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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Wednesday, January 12, 2011


SPY; another gap up on low volume. with stochastics, RSI, et al. oversold and divergent.
Price opened right near the 50% extension of the previous day's High/Low range, barely retracing in the early morning before continuing higher.

I was a little late to enter, ideally the long entry would have been closer to the Opening price, and I didn't get in until about 8-cents later.  The target was a 50% extension measured off of the previous day's Close to today's Open.

These opening gaps on barely a substantial TICK reading just exemplifies the fact that just because it's not "confirming" doesn't mean it can't run on fumes and emotion.  While price barely retraced it's sizable gap up, once price recovered the Open there was barely a seller to be found, and while later in the day a large negative TICK didn't sink the ship, instead signaled a reverse divergence bringing prices back to the highs.

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