Lower lows, lower close.
The SPY put in another decent volume selling day. In these past two weeks the SPY has had 3-days of 300-million+ volume. Only two other days going back to May of '08 have had volume over this mark.Also, our momentum indicator has gone negative (the slow line, a.k.a. the "Stability of Trend" -line crossing below zero). This has happened on three other occasions since March. When this happens we would look for the fast line to correct back into this slow line, where we would look to enter short once a lower high has been established ("First Cross" sell signal). On the chart below we have only really had one official First Cross sell signal, that one being back in June/July (first ellipse). The second and third time the slow line went negative, price quickly recovered with strong momentum to the upside.
The S&P closed right above support (1084).
Perhaps we'll get a Dow 10k test tomorrow?The Russell2000 could have some support underneath it:The Nasdaq had a bad day today
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.