We continue to digest previous gains by moving in this tight range (can bode well for the bulls). Not much to say about today. There was a simple momentum buy divergence (which occurred at support on a hammer candle) just before noon, and a late-day trend line break, but once I started getting chopped up in the day's trading I stepped aside.
The green horizontal line on this 5-min chart represents the "Buy envelope" support line for the day. We found support there twice before breaking down. Being that the day's breakdown didn't really sell off, I still feels like all little dips are being bought. We ended the day in the top of the day's range, the daily SPY looks like a flag pattern, the range is tight, and the highs are less than 1% away.
The "Buy/Sell Envelope" Support/Resistance concept I mentioned before I keep track of on a small group of issues, RIMM being one of them. So, today's trade in RIMM was a breakdown on volume at that support level. There wasn't much follow-through and the second test of the lows on higher momentum and heavy volume brought prices back up above support.The daily on RIMM is basing around this long term level of Resistance. The 3/10 is also indicating a possible "First Cross" long entry should we get a tick up in momentum.
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 firstname.lastname@example.org
I am always open to questions, comments, or suggestions on how to improve this blog.