Intraday Highs formed on TICK Divergence and Three Push

Apr 2, 2009: 4:14 PM CST

Earlier this afternoon, I updated Twitter followers to the Triple-Swing Negative TICK divergence that set-up into the noon highs and a few people requested that I show that on a chart.  This post reflects the intraday action of April 2nd which shows a three-swing negative TICK divergence, three push pattern, and interesting Elliott Wave structure that developed throughout the day.  Let’s see all that.

The day began with a large-scale overnight gap thanks mainly to the change in Mark-to-Market accounting rules, but the day did not resolve as a Trend Day.

There was a “Three Push” reversal pattern that developed off a three-swing negative momentum divergence (not shown), but the educational focus of this post is the Three-Swing Negative TICK Divergence.  The large blue numbers reflect the “Three Push” pattern.

I’m showing the TICK as candle bars in the lower chart to see the absolute highs and lows and then I’ve overlaid a 5 period simple moving average of the TICKs (5-minute bars) to get a little more information and smooth out the data.

Notice that each push higher in price formed on a lower high in BOTH the TICK and the 5-period SMA of the TICK (which I have highlighted in red).  Look closely to see the TICK making new lows on each swing down.

Moreover, I’ve included an Elliott Wave (fractal) Count in purple which shows not only an idealized 5-wave progression into the intraday highs, but also an ideal “ABC” Corrective move which took place after the high was formed.

Look towards the end of the day (“C” Wave) at the long upper shadows (candles) that formed around 2:30 CST (as price failed to rise above the falling 20 EMA).  Those were bearish hints of lower prices yet to come as the “C” Wave progressed.  There were also shooting stars and dojis that could have enhanced analysis.

Continue looking into today’s structure to see what else you can learn from the price patterns that developed.

Corey Rosenbloom
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Travel to the LA Trader’s Expo in June to hear Corey speak on “Idealized Trades for Intraday Traders”

2 Comments

2 Responses to “Intraday Highs formed on TICK Divergence and Three Push”

  1. gawed Says:

    Hey Corey,

    I guess you’re still using the 3/10 right? what’s the reason behind this new tick? it’s not something one can easily find in their chart softwares is it? have you already made a post about this new indicator, i was a away for a bit and would love to learn a bit more about it.

  2. Corey Rosenbloom Says:

    Of course, but oscillators tend to fail on Trend Days.

    I’m using this as a Teaching Moment to discuss the TICK.

    The TICK is the NYSE stocks making upticks (each moment) vs NYSE stocks making downticks (each moment). It’s a breadth indicator that should be standard with all charting platforms because it is a very important indicator… but it’s not really an indicator – it’s more like an index showing strength/weakness across a broad basket of stocks.