Tuesday, the DIA reached the MS1 Level down, shortly before 3 pm. It made a shallow pullback off the level, then closed below the MS1. The SPY and QQQ traded in narrow ranges and neither met a level during Tuesday’s trading day.
The SPY and DIA both gapped down on Monday and continued lower. Neither ETF made a strong attempt to return to Friday’s Low. The QQQ opened lower, met the ML1 within the first 15 minutes of trading and became an intra-day reveal around 11 am. The QQQ continued lower meeting the MS2 and MS3 levels before rallying back to just below the MS1 by close.
The QQQ reached the MS1 Level shortly after the Open and formed a base along the MS1 Level before rallying back towards the Open after 1 PM. ‘Fast Moves’ often come from ‘False Moves.’ The SPY and DIA both gapped up and did not meet conditions for The Intra-Day Momentum Method Levels.
None of the ETFs met the criteria for a High Probability setup during Thursday’s trading day. Due to an error in the reported High of the day for the SPY on Wednesday, it appeared initially that the SPY was a candidate. After the data was corrected it no longer met the criteria for the High Probability setup. The SPY and DIA were both intra-day reversals, based on The Intra-Day Momentum Method. The QQQ reached the MS1 and MS2 Levels down and closed below the Open.
SPY Price Quote Discrepancy
Due to an error in the reported High of the day for the SPY, Thursday’s levels were incorrect. The reported High for Wednesday 10-21-20 was 348.68 and the actual High of intra-day trading was 345.66.
SPY – Corrected Levels
The corrected levels for the SPY were:
- Upward Limit = 343.74
- ML1 = 341.41
According to the correct calculation, the SPY was not a candidate for a High Probability setup. When I post to social media, I use the High Probability Setups and not the standard IDMM calculation.
At the end of the day, the SPY and the DIA became intra-day reversals according to IDMM calculations. Both stocks reached MS1 levels according to the standard calculation, but both were not high probability scenarios. The QQQ reached the MS1 and MS2 levels and closed below the Open.
All three market-based ETFs (DIA, QQQ, and SPY) reached the ML1 level up in early trading, shortly after 9:45 AM. All three for the second consecutive day had very deep pullbacks, testing the Low of the day. For the second consecutive day, all three closed below the Open of the day. Markets that have deep pullbacks are less likely to close above the ML1 level. Strong trending stocks do not have a tendency to pull back all that much.
The SPY tested the Downward Limit @ 342.43, this reduced the chance of a Close above the ML1 level significantly.
The DIA comes very close to reaching the Downside Limit @ 281.81 and closes below the Open of the day, for the second consecutive day.
The QQQ comes within .03 of the Downward Limit and closes below the Open, for the second consecutive day.
The SPY and DIA met the ML1 Level up in mid-afternoon trading around 1:15-1:30 PM. Neither ETF managed to make a move to the next level. The markets made very deep pullbacks that tested the Low of the day. Both the DIA and SPY closed below the Open of the day.
All three market-based ETFs (SPY, QQQ, DIA) reach the MS1 level down in the first hour of trading. These ETFs continued lower and close below the MS3 Level Down during Monday’s trading session. Notice that after reaching the MS1 Level, each market pulled back. However, the pullbacks were not deep. Markets that pull back deep into the trading range are less likely to reach the extended levels.
Stocks that have reached the ML3 Level Up in early trading. This research is designed to demonstrate that the High…
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The Intra-Day Momentum Method is a model for determining the intra-day market direction. The model was developed to find historically significant levels across a large number of stocks.
The model was applied to over 400 stocks from the S & P 500 from 4/2015 to the current day. The statistics are shown below.