In the last 8 sessions the SPY has gained 6.98% and in the last 3 sessions it retraced no more than 1.87%. Things can go either way, but mostly feels like it's hanging by a thread as it waits for the next surge of buying.
This morning's test of the previous day's low was met with very strong volume:
The chart below has horizontal lines indicating the previous day's Open/High/Low/Close.
Of particular interest are the day's momentum divergences and First Cross entry signals. Also the fact that price was rejected from the PDO after basing around it for an hour.It's also interesting to observe how much price has moved in these last three days. Key in on the 78.6% retracement zone.On the 15-min chart we closed above our bullishly oriented Moving Averages (though if you use Simple Moving Averages price is wedged between the two MA's, so whatever). Price has retraced over 38% from our lows by today's close. Perhaps Monday we'll see a gap or move up to test the $110 price, being that we spent so much time around it today and Wednesday.
The weekly is interesting; showing those momentum divergences since March. March through July gave two divergent impulse pushes following a small window of downside momentum (which only amounted to a 7% correction). From mid-July to the end of this week, we have had two similar (and smaller still) divergent impulse pushes, and while price closed at it's highest price since October '08 it has barely any momentum left in it. Either we get more impulse up or correct another 7%, but something's got to give.
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
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