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
I am always open to questions, comments, or suggestions on how to improve this blog.

Thursday, April 1, 2010

More Median Lines

Of course after yesterday's post regarding the Andrews Median Line I have to now obsess over it and use it all over the place.
So, on with the charts.
Starting with a 30-min chart of IWM over the past 3-weeks. This one containing 3 forks (color coded in their labeling). The larger one (teal) has a trigger line drawn off of it being that price hasn't touched it's Median Line, so a short setup would be entertained should price close under the lower trigger line (all explained in yesterday's post). Today's open put price right at the Upper Line of the Red fork where price was rejected and we based around the yellow fork's median line before breaking down. I included the 3-cycle stochastic just for shits-and-giggles.Looking closer on a trigger chart (5-minute) the Lower Trigger Line (LTL) is retained (teal line) to show how price based along this level before breaking down. The lows coincided with the Previous day's close on a momentum divergence, leading to a short covering rally back above the LTL. Unfortunately when I pressed the button to short this, I got the "Order Rejected" prompt, not cool.Here's a look at the SPY 15-min chart with 3 forks on it:Now to the Q's. I've been posting this chart lately, as we seem to be bumping up against this resistance level.Here's a look at the 10-min chart where prices were sold at that $48.57 level. What's curious is the volume surge we saw come in this late afternoon. Merely a short-covering before the long weekend?While price is just basing around...maybe we'll get a climactic gap up come next week.
If we were to gap up next week and test that $50 area, it fits right in with previous extremes on the 'ol Andrews Pitchfork:
And finally, take a look at the weekly stretching back to the bottom in '03. The median line acted as resistance on the first touch, before price came charging back above.

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