creeping higher

Gap up today on strong TICK and as price crept up TICK declined the whole time. The tipping point came at the $89 mark (on SPY). Notice also the diverging TICK as price was testing the highs.The momentum oscillator gave us a nice entry at the top of this move (red vertical line). I changed my 3/10 macd to color-code the slow-line so that when it is increasing it is colored green and when decreasing it stays magenta (I had it red, but it stands out better this way). This way it's easier for me to trade based on setups previously outlined.
While this downside move bottomed-out we got a bullish momentum divergence, as price put in a lower low, the momentum oscillator gave us a higher low (also coincides on the 5-min chart with NYSE TICK from above with the divergence).
Watching the 15-min chart we had a number of divergences. From the opening move there showed a bearish divergence between today's high momentum reading and yesterday's. We had a "Slingshot" setup; a divergence where price puts in a higher low on a lower low in momentum. The upside play didn't result in that big of a move (about $0.40), but it played out nonetheless. Afterwards, a bullish momentum divergence set up late in the afternoon, giving us a move back up to the 20-EMA. I'm currently debating moving over to a 10-min chart instead of the 15 for my three-screen setup, just not sure yet.The 30-min chart shows an interesting breakdown in momentum starting today. These higher price highs have come about on lower momentum highs. Also, as the momentum lows have been steadily shallower the triangle that this combination has formed (lower highs, higher lows) broke down today. I really am trying to stay impartial and just offer up what I see and any clues that the tape may be offering up.

what market?

I didn't participate in today's market. Currently preoccupied with bottling our latest batch of beer (can't wait to try this one!).
There still doesn't seem to be any convincing commitment from the bull/bear camp at this point. Sure we tested new highs on bad news, but we need a solid stance above this long-standing resistance.
The opening of today looked nice and clean. A strong move with nice pullbacks for entry, a mid-day "Holy Grail" and further upside. While the close brought selling back to the day's congestion range. As much as I'd like to see this market tumble down, it just looks as though it can go either way. Are we building a base here?
The Nasdaq, tagging it's 200-day Moving Average, looks ripe for profit-taking/correction.

yawn

What a crappy day. Buy the open, sell the close. A lot of false signals, but the big moves paid off. The mid-day consolidation formed a triangle that broke out to the upside, but didn't find much buying behind it. We ended up closing (SPY) right around the lows of the previous day (for that matter, Friday's low as well; around $85.75). The only thing of interest I have for today is the chart of the SPY daily, and what looks like could be a Diamond Top. I'm also taking note that the ADX is at the lowest reading since September '08. I refer to a previous post regarding these dried-up volatility troughs. The Nasdaq, an index that has shown relative weakness in this counter-trend, is looking like a rising wedge:

double bottom, double top

The behavior of this market these days is a lesson in taking profits quickly. Once you get sucked in things could just turn around instantly. It's like the market is just existing right now to sweep stops and collect the dough. Anyway, the SPY had a "swine-flu" gap down this morning. Once it looks like we're going straight up for a gap-fill, price comes back down, put in a slightly higher low before putting in a screaming wide-range bar. The double-top this morning was a fake-out of sorts too. Although momentum was putting in a bearish divergence, price closed at the high of the day and looked ready to run on a NYSE TICK breakout, and then right back down it came. The end of day was an utter mess; up, down, up, down. Pick a direction already!I marked up this 5-min chart in SPY with entries corresponding with my post from yesterday as guidelines for entry (bear in mind, the entry is based on the close of the indicated candle).The 15-min shows the gap-up from Friday not being given up, while a 20- & 50-EMA looks ready to crossover yet again.

3/10 strategy

I present to you the strategy I employ using the 3/10 macd. If you need to be schooled on the intricacies of the 3/10 I refer you to the following posts:
The basic creationA previous post
Another strategyThe strategy is simple and straightforward and it can be used on any time frame. It does not address exiting trades, for that is largely dependent upon your personal time frame. The charts I use include the 3/10 macd in the sub-chart. The "Slow line" I will refer to is colored white.The "Slow Line" will define your trend. If above the zero-line OR having a positive slope, you're looking to buy dips in the histogram (price). Dips can be defined as a pullback in the histogram from previous readings, and the "dip" would be confirmed by the first move in the opposite direction.
If below the zero-line OR having a negative slope, you're looking to sell peaks in the histogram.
Simple enough, yeah? Or am I making it more complicated with my wordiness?
The chart below should illustrate further. I didn't cherry-pick the chart, I opened my chart analysis and SPY came up automatically so that's what I used. If there are any further questions do feel free to inquire.

