A quick look at RIMM following Friday's sell-off (seems a theme following their earnings announcement). Yet another way in which the Andrew's Median Line can clue you in to the strength (or weakness) of a rally (in this case, the momentum thrusts starting in February, ending at the $75 mark).
Using 3 pivots; November lows, December highs and January's higher low, we can construct the Andrew's pitchfork.
The fact that price was unable to reach the Median Line (dash middle red line) was a good indicator that strength in the rallies was lackluster.A fluke you say? Well, if you don't want to take Andrew's word for it, take a look at what Fibonacci was saying;
The dash yellow line on the chart below is a Fibonacci Extension line.
The dash white line is a Fibonacci Retracement grid.
We can see how, in February, price resisted the previous December swing highs that corresponded with a 61.8% Fib. Extension and came close, but couldn't quite tag the Andrew's Median Line. Price, however, consolidated at those highs (sign of strength) before pushing higher. Price again fell short, not only of the Andrew's Median Line target, but the Fib. -38.2% retracement and the 100% Fib. Extension, screaming weakness (that shooting star doji was the last straw 4-days ago).
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.