Wed. 12_05

Today's trade:

A key for the above chart to define the horizontal lines and dots.  For further explanation, see this link:  

Stepped away in the late morning, so I didn't trade after the short position in the morning.  Long "triggers" were late, so using that process that I emphasize throughout this blog would have been challenging.  Trading the squeeze was all about reading the price behavior today.

Higher time frame;
     Anticipating the daily 3/10 macd fast line ticking up we would be looking for the faster time frame (65min) 3/10 macd fast line to pull into the slow line and tick up.  Otherwise, the reverse could set up a steeper correction short opportunity.

The QQQ higher time frame has set up a little cleaner in regards to the recent "pullback"
The initial entry would have been the close on Monday.  Tuesday formed a tight flag and this morning reached the 50% projection.

  The second down arrow on the 3/10 macd indicates the 4d-4c criteria short setup (often seen as a bear flag), to "anticipate" this we could have factored in another (faster) time frame to be paired with the 65min, like in the chart below:

So while the 65-min was used to anticipate the pullback in the daily chart, the 20-minute chart was used to anticipate the bear flag breakdown entry on the 65-minute chart.  Had you built the position and had an original entry ($65.71) as indicated on the first 65min chart above, we could have considered adding to that position after the trigger on the 20-min chart, giving us an average price of $65.51 with a primary target (50% Fib. projection of bear flag) of $64.63.

As an aside, it's worth watching this ascending triangle on the XLF