Resistance becomes Support (RbS) in the SPY as price gaped down (on scant momentum and returned back to a previous consolidation level.Looking at the Volume Profile of the past few days, watch areas of previous large volume levels, particularly those not yet tested (VPOC). Below we see some levels of potential Support/Resistance, I also marked the gap created on Wednesday last week. This perspective highlights the concept that price often tests areas where it previously sliced through.
Now look at how it translated onto a 5-min price chart with the same price levels highlighted:
Not labeled on the above charts is the overhead resistance level (in terms of the volume profile) between $116.90 - $117.15.
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
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