We made an attempt at testing previous highs, only to be sold. The good thing is, however, that we're building value at these higher levels, so that we can break out to the upside with conviction/follow-through; when/if this happens is another matter. I can see a test down from here to see if we can put in a higher swing low:This morning's gap-down was quickly bought, and the strategy I mentioned a while back for buying a return to the previous close was in play for a scalp. I've been forgetting to mention this technique, but that's not to say I have scrapped the setup.
These aren't hard and fast rules of course, like waiting for price to get to the exact PDC price. It depends entirely on the way things are moving, if there's a better opportunity to get in while suspecting a play off of this scalping technique than that's what you base your entry on, take this morning for instance; On the 1-min chart the nr7 bar (purple doji) at the end of the tight consolidation flag was a much better risk/reward entry, suspecting a quick move to (and off of) the PDC. As price flagged again at the $95.75 range you can see TICK getting weaker and the lowest close of that range was followed by a sell-off.Something else I wanted to mention was incorporating Buy/Sell Envelopes on some of my charts (select issues I watch with frequency). They're very similar to pivot points, and they're adapted from the Taylor Trading Technique.
This day's Support on the SPY was $94.83; not bad, our LOD was $0.06 higher. Meanwhile, the Resistance for today was $96.13, the exact penny for our HOD. Here's the 5-min SPY, with the Buy & Sell envelope are highlighted in the bright blue horizontal lines (the other three horizontals represent Pivot, R1, & S1).On the chart above, notice the "Slingshot" setup. Price put in a higher low, while the momentum indicator put in a lower low, giving you a buying opportunity that has three criteria; Pivot Support, a Slingshot setup, and a bullish engulfing candle closing right on top of the 20-EMA.
Finally, there was FCX this morning. Price based around the PDC for most of the morning. Towards the break of the base we had 4 narrow range candles, 3 of which were nr7's. I'm keeping a spreadsheet for FCX as well, using this Taylor Trading Technique I mentioned above. The Buy/Sell Envelope for today on FCX are highlighted on the chart below with green and red horizontal lines. Price came withing $0.03 of our resistance level! If there's any desire to know these Buy/Sell Envelope levels, let me know. For now, I'm keeping track of SPY, RIMM, FCX, POT, and XLE.
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.