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.

Thursday, July 16, 2009

nrC breakout

The SPY consolidated most of the day until breaking out. To keep things simple, here's a look at price on a 3-min chart. It exemplifies perfectly a high probability setup; a price impulse to the highs of the day, tight flag consolidation right at those highs, followed by further upside impulse. This setup is quickly becoming my bread & butter play across any security or time frame.Not sure if today's breakout was irrational exuberance or not, but looking at a higher time frame gives me the impression that we're WAY over-extended. On this 60-min chart we have a gravestone doji at the end of the day, while the momentum indicator is correcting off the slow line in a negative way:Here's another look on my standard 5-min chart of the SPY. Not indicated on the chart is the end-of-day bearish momentum divergence that is similar to that in the higher time frame above:

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