Intraday Elliott and Normal Chart Opportunities in the SPY July 7

Jul 7, 2009: 7:03 PM CST

Today’s price action held a lot of lessons for apt traders – let’s take a look at the SPY (US Market proxy) and the intraday chart to see what quick lessons we can learn from today’s price action – technically a Trend Day Down.

SPY 5-min normal structure:

Hitting the highlights, we see how the 3/10 Momentum oscillator – in terms of new momentum lows and divergences – can help us confirm or set-up trades, particularly into EMA overhead resistance on a day that shaped up to be a Trend Day … not from the open but towards the middle section of the day.

The ‘best’ trade of the day in my opinion came at the 11:00am pullback two-dojis off the 10:00am New Momentum Low – the risk (stop) was close and the trade offered a good probability of making a new low – which it did.

We formed another new momentum and price low at 11:45 which set-up another quick short trade that made a new price low on a positive Momentum and TICK (not shown) divergence – TICK divergences carry more weight than momentum divergences.

Price formed a larger than expected retracement off these levels but formed additional dojis just above the 50 EMA (I would have preferred price to have stayed beneath the 50 EMA!) and then we plunged to new lows particularly when price broke the 12:30pm lows at $88.70.  A flag formed into the close.

I save the bulk of the analysis and set-ups for subscribers to the new Idealized Trades service which is now available, and also provides levels/structure to watch for the upcoming day (how today’s structure carries forward).

Let’s take a quick look – for those so inclined – at today’s dual-fractal Elliott Wave pattern.

SPY 5-min ‘enhanced’ Elliott structure:

In the report, I teach how to recognize and confirm possible wave counts – particularly with regard to new momentum/price lows and third waves (look closely at the labeled 3rd waves) and then divergences (reversals) up off final 5th waves.

Today’s structure provided an excellent example of divergences and Elliott Wave as an overlaying tool to help assess price moves and possible opportunities.  Review my prior post on “Best Trades to Take in the Elliott Wave Structure” as well as my free resources on Elliott Wave.

Please check out the new premium service – today’s report goes into six PDF pages of highlighting the TICK, daily S&P 500, 15-min SPY, and of course the 5 and 1 min SPY for lessons, clues for the future, and insights to drill these concepts home and help you recognize these patterns quicker in real time and profit from them – armed with new deep level knowledge on expert trading strategies.

Corey Rosenbloom, CMT

8 Comments

8 Responses to “Intraday Elliott and Normal Chart Opportunities in the SPY July 7”

  1. ANIRUDH SETHI Says:

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  2. pipercolt Says:

    excellent breakdown for sure but come on, would anyone expect a second impulsive wave in the afternoon. and certainly not another bearish wave after that mindblowing rally yesterday in the last hour.

  3. James Says:

    Excellent analysis. I never picked up on the Elliott structure but caught the the 3/10 and tick divergences on your W5. It gave a long trade with a profit-taking target of the 50ema.

    The next trade I saw was after the new momentum/tick lows at 3:30. I was looking for a retracement to the 20ema and then to short into the close. But it didn't get as close as I hoped it would to the 20ema and I was left sitting on the sideline.

  4. Corey Rosenbloom, CMT Says:

    James,

    It takes a lot of practice and repeatedly seeing intraday wave counts to pick up on them in real time – I miss certain aspects which is why I find the end-of-day analysis so helpful. All about repetition and the “a-ha” moments you get when your mind is clear and free of the intraday pressures when price is moving.

    Yes, we have to jump in quickly if price starts to reverse just shy of a resistance target – better to get on at least a small part of the position than missing it entirely IF we're expecting it (fine to miss if we're not waiting for it, but at least get some on if you're waiting for a trade and it triggers early).

  5. Corey Rosenbloom, CMT Says:

    Piper,

    I suspect advanced Elliotticians would have – it was a simple “Zig-Zag” correction structure or perhaps Waves 1 and 3 of a down-impulse coming off the June high (or some fractal there-of).

    One thing to be certain is that price can move farther than expected, and we're in a down swing, so we had to get to the 880 supportline some how – the larger structure could have clued us in.

    For me, it's not about perfection in Elliott wave – it's about seeing that new momentum/price low, looking back and seeing “Oh, well that looks like a 1 and 2” and then waiting to short once the 4th wave comes into resistance to play aggressively on the 5th wave. Then play counter-trend. That's how Elliott helps me.

  6. James Says:

    Excellent analysis. I never picked up on the Elliott structure but caught the the 3/10 and tick divergences on your W5. It gave a long trade with a profit-taking target of the 50ema.

    The next trade I saw was after the new momentum/tick lows at 3:30. I was looking for a retracement to the 20ema and then to short into the close. But it didn't get as close as I hoped it would to the 20ema and I was left sitting on the sideline.

  7. Corey Rosenbloom, CMT Says:

    James,

    It takes a lot of practice and repeatedly seeing intraday wave counts to pick up on them in real time – I miss certain aspects which is why I find the end-of-day analysis so helpful. All about repetition and the “a-ha” moments you get when your mind is clear and free of the intraday pressures when price is moving.

    Yes, we have to jump in quickly if price starts to reverse just shy of a resistance target – better to get on at least a small part of the position than missing it entirely IF we're expecting it (fine to miss if we're not waiting for it, but at least get some on if you're waiting for a trade and it triggers early).

  8. Corey Rosenbloom, CMT Says:

    Piper,

    I suspect advanced Elliotticians would have – it was a simple “Zig-Zag” correction structure or perhaps Waves 1 and 3 of a down-impulse coming off the June high (or some fractal there-of).

    One thing to be certain is that price can move farther than expected, and we're in a down swing, so we had to get to the 880 supportline some how – the larger structure could have clued us in.

    For me, it's not about perfection in Elliott wave – it's about seeing that new momentum/price low, looking back and seeing “Oh, well that looks like a 1 and 2” and then waiting to short once the 4th wave comes into resistance to play aggressively on the 5th wave. Then play counter-trend. That's how Elliott helps me.