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
I am always open to questions, comments, or suggestions on how to improve this blog.

Tuesday, January 26, 2010

fear sets in

Things were moving along nicely today until it all fell apart. Resistance at the previous day's high held (also 50% retracement off of Friday's long range bar), and a double top (a triple top even!) was catalyst enough for a collective dumping of shares and ending the day right where we started. Bulls were likely looking for a strong close today in order to gain confidence that a bounce was in motion (also would have confirmed the Homing Pigeon bullish reversal candle pattern from yesterday). We're back inside a previous consolidation range. A breakdown from here would be significant, but we'll have to wait and see how enthusiastic buyers are at the $109 area.
Of particular interest;
The recent momentum down has registered the lowest momentum reading since the March "bottom"Also, looking back since March, there haven't been many occurrences where price attempted to rally following a sell-off, only to be sold into a long legged doji and closing below the previous day's close. It's actually been quite rare for price to retrace so little of a previous sell-off move.
And, just for the fun of it, here's a look at the cycles spanning these past few days in the SPY:

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