SPY Intraday Divergence and Elliott Summary July 8

Jul 8, 2009: 4:37 PM CST

What a day!  Today officially ended as a “Rounded Reversal” or Failed Trend Day Down, but I wanted to take a moment to highlight the numerous TICK and Momentum divergences and also show how overlaying basic Elliott Waves can help you in your intraday trading strategies.  This is one chart from today’s “Idealzied Trades” Daily Summary/Trading Reports.


(You’ll need to click for full detail)

Without going into much detail (I describe the chart along with more simple/basic charts) in the report, but the main idea is to drive home the point how both Momentum and TICK Divergences help set-up good trade locations with tight stops and a greater than normal expectancy of a winning scalp trade.

It’s also showing how the 1-min structure can assist you in making trading decisions off the 5-min chart (or even 15-min chart) whether you trade ETFs or @ES or @YM futures (which I would recommend and do myself).  The reason I show the SPY chart is because it is far more watched and accessible than futures charts for most readers.

You can even use the index structure to assist you in trading common stocks intraday – for example, when the SPY (S&P 500) comes into an inflection point or is on a buy swing, you can use it as a confirmation for an entry into the stock(s) you are trading.

That being said, notice how the Elliott Wave count – no, we’re not trying to be 100% precise, particularly intraday in real-time – confirms these momentum lows and divergences.

As I’ve shown and traded many times, we often get a new momentum and new TICK low in the 3rd wave (which is often the starting point) and then we wait for the 4th wave to pullback into resistance (or support) – hopefully forming a reversal candle) before entering perhaps aggressively to play for the final 5th wave and then reversing to play the corrective move.

I explain this further in a basic level on the Elliott Wave Educational Page.

Today’s summary report highlights three key very low risk, high probability trades – I walk you through the identification, set-up, entry, targets, exits, and management. I also discuss three versions of the 5-minute chart (beginning with the ‘easy’ stuff – basics that appeal to most traders) and then move to this chart, which is the advanced materials.

I then highlight analysis on the Daily Chart for structure, levels to watch going forward, and then annotate a 60-minute S&P 500 chart to discuss what’s likely in store for the upcoming trading days – highlighting a key Fibonacci Extension we’ve come into, along with larger timeframe divergences that seem to be eluding some traders.  Tonight’s report is six full PDF pages as are most nights.

This is a new service which is introduced at only $27.00 per month, and you also have access to all the archived days that began in April 2009 to read and study at your leisure.  I highlight the same set-ups, opportunities, how to recognize structure, how to use non-correlated strategies to find entries, targets, etc.

It’s both a unique educational service and a “watch these levels in the days and weeks ahead” service.

I hope you’ll join me in this new and fun endeavor!  Click over to the Premium section or learn more about the Idealized Trades to register and begin receiving these informational summaries.

The more times you see these patterns and professional lessons that repeat regularly, the better you’ll be to trade them in real time when they inevitably set-up again.

Corey Rosenbloom, CMT

4 Comments

4 Responses to “SPY Intraday Divergence and Elliott Summary July 8”

  1. j0sh1ngU Says:

    I saw the 1-5 up and ABC up. This count carries over to tomorrow and we should expect 1-5 on down. Are you able to determine the mini 1-5 after the 1-5 ended real time? That movement confused me a bit and I was wondering if you had an easier method of recognizing it

  2. Corey Rosenbloom, CMT Says:

    Josh,

    Most everything else worked well except the mid-day correction… or as I referred to it jokingly, the “ABC that wouldn't stop!”

    I'm sure there's some deep level way to count it in hindsight but I'm more concerned with the pattern as described above and applied in real-time: Identifying a 3rd wave, waiting out the 4th wave pullback, then getting short on the 5th wave when momentum, volume, the TICK, etc are confirming. I'll never make a decision off Elliott or any single item in isolation – I'm concerned with confluence.

  3. j0sh1ngU Says:

    I saw the 1-5 up and ABC up. This count carries over to tomorrow and we should expect 1-5 on down. Are you able to determine the mini 1-5 after the 1-5 ended real time? That movement confused me a bit and I was wondering if you had an easier method of recognizing it. Thanks

  4. Corey Rosenbloom, CMT Says:

    Josh,

    Most everything else worked well except the mid-day correction… or as I referred to it jokingly, the “ABC that wouldn't stop!”

    I'm sure there's some deep level way to count it in hindsight but I'm more concerned with the pattern as described above and applied in real-time: Identifying a 3rd wave, waiting out the 4th wave pullback, then getting short on the 5th wave when momentum, volume, the TICK, etc are confirming. I'll never make a decision off Elliott or any single item in isolation – I'm concerned with confluence.