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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Monday, June 13, 2011

morning setups

A couple 3d setups coming into the morning.  As I have said before, the 3d setup is typical of a short-covering/stop-triggering behavior.  So, know where strong/weak resistance levels might be located and plan accordingly.
AMZN set up the 3d going into the close of Friday.  The second 5-min bar triggered an entry, while overhead was $189 resistance

On the smaller timeframe it is easier to determine where "minor" resistance levels may be; I think about in terms of "where would shorts sellers have break-even cover orders placed?" (especially those shorts which may be late to the game).  It's these orders that I'm anticipating a possible short squeeze to bring price up to a major resistance level/target. 

CSX was another 3d setup going into Friday's close. 

Again, where would possible break-even levels be that could trigger a short-covering pop, and likewise, where might a major resistance level be that higher time frames may be entering in the direction of prevailing momentum?

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