Studying the Repeat Pattern that Targets New Highs for SP500

Aug 20, 2014: 12:52 PM CST

I’ve been posting frequently about the potential “Repeat Pattern” in the S&P 500 that charts a price pathway straight up toward new highs.

With price mere points shy of that target, let’s step inside the price action (per reader request) and peek behind the scenes as to what happened during the prior two “Repeat Patterns.”

We’ll start with a broader picture comparison and then drop down individually next:

To get a sense of what we’re seeing in the three charts above, take a moment to start with the prior updates:

“Onwards and Upwards to New Highs for the S&P 500”

Planning a Breakout (from a Repeat Pattern) in the S&P 500

S&P 500 “Breaks on Through to the Other Side

Decision Point for the Dow Jones

With those as your backdrop, now we can look inside the prior retracements and rallies that took price back to the prior high and then beyond it.

All we’re doing is comparing the current (August) pattern with the two most recent patterns in April and January.

In fact, when we pull them apart, we can see the individual movement that created the patterns:

April 2014:

And our current pattern unfolding to the upside (August 2014):

I wanted to highlight a quick comparison both from a planning the near-term future (as we do in the Member Reports each night) and an educational example of how buyers and sellers create chart patterns that repeat (or at least are very similar).

As long as the pattern “holds” and plays out as it did in the past, it allows us to profit from the movement (while being on guard for any “pattern breaks” or unexpected reversals).

Corey Rosenbloom, CMT
Afraid to Trade.com

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

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

9 Comments

9 Responses to “Studying the Repeat Pattern that Targets New Highs for SP500”

  1. Faweiz Blog ?? – Studying the Repeat Pattern that Targets New Highs for SP500 Says:

    […] @faweiz // Afraid to Trade.com Blog […]

  2. denali92 Says:

    There have DEFINITELY been a lot of repeat patterns this year – bottom the week before opex (except Jan), pull back the week after opex, rally in to employment, pull back post employment and then rally in to opex again….

    Has not happened with that exact script every month…. but almost every month…
    -Jan: Employment was a week later
    -Feb: Fall was so big… there was not even a discernible post opex pullback
    -March: Played it perfectly
    April: Played it perfectly
    May: Close, but no pullback post opex
    June: Limited pullbacks, but did play out
    July: Spot on
    August: Employment was a low – so no…. but bottomed pre opex….

    Now, the next big question – is this February all over or more like March, April and June….

    Most of this year's pattern has been seen before during this bull, EXCEPT for the super consistent pre opex week bottom – that is a new one…..

    THANKS for all of your excellent posts!

    -D

  3. Color Keltner Channel Chart into Highs for SP500 and NASDAQ | Afraid to Trade.com Blog Says:

    […] Studying the “Repeat Pattern” that Forecasts New Highs for the S&P 500 (achieved!) […]

  4. August 21Stock Market Update with Trending Stock Scan | Afraid to Trade.com Blog Says:

    […] Studying the “Repeat Pattern” that Forecasts New Highs for the S&P 500 (achieved!) […]

  5. August 25 Breakout Market Update and Stock Scan | Afraid to Trade.com Blog Says:

    […] Studying the “Repeat Pattern” that Forecasts New Highs for the S&P 500 (achieved!) […]

  6. August 25 Breakout Market Update and Stock Scan - Trading Your Own WayTrading Your Own Way Says:

    […] Studying the “Repeat Pattern” that Forecasts New Highs for the S&P 500 (achieved!) […]

  7. Current Market Rally Echoes a Pattern from the Past | Afraid to Trade.com Blog Says:

    […] Studying the “Repeat Pattern” that Forecasts New Highs for the S&P 500 (achieved!) […]

  8. Nevill Says:

    It is really important that we look at these factors before entering into a trade because once it is done we are assured of no point of return. I am trading with OctaFX and using their wonderful platform cTrader, it is one of the best I have ever traded in and also it is also a platform that is built for ECN lovers like me and we get amazing trading environment with never having to face any delay with trade or requotes.

  9. Hamid Says:

    Yes, there is no second thought on this, if we want to be
    successful or become expert traders than we must look at all angles only then
    we will be able to understand fully how market works. I also trade with OctaFX,
    it is definitely one of the most wanting broker at the moment in Forex
    industry, it has amazing conditions with low spread of just 0.2 pips, high
    leverage up to 1.500 and also ideal customer service that is available 24/7.