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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Tuesday, March 9, 2010

rally fail

A gap into support and the market seemed like it was on course for a trend day. By looking back to Friday we could see potential for support around the $113.90 level (Resistance becomes Support (RbS).Another concept I have been learning more of lately is that of Point of Control (POC), and theories grounded in the market profile approach. Using the volume profile as a guide for potential Support/Resistance (the largest volume areas representing a point of balance in the market) here is what we get:Now take a look at the intraday 5-min chart with those horizontal levels (POC's) marked ($114.36 & $113.87):Also indicated is an Avalanche setup, where selling took place on higher volume, made an attempt to test the highs, then failed. Things looked promising for the bulls, though NYSE Advancing/Declining issues were under 1000 (not overly strong) and when Up-Down Volume broke down it was all over.The catalyst? Perhaps the selloff in GS helped contribute to the profit-taking dash for the exits.

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