fri 04_24

Today felt very much like a Fed day. A slow drift up all day before the news of "stress-test" details. Things got pretty bleak, but bulls aren't giving up this trend. It was a rough start to the day, with choppy sideways behavior after the gap-up. NYSE TICK stayed relatively tame and we could have made some reasonable trades based on TICK breakouts from their down trendline.Here on the 15-min I wanted to highlight a "Slingshot" setup. The blue ellipses with trendlines highlight the concept where price makes a higher low, while momentum records a lower low, leading to a slingshot in price.
The SPY weekly put in a hanging man type candle and was unable to take out the previous week's highs. Looks like it could roll over and at least retrace some of this month's move.The S&P500 index looks a little more bleak with a dragonfly doji.The Q's look healthy, but still looks begging to correct part of this move.
The Dow Jones Industrial index looks more serious in terms of the hanging man syndrome.
Just wanted to include two charts of the weekly Dow chart from the 1929 crash, the point being that these markets can run regardless of the fluff news pieces.
zoomed out for the full effect of the top to bottom

direction anyone?

Seemed like a dull, quiet day in the markets today. It feels kind of peculiar that we're unable to push lower or higher this week by any substantial or technical amount.
SPY price gapped up to pivot point (5-min), turned around (put in a "First Cross" sell, red vertical line) and filled the gap. The retracement from that point brought price to the 20-EMA (inverse holy grail setup) and put in new lows, all the while putting in a bullish momentum divergence in the 3/10 oscillator. The concept with a momentum divergence is to buy the price lows of a higher low (between 9 & 9:30 PST), perhaps once price reclaimed the 20-EMA.
A first cross long entry coincided with a strong bar above the 50-EMA (green vertical line).Looks a little cleaner on this 5-min chart with NYSE TICK in subgraph1.
The 15-min chart highlights a couple of things from today; momentum divergence, price holding on the the lower regression channel, two First Cross entries (red&green vertical lines), and the 20- & 50-EMA nearing yet another crossover. Price continues to flip-flop above and below the $84.33 level. The Dollar faltered after Monday's advance.FXI looks like it's setting up a flag retracement. The swing lows and price look to be setting up a "Slingshot" setup (lower low in momentum coinciding with higher low in price).

right back where we started from

What a weird day. Some wild fluctuations in the NYSE TICK on both ends of the positive/negative spectrum. Today was all about reading the tape, and being quick on your mouse finger (something I am still developing).
Price gapped down to pivot and then just popped. Pretty spectacular move. The retracement after that move I was expecting to move higher than it did, but after the expansion price just rounded off and moved back down to R1.Here was my look at the 5-min SPY today with the TICK in the subgraph. I'm really liking this chart setup.Look at these moves on the 15-min chart. Also notice the momentum divergence on all three swing highs today. Price ended up back down just below the $84.33 consolidation range (the 20- & 50-EMA's heading back down to a crossover; amazing how quickly these moving averages are switching their orientation).After all of that today we're left with a gravestone/shooting star-like doji candle.

Klinger Oscillator

I'm carrying this post over from the blog I kept under a different URL, for the sake of posterity.
I've been using the Klinger Oscillator lately and find it to be very helpful. This oscillator is a construct of volume and is used to determine whether it (volume) is confirming price changes. I just haven't been satisfied trying to read volume bars, OBV, or up/down volume so I trolled through the Tradestation forums and dug this out.
The variables involved in constructing this indicator are Klinger's volume Oscillator with ATR (Average True Range).
The Klinger Oscillator (KO) is intended to show when price changes are confirmed by volume. The computation comes from three types of data:
- the high-low price range (movement)
- volume (force)
- Accumulation/Distribution; where Accumulation is when the sum of the bar's high+low+close is greater than the previous bar. While Distribution is when that sum is less than the previous bar. When the sums are equal the existing trend is maintained.
Volume force is converted into an oscillator that represents the difference between a 34- & 55-period exponential moving average and uses a 13-period trigger.
From what I have read, the KO works well when going with the trend, but not as effective going against it. While it is most useful with price action divergences; especially on new highs/lows in overbought/oversold territory.
So, on the short time-frame (5-min. chart) I'm using an 100-EMA to determine our trend. If price is greater than the 100-EMA the trend is up, vice versa when price is below. If the trend is up you look for the KO to dip deep under the zero line and a cross of the trigger would be a buy signal. If the trend is down, look for the KO to rise up above the zero-line and a crossing of the trigger is a short signal.
This particular oscillator also incorporates an Average True Range length to help in smoothing.
Here are two examples I pulled from price activity in AAPL & FSLR.and more recently from SPY on wednesday April 22

