Possible Mirror Image Pattern on Intraday SP500 SPY Mar 19

Mar 19, 2010: 1:04 PM CST

I always enjoy highlighting ‘mirror image’ or ‘measured move’ price patterns on charts, and we have the potential for a resolution to the downside to test prior support if the current price structure completes the ‘reflection’ portion of the pattern.

Main idea – let’s watch the price closely over the next few days to see if this chart pattern completes as expected:

First, I’m showing a completed “Mirror Image” – also called a “Rounded Arc” or “Rounded Reversal” that formed an almost identical move down as the prior move up.

This occurred from March 12th to 15th.

“Mirror Image Foldback” patters aren’t common or well-known patterns to the general trading community – certainly not as familiar as a flag or head and shoulders pattern – but they are price chart patterns nonetheless.

One could even envision a bear flag forming now should price break under the $115.75 SPY level which would project a ‘measured move’ down to the prior support at $114.70.

Still, if anything, it’s worth being aware that price could fulfill the bear flag (with a break under the current rising trendline) or complete the larger pattern of the “Mirror Image” pattern just like what happened early last week.

No pattern is perfect or guaranteed, but price patterns can give potential ‘pathways to the future’ is the present follows past precedent (meaning, if the pattern plays out as expected).

The pattern would be disconfirmed or ‘broken’ with a continued rally higher from here.  Remember, we want to see the right side of the chart look as identical as possible to the left side – that would fulfill the pattern.

Should be interesting!

Corey Rosenbloom, CMT
Afraid to Trade.com

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

5 Comments

5 Responses to “Possible Mirror Image Pattern on Intraday SP500 SPY Mar 19”

  1. terlyn Says:

    On a 3-month daily chart a bearish engulfing pattern is forming after two dojis along with a negative momentum divergence.

  2. TheYenGuy Says:

    Corey, great and timely post: you have taken a detailed snapshot of the current market top.

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  3. Teich50 Says:

    Should your charting account for the SPY's dividend last week? One would think the answer is affirmative, since we account for stock splits, etc.

  4. DavidDT Says:

    quite “entertainable” idea! And 114 will play well with TTW projected low of SPX 1140

  5. DavidDT Says:

    quite “entertainable” idea! And 114 will play well with TTW projected low of SPX 1140