Great SPY Intraday Rounded Reversal and TICK Divergence Nov 17

Nov 17, 2009: 3:54 PM CST

November 17th’s intraday SPY (and other Index ETF and futures) action gave us an excellent example of the “Rounded Reversal” structure along with a positive TICK and multi-swing positive momentum divergence marking the absolute low of the day and forecasting an intraday price reversal.  Sound complex?  Let’s look at it step-by-step.


(Click for full-size image)

I’ll discuss this in more detail along with other intraday lessons and trading opportunities for reference in today’s Subscriber Idealized Trades” report, but I’ll hit the quick highlights here.

As price began making lower lows on the session, the 3/10 Momentum Oscillator (information via this link) formed what appeared to be a triple-swing positive momentum divergence into the absolute lows after 10:00 CST.

That’s a non-confirmation of price lows and hints of a reversal, but there’s something that’s much more ‘powerful’ when it forms divergences in terms of forecasting – the NYSE TICK.

As seen by comparing price lows to TICK lows in the highlighted zone, as the SPY made its intraday swing low at $111.30, the TICK – a “Market Internals” Indicator – failed to form a new intraday low, and in fact formed its own clean and clear positive divergence.

While nothing is ever guaranteed, an absolute intraday price low on a multi-swing positive oscillator divergence which is met with a distinct positive TICK divergence places the odds strongly in favor of an intraday price (structure) reversal… and at least gives the opportunity for a short-term long (buy) trade.

For those so inclined to the ‘advanced’ work, notice that a 5-wave fractal move concluded as well at these intraday lows.

As price broke to higher highs and higher lows, as well as breaking a trendline (along with the 50 period EMA on the 5-min chart), the “Rounded Reversal” was officially confirmed and the upward bias was now officially in place, setting up retracement trades.

This is the kind of example and lessons that I will be discussing in this Thursday’s free Webinar

Best Trades to Take Using TICK and Momentum

You can register now at the MoneyShow.com to see live at the Las Vegas Expo this Thursday right after market close at 4:15 EST.

For more information as to the outline of the presentation, see my featured blog post on the presentation.

I hope to see you there!

Corey Rosenbloom, CMT

7 Comments

7 Responses to “Great SPY Intraday Rounded Reversal and TICK Divergence Nov 17”

  1. Vince B Says:

    Not to mention there is a HL, HH, HL, and a take out of the HH and a cross of 20MA above the 50MA just before the confirmation point.

  2. Corey Rosenbloom, CMT Says:

    That's right Vince!

    The price structure had turned to official up-trend on the 1-min chart after the 'advanced' technicals forecast a potential reversal.

    With so much bullish wind at your back and the structure officially up, that set-up some good retracement (buy pullback) trades which worked well into the close.

  3. Vince B Says:

    Not to mention there is a HL, HH, HL, and a take out of the HH and a cross of 20MA above the 50MA just before the confirmation point.

  4. Corey Rosenbloom, CMT Says:

    That's right Vince!

    The price structure had turned to official up-trend on the 1-min chart after the 'advanced' technicals forecast a potential reversal.

    With so much bullish wind at your back and the structure officially up, that set-up some good retracement (buy pullback) trades which worked well into the close.

  5. One of the Best Intraday SPY Rounded Reversal Examples | Afraid to Trade.com Blog Says:

    […] November 17:  Great Intraday Example of Rounded Reversal and TICK Divergence […]

  6. One of the Best Intraday SPY Rounded Reversal Examples | Penny Stock Trading System Blog Says:

    […] November 17:  Great Intraday Example of Rounded Reversal and TICK Divergence […]

  7. Fatah Says:

    Your post has moved the debate fodrwra. Thanks for sharing!