross" entries (within 2-bars of each other, shown in the sub-plot below the 3/10 macd indicator).Coinciding with this early morning move I was watching TZA/TNA, which turned out having a similar "Slingshot" setup on the open.
Here TZA put in a higher low combined with a lower momentum low, leading to a "Slingshot" in price to the upside. The hammer was nearly a dragonfly doji; a wick that long was hinting that those lows were being bought.
While this move exhausted itself (at the 20- & 50-EMA confluence of resistance with a bearish orientation) I turned to TNA looking for a long entry. I got a long "First Cross" entry on the closing of the first strong green candle (white vertical line, coinciding with the green dot in the sub-plot below the macd).
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.