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
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Wednesday, December 9, 2009

steep retracements

The 78.6% Fib. retracement held as SPY support today. The chart below measures the distance between the most recent swing low (the "Dubai gap") and swing high (tested on 12/04). This level also happened to be a confluence level from a 100% Fib. Extension (measured from the 12/04 high and corrective move low and projected off of the following corrective move highs). On top of it all, today's test of the lows happened on a momentum divergence.
Just another bounce on range-bound support. The last three times we bounced from this level we put in a new high on the very next day! Tomorrow should give us a reasonable clue to determine the "pace" of buying interest.Here's another look at the 78.6% retracement level from this morning in the SPY on a fast time frame. As measured between their most recent swing highs to lows in the opening hour:And then, when price was testing the lows of the day price made two steep retracements and turned around on strong volume (not shown):
SPY with Up/Down Volume today:

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