Perfect Intraday Elliott Wave Lessons from SPY June 25

Jun 25, 2009: 6:00 PM CST

What a day!  We got an unexpected “Type II Trend Day” up which just so happened to form a text-book complete Elliott Wave pattern.  Let’s take a look and learn from some of today’s lessons, including a “Three Push” pattern and Bull Flag.

Mid-day, I published a post on the “Perfect Bull Flag Lesson” so take a look at it for additional lessons.

The thing that should jump off the chart at you is the “Three Push” reversal pattern combined with the Elliott Structure all day.

When price makes three subsequent highs on lower peaks in the 3/10 Oscillator, that’s a very bad sign (for bulls).  In so doing, you should also be able to count out a simple 5-wave (1 up, 2 down, 3 up, 4 down, 5 up) pattern based on Elliott Wave Theory, which helps in trading and analysis – you don’t have to get complex with Elliott to be effective as an extra trading tool.

What’s nice about this example is that each retracement/pullback stopped (with nice dojis) at the rising 20 EMA, giving you a low-risk, high probability entry on Waves 2 and 4.  The Bull Flag that I highlighted and traded earlier was an extra bonus.

Remember from my free educational post on “Best Trades in the Elliott Structure” that the best trades come from buying a suspected Wave 4 and shorting at the end of Wave 5 (which should have some type of divergence).

In this case, we had a “Three Push” Negative Momentum Divergence along with a negative TICK Divergence (not shown).

This is how “structure” helps determine the trading strategy and trade opportunities you take – not based on indicators, but based on concepts.

For my advanced readers who love Elliott Wave, or newer traders interested in a “wow” moment, let’s step inside the price to see the complete subdivisions on the 1-min chart (in near-perfect Elliott Wave fashion – a concept that was first introduced to us in the 1930s!):

(click for full-size image)

As I mentioned in the “Wave Labeling” Cheat Sheet, Impulse Waves (1, 3, and 5) subdivide into their own fractal 5 waves while Corrective Waves (2 and 4) subdivide into 3 wave affairs.

It never ceases to amaze me how applicable Elliott Wave is in today’s markets.  Don’t use it as a stand-alone strategy – overlay what you already know with what patterns you see forming and go for the “weight of the evidence” model instead of using a single tool.

Additional intraday posts with Elliott Wave Examples/Lessons:

Elliott Wave Lessons and Structure in SDS

Multiple Confluences Mark Intraday Low Lesson

Perfect Elliott Wave Intraday Example and Lesson May 22

Please join me as the rebroadcasts my presentation “Idealized Trade Set-ups for the Intraday Trader” on July 1st at noon EST – I’ll be there on a free live chat to answer questions through the presentation.

Corey Rosenbloom, CMT
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4 Responses to “Perfect Intraday Elliott Wave Lessons from SPY June 25”

  1. panepon Says:

    Thank you for today's post.
    Especially today is very clear to understand your comments.

  2. Osso Says:

    Hi there !!!! have been reading several posts from you,CR, and appreciate the TA quality of them all. Really. I was wondering if you day trade,or swing trade or trade, anyway, and if you post set ups. Where would that be…???? tks and congrats. !!!!

  3. tom Says:

    Another perfect impulse sir, u have a trained eye

  4. pipercolt Says:

    Another perfect impulse sir, u have a trained eye