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.

Monday, April 19, 2010

value area

The SPY came in to test a previous range of congestion, resulting in interested buyers.
Here's a chart of the Volume distribution, highlighting levels of previous VPOC's, giving us a congestion band to work through. The idea being, if the market were very weak perhaps we would have consolidated here before continuing lower. The fact that buyers stepped in gives potential for further upside testing.Here's where that band lies on a daily chartOn an intraday basis, this band coincided with the previous day's low (PDL). Once testing this band price found resistance at the day's Open price, put in a higher low (W-bottom), and extended back to the day's highs.
The Fib. lines are drawn off of the seed wave to give potential targets.

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