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.

Tuesday, August 31, 2010

IWM wolfe wave

Just an observation for the potential bullish wolfe wave in IWM

Monday, August 30, 2010

the Obvious

SPY broke down from an ascending wedgeThere's a clear range of where the buyers and sellers are lined up
and there's a clear consolidation pattern developing that can resolve quickly (and should resolve quickly and with volatility, as one side will have to cover).A slightly bigger picture shows the "Death Cross" setup. When a moving average cross happens, typically the first trade in the direction of the crossover is to fade the price pullback. In this case, the 50-MA crossed under the 200-day, price pulled back to the 200-MA then continued to sell-off. It's sketchy down below from here because of the double-bottom potential.Then, on the weekly, there's this Bullish Wolfe Wave setup taking shape...

Friday, August 27, 2010

Momentum Buy Divergence

Signaled across the board today, was a momentum buy divergence on the 3/10 oscillator (daily chart). A handy dandy indicator to use when price is cycling, as it is now (as opposed to trending, and has been ever since the flash-crash).
DIA (green vertical lines indicate the divergence buy signal. Red vertical line represents a divergence sell signal),
QQQQIWM - Actually triggered yesterday and again on Tuesday.SMHIYT
The biggest problem at this point is the overhead resistance (a.k.a. SUPPLY). One can't expect a "Death Cross" to mean an immediate rejection of price. There are bound to be some short-covering, dip-buying rallies.Essentially, what it all boils down to is that the coming bounce should determine whether we probe lower (for a lot of, so far, untested price levels below), or higher (within the range we currently find ourselves in, up to around $113). It is critical, because "pace" (the bounces off of support we have experienced) is quickly fading.
Just as an aside, here's a good example of why the 3/10 oscillator isn't ideal in a trending market. Unless of course you use the signals as a contrary indicator.

Wednesday, August 25, 2010

short setup

V looks to be setting up on the short side as it flags at support. On previous tests of $70 price has bounced, here it seems as though buyers are disinterested in this price.

Tuesday, August 24, 2010

updated charts

TLT Wolfe Wave target finally reached
updated from {here}
USO updated from {here}
SPY updated from this morning {here}Shows a similar break-down structure as the USO chartSPY weekly chart (action/reaction lines), updated from {here}

bull wolfe wave

Potential SPY bullish Wolfe Wave setting up on the daily chart. Looking for decent volume.

Monday, August 23, 2010

USO pitchfork

Had some key Median Line setups these past few cycles in USO.
After two tests of the Mid-line, price returned to and broke down from the Lower Median Line.
The first congestion zone was right around the "Trigger" Line before breaking down further where it now sits at a potential support price (previous swing low).
Pitchforks seem to work really well (in terms of the setups involved) when you have some visible cycles present (non-"trend").
If no bounce from here, then $31-support is in play.

Saturday, August 21, 2010

What also didn't work

Following up on this post HERE
I still contend that the bullish wolfe wave is intact, but anything can happen at this point.
The current lows have a buy divergence going for it on the daily chart. Being that this could be perceived as a double bottom it could contain a tradeable bounce. Should the bottom give way, this weekly chart shows $35 as a reasonable target for support in the weeks ahead.

well that didn't work

Updated from HERE regarding the Falling Three method candle pattern on the AKAM weekly.
Was looking for weakness, but AKAM just kept getting stronger until it broke out of a really nice base.

Thursday, August 19, 2010

50-day reject

Aside from price being now below all three key Moving Averages, and the curiosity brought up in THIS post, there is now a potential First Cross sell signal in the making on the SPY (just a fancy term used to highlight a confirmed lower high or higher low). The trigger would be a lower reading on the 3/10 line (histogram).

TLT update

Bullish Wolfe Wave updated from {here}The upper median line happens to lie just below the wolfe wave target line

GLD wolfe wave

Bearish Wolfe Wave setup in GLD going forward. Volume, so far, is lacking.

base breakdown example

A good example of dying pace in GOOG today.
Bounced twice off of the initial low before continuing lower, while later Support was turned Resistance. Tough part would have been gauging a downside target, hmm.

Tuesday, August 17, 2010

Dark Cloud Cover

textbook Dark Cloud Cover in NFLX

RIMM wolfe wave

Bullish wolfe wave in RIMM that has a couple of things going for it;
- Strong Volume
- a gaped-down hammer candle
- a higher low than the previous swing lowSeen in a clearer light, price is at the bottom of a small downward-sloping channel, where we can plainly see symmetrical cycles of similar length (Regular Cycle 9-bars, Inverted Cycle 7-bars, and most recently an Inverted Cycle which is, so far, 8-bars in length).
Further illustratedThe price target for the next Inverted Cycle (should price not take out the current low) would be the top of this current channel, around $54. While the Wolfe Wave target is up towards the gap fill area ($57ish).

Monday, August 16, 2010


...did the Lehman Gap put a tear into the financial market's quantum space/time fabric?
I mean, just look at this price behavior every time we go into this zone:
September '09 - March '10

NO! Price has always acted crazy while in this zone. The vortex was opened up long ago.

Maybe it happened somewhere around 1998:Sept. '01 - June '02Dec. '03 - October '04

Friday, August 13, 2010


Recently updated blog post.

Also, the last four weeks in the ES (60-min time frame) including the Stevenson Cycles and bar count.

bonds up

TLT bullish Wolfe Wave shaken, not stirred:

from 07/31/2010:
TLT above $100 and looks to have just bounced out of the sweet spot of a bullish Wolfe WaveFound support at the 50-SMA (and a pitchfork mid-line) before gapping up to it's 20-MA (and the Upper Median Line).This weekly is somethin' else! Price coming back into the +$101 level could spell out some uncertain times for equities (read, volatility).