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.
Monday, January 11, 2010
A descending triangle in PXD today provides a good example in watching the "pace" develop in buying versus selling. Price bounced three times at the previous day's close (corresponding with the previous day's highs) before failing. The first two times price had a strong bounce off of this level, while the third test displayed weak buying, leading to a failure. By trans-secting the low-to-high price points you can see how the buying interest waned at the third test, looking similar to falling dominoes. Price achieved a measured move out of the triangle to a base, while it measured another move out of the base (measuring from the failure point to the base). PCX had a similar setup (didn't trade this one). This was a good example showing off the mini bear flag that set up right at the failure point, also the absence of buying when price returned to the $20.75 base for the third time.