up

Today the SPY (5-min chart) gapped down into S1, rallied up for a gap-fill, and trailed into a falling wedge before expanding all the way up to our pivot (which corresponded with a 50-EMA resistance on our 15-min chart). The pivot point for today is at the same range where price seems to be finding some equilibrium lately. The $84.30 area corresponds with the low of the April 9th gap, where price has on numerous occasions found support.
If you didn't buy the falling wedge breakout; A "First Cross" trigger (green vertical line) was given coming out of the high and tight bull flag (11:45a.m.EST). Another strategy I'm looking to incorporate is the reason I included the DMI in sub-graph2. The concept is to trade the direction of the +/- DMI when ADX ticks up from the low of the day (provided DMI is greater than 25 at the time). In this situation you would have gone long (two white vertical lines) at or near the highs of the day.Looking at the 15-min chart; price has retraced 50% between Friday's highs and today's lows (Fibonacci retracements not shown). It's amazing how quickly those moving averages get back to a bullish orientation lately. Also notice how price chops around that area that corresponds with the April 9th gap-up lows.
Watching the NYSE TICK with SPY price today we can see the open was negative (but not overwhelmingly so) but began to trend up through the morning. Following the high TICK of the day the TICK readings began to fall off, and once the upward trending TICK readings began to fall through it's corresponding trendline it was a good time to start taking profits. With the same approach, once TICK broke out of that downward trendline to the upside (coupled with the generally positive bias to the NYSE TICK) it showed renewed interest in the upside.So, after our little pullback yesterday, price closed near the highs of the day, leaving us with a piercing line candle pattern.

rally relief

As most were expecting today, we worked off some of the Overbought conditions given to us from this month-long rally. You can't really say the bears are back in control yet at this point, as this could still be perceived as merely a pullback. Also of note is that price hasn't yet given up that gap fill left from April 08-09.
These trend days are important to try and identify as soon as possible. With that in mind, I refer to Dr. Brett and his input on the matter. Let's itemize:
1). Price gapped down to S2 on a weak TICK and started dropping lower after 15-minutes.
2). Advance/Decline issues are skewed negatively from the get-go (7:1).
3). The leading weak sectors
XLB
XLE
XLF
going into the day continue their weakness and lead the market downward.
4). Significant buying (NYSE TICK, advance-decline improvement) does not enter the market after taking out S2 and S3.
Here's a look at the 5-min SPY with NYSE TICK in subgraph (the two green horizontal lines being S2 & S3):Some perspective on the Daily shows relief, but nothing more than that at this point.

friday 04_17

Sideways up until around 1 p.m. EST in the SPY. The down-side was limited to pivot support where we got a little double bottom for a more aggressive long entry. Two "First Cross entries, one short (red vertical line) one long (green vertical line). The long was a stop-out, but re-entry three bars later at a better price (around vwap). Price drifted to the highs that coincided with R1, not to take out Feb. 09th highs. I left the volume sub-chart in to show just how obnoxious the end of day volume spikes have been.The 15-min chart gave us a "Slingshot" setup to the long side, where momentum made a lower low while price put in a higher low (also coincides with a consolidating falling wedge left over from end-of-day yesterday).The daily leaves us with an ever-so-slight bearish momentum divergence as we've eked-out higher highs this week. Take note of the slope of the average volume as we've done so as well.Now to the weekly's. For the most part, we closed at resistance. But I'm taking note of something within the momentum oscillator. I wanted to go back to this concept of a "Slingshot" setup; here on the SPY we put in a higher high in momentum, while price was unable to put in a higher high, which could lead to a "Slingshot" in price to the downside.
Same goes for the weekly DIA:
Meanwhile, the Q's and IWM look a lot healthier at this point. The Q's look much healthier, with higher highs in price and momentum over the past few upside swings. It also looks to have a healthier "double-bottom" pattern, with at least some key support at the highs from the beginning of the year (and 21-week EMA).The IWM got above the 21-week EMA, put in ever-so-slight higher highs in price and momentum.

pre-Opex

Remember; (much like many things) trends end in a climax (even counter-trends). The trick is identifying whether price has had that (relative) climax, and so it's vital to wait for price to confirm. With that said, being that it's OPEX tomorrow we might be able to get an idea of whether we're coming to that climax or just trucking along until we could bleed that max pain out of the bears.
Looking at the 60-min SPY, it would be nice to see a gap up to the $87.75 range in some kind of shooting star pattern.Price flirted with $87, and my regression channel's mid-line, but couldn't quite hold on to the highs. This 15-min chart includes a green vertical line during today's session that represents a triggered "First Cross" long entry. Today price gapped up to R1, retraced to Pivot support before trending up the rest of the day. I like to see this pattern of price approaching the opening range highs, retracing to a support area (in this case vwap and a 50-EMA), and breaking resistance (R1) on a strong candle to make a play for a higher resistance mark (R2). Notice the ridiculous volume spike in the last 5-min of over 50-million shares, come on!