...or is it resistance?
Looking for support in a strong momentum move can be pretty straightforward (so long as support holds ;). What we had to go on in today's SPY sell-off were prior consolidation ranges, between $117.50-$119 (Resistance-becomes-Support). After having potential targets in mind, it becomes a matter of watching for selling exhaustion (TICK divergences and higher lows within your target boundary).Here's a look at the SPY daily price congestion rangesHere's a look at the volume profiles, showing the primary congestion range
What's really interesting is the following monthly chart of the SPY. The $119-$120 level (where we found support today) coincides with a mid-point of the S&P500 going back 12 years. Also interesting is how the above chart looks a lot like the one below...so, is the current phase finished, or only half-finished? :)
The QQQQ closed the week just under the $50 mark:One further observation;
The Dow closed just barely above the 11,000 mark. Take note of how long price has previously bounced between the 10,000 and 11,000 levels before:
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.