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
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Thursday, November 18, 2010

SPY top down

Starting with the Yearly chart, Price is in the upper 25% of it's recorded range:

and above the midpoint of the 2008 bar, yet resisting the 61.8% for now:

With the month coming to a close it should be important to see if this November bar will close above or below the May corrective bar as the $122 (61.8% retracement) price continues to be rejected:

As the 2bTop still has potential, a close below $119 by month's end could bring a correction (A close below $119 may be difficult with tomorrow being OpEx).  There is a confluence of support below at around $112, it is the monthly 50% Fib level and the weekly 50% retracement level following this most recent advance.

And now the Daily.  Price was rejected on the first test of a 50% retracement following the most recent impulse down:


Denali92 said...

I keep looking at that September monthly bar and think that we need to re-trace to the middle of it at some point in time - December would be the ideal time...

But maybe it has to occur at the end of Jan / Feb - at some point I am certain we will get to that midpoint and close all those gaps down below too!

todd said...

$112 looks solid, no? I'm wondering how long the currency/equity correlation will hold up.
The EUR/USD & USD/JPY look as though they have some more testing possible at their highs/lows respectively.
We shall see.

Denali92 said...

112 looks very solid - though there are a few gaps down below there that really should get filled before we go a lot higher.... of course, we left unfilled gaps in July 09, so maybe the Aug 31 gap will also stay open for a long time.

Anyway, I am not going to get too bullish until we have a significan re-test, the weeklies are less OB and the NDX, midcaps and smallcaps surrender some of their strength relative to SPX