The SPY has been repeating a similar cycle for the past two weeks.
Following a short squeeze type of rally, price has then rolled over in an XYZ corrective wave.
The 3/10macd 3a criteria describes price as testing resistance. Should resistance break and price goes higher the fast line shows greater momentum and the slow line is often pulled positive. This behavior can often begin a new trend. However, rather then a trend developing, what we have seen is price being sold and correcting most/all of the previous gains.
Here are two looks at what I'm talking about, the latter just highlighting the XYZ waves
A broader look in the chart below; we haven't gone very far, but there are clear areas to watch
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 email@example.com
I am always open to questions, comments, or suggestions on how to improve this blog.