While the SPY was leading in the markets yesterday at it's highs, the DIA was leading on the way down this morning. Right around noon prices in the DIA began to break down and make new lows, meanwhile the Q's, SPY, and IWM were all trading off their lows.Here's a link to the 2B bullish reversal setup.
Aside from the non-confirmation of index lower lows, price also displayed some momentum divergences at this point, followed by a classic bottoming setup known as a "Phoenix" (see the link provided).
Price never looked back after gaping away from this setup, and though it may appear lucky that the market rallied as strongly as it did today, perhaps the breadth divergences were cluing us in? The Advancing/Declining issues were trending up, while the Up/Down volume was still working lower.
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.