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, October 10, 2011

SPY weekly

First day of the week, so no telling how this weekly chart's candle will close, but a couple of patterns stand out.
On the weekly; 3-pushes to a low followed by a gap above the down trend line and 3d criteria on the 3/10macd indicator.
On the daily;  A momentum buy divergence at the bear trap.  The first test of the 50-day MA since 08/01 and we gaped at it and closed strongly above it.  $120 looks like obvious resistance, a test of which would give a reverse (sell) divergence (higher high in momentum, lower or equal high in price).   All of which would set up a very buy-able dip.
Closer look at the weekly.  A rally back to $127 would set up a reasonable short opportunity :

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