By my own confession, I am a very âgreenâ student of Price-Volume-Histogram analysis, interested in the comments/observations of ET members already immersed in this dark art: Hereâs my take on todayâs outlook for the SPY open: ⢠The 6 (and 7) trading day histogram shows price fairly balanced about a POC at approx $117.50, with yesterdayâs up day being another test of the balance area highs ⢠1 day histograms on both 10/13/2010 and 10/20/2010 show price failing to push significantly above $118.50 ($118.60 on 10/13/2010) (resistance) ⢠1 day histograms on both 10/12/2010 and 10/19/2010 show daily POCs (here 6 day support) at $16.40 - $16.50. So, hereâs a call .... If SPY opens today (cash open @ 09h30 EST) between $118.20 (yesterdayâs POC) and $118.50, expect a test of the $118.60 high. Here are two potential trades to capture this: 1. If price opens between $118.20 - $118.30, place Buy Limit order @ $118.25 (Target @ â$118.55â; Stop @ $118.05). Cancel this order if price hits the target, but you didn't get filled. 2. Reverse on successful exit (or alternatively, just take this second part if price opens between $118.20 - $118.30, but moves too quickly for you to enter the trade above, or if price opens between $118.30 - $118.50), i.e. place Sell Limit order @ $118.55 (Target @ â$118.20â; Stop @ $118.70) Comments (BEFORE the open ) please [Bigger picture, assuming the 08h30 EST news release is not better than expectation (and assuming Bernanke doesnât start rumours today about QEs 3 and 4!), I expect a downward bias for the next few days at least until price is in the region of the $16.40 - $16.50 level. However ... if price does break above $118.70 today, buy the breakout .... target $0.30 breakout move, stop $0.15?]
Trade â1â didnât happen (SPY opened at $118.40). Trade â2â entry filled at $118.55 @ 09h39:30 EST, stopped out at $118.69 @ 10h08:39 âBreak-outâ trade entered at $118.69 @ 10h08:39, target $118.99 reached at 10h14:07 Lost 14 ticks Won 30 ticks Net 16 ticks (less commissions)