The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it. I use this criteria as a way to alert me to an existing condition of price. I trade the 15-minute time frame with the 5-minute to trigger me into a trade.
The 2c condition presented itself in the SPY today, leading to a reverse buy divergence (higher low in price with a lower low in momentum, often occurring in condition 2c). There wasn't a solid "trend" today (for my time frame) like there was last week, but price spent these past two sessions pulling back to a mean (20- & 50-period Averages) following the recent downward momentum which started off the week.
Some things which may be be present for a buyable 2c setup:
- 3-pushes to a low, evident on the 5-min time frame, often resembling an inverted Head & Shoulders pattern.
- The 3d setup on the faster time frame (look for a measurable seed wave).
- An orderly trend down which is broken, leading to price discovery back to a significant breakdown point.
There was upward momentum (gap above previous day's High) off the open this morning which spent the early afternoon pulling back. This pullback found support at the 50% retracement level as measured off of the previous day's Close to today's Open.
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 firstname.lastname@example.org
I am always open to questions, comments, or suggestions on how to improve this blog.