Midas Analysis

Trading and Technical Analysis with MIDAS

Support Curves with TopFinder on S&P (SPY ETF)

 

The chart above shows a 3 minute bar chart of the SPY ETF.  It includes a set of 3 MIDAS support curves, followed by a TopFinder curve.

 

The first S1 curve was launched at the low of the day.  30 mins later it caught the first pullback accurately.  From the pullback, we launch a new S2 curve.  Price moves up and then returns to retest.   From the next pullback, we launch an S3 curve.  Additionally, we launch a TopFinder curve, and adjust it to fit the next few bars.  Afterward, the closest we come to a pullback is at 7:45.  Fit to this low, TopFinder tracks the trend to the correct bar.

 

Several rectangles have been drawn to illustrate interactions between price and S curves later in the day.  The first box shows two bounces off of S3, which is finally broken around 9:30.  Price moves down to test S2, but bounces back up and goes through S3.

 

 

MIDAS with FOREX – EUR / USD

 

MIDAS can be used in nearly any market.  In the example above, we have today’s euro/dollar market on FOREX, plotted as 987 tick bars.  It shows a single MIDAS support curve along with the TopFinder curve.

 

As price moves away from the low of the day, a MIDAS support curve can be launched.  About 30 mins later we see the first pullback.  Since the price does not come all the way back to the S curve, we can tell it’s an accelerated trend.  In this case we’d add a TopFinder curve from the same launch point, and adjust its volume fuel so the TopFinder intercepts the pullback.

 

TopFinder is successful here at indicating the near top of the market.  When TopFinder reaches the end, it’s a good time to sell or to use the curve as a stop.

 

Also, notice the original S curve is finally tested about 3 hours after it was launched.  The retest is successful, but price moves into a sideways market.