Excellent Intraday Three Push Example Aug 7

Aug 7, 2009: 4:04 PM CST

With the monthly “Jobs Report” coming in better than expected (the unemployment rate actually DECLINED in July, when the consensus was for an increase of anywhere from 0.1% to 0.3%), the market pushed higher from the open into what resembled a Trend Day.  However, by mid-day, the S&P 500 challenged overhead resistance and a “Three Push” negative divergence pattern (as well as an Elliott Wave fractal) formed at the highs.  Let’s take a quick look.

This time we’re taking a look at the @ES mini-S&P 500  futures contract (for September) so that we  can see the upward surge from the better than expected Jobs Report announcement (which I mentioned last night could certainly be a market mover).

After the initial impulse to the upside, the bias should have been to the long-side with the possibility of a Trend Day on the horizon.

We then formed three symmetrical “pushes” into the afternoon highs which formed a “Make or Break” Pattern.

The 3/10 Oscillator showed a crisp and clean three-swing divergence (as each new price high was made, the oscillator formed lower highs, which served as non-confirmations of the afternoon highs).  This was a sign of weakness, which should have put us in caution or “wait and see” mode to determine if bulls could keep pushing prices higher… they ultimately could not.

The “Three Push” pattern (as described in the Education Section) is a powerful reversal pattern with very low risk and high reward (opportunity) in the event that the final push does lead to the intraday high – which was the case today.  A stop is placed just above the high and if you see bearish candles at the third peak, that’s even more evidence odds favor a reversal.

In this case, we saw a simple 5-min shooting star at the highs.

If you look closely, a bearish Cradle Trade formed into the close of the session (these times are in Central/Chicago Time).

I describe how to identify how the day developed, and note key opportunities/trade set-ups as well as how to manage them in today’s “Idealized Trade” Daily Summary report – please check out the link for subscription and additional information.

I also describe the Elliott Wave pattern I labeled above, as well as the Bearish Rising Wedge that terminated at the final high of the day.

The bullish report was favorable for the bulls, but I certainly expected the welcome news to produce a full Trend Day up all day long, squeezing shorts.  As I mentioned last night, the two major resistance levels to watch are the 1,007 and 1,014 area… we closed right in the middle of these areas today.

To keep the bullish party going, bulls need to close firmly above 1,014 (preferably 1,020) and if not, then bears would certainly love to take some revenge against this powerful rally that began in early March!

Corey Rosenbloom, CMT

9 Comments

9 Responses to “Excellent Intraday Three Push Example Aug 7”

  1. Trend_Trader Says:

    didn't the S&P close at 1010? so in between the two major resistance levels

  2. Corey Rosenbloom, CMT Says:

    Thanks! I've updated the closing lines. Pretty much right in the middle which almost seems like a taunt to the bears.

  3. verniman Says:

    Which is most important? SPX or mini?
    Goldman's Hal 9000 follow the mini?

  4. verniman Says:

    Which index we have to follow? SPX or Mini?
    Which do you prefer?

  5. j0sh1ngU Says:

    what's the oscillator. 3/10/6 ?

  6. PhantomVC Says:

    Corey, congratulations!

    Another great example about “Threee Push” pattern.

    Nobody can pay what you do in order to teach investors community.

    Have a good week end!

  7. JeffreyLin Says:

    haha I saw this pattern playing out today and thought of u.

  8. Matt Says:

    Hi Corey, I know for your charts you always use the 20/50 day EMA, and 200 day SMA. On the 5 minute charts are you using the 200 day SMA as well? Thanks!

  9. Bhupesh Says:

    Corey – please provide an analysis for Nifty 10 Aug