Three Push and Wedge on SP 500

Apr 17, 2009: 1:12 PM CST

A new structure has developed, which is known as the “Three Push Pattern” as price continues to ‘wedge’ itself into a rising consolidation.  Let’s see the current S&P 500 structure mid-day on the 60min chart.

Price has now rallied to the peak of the converging trendlines that are forming a possible bearish rising wedge, which places it at a “make or break” price point we all need to watch very closely.

I wanted to get this post out quickly to show the developing structure, which has now formed a “Three Push” Reversal Pattern.  Notice the three new price highs that formed on a triple-swing negative momentum divergence in the 3/10 Oscillator.

The expected play at a minimum is for a retest of the rising trendline around 850, but aggressive traders might want to hold on for a larger target should price weasel its way out of the wedge formation, which would be quite bearish.  Should price continue to rally and break outside the wedge, the stop-loss point would be clearly defined.

Do your own analysis and see what else you might be able to glean from the current price structure.

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”

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Comments
  • Anonymous

    NP.
    Since we closed today below the 848 level we can consider that pattern complete and get bear minded again.
    Also, I think there's a bug in the URL handing of the blog
    When I try to post the stockcharts link the $GOLD it keeps showing up as GOLD.

  • Anon #32,

    Thanks for clarifying - sounds great!

  • DaveB

    I took some shorts Friday afternoon, I figure I can at least play for a test of the "cradle" around spx 820. Although a breakdown of the rising wedge would suggest a deeper retracement, back below 800.

  • Anonymous

    Of course there will be divergence on the macd. Each push in a wedge is smaller. That's why it is a wedge.

  • Schweizer

    Bollinger Bands on the weekly $VIX are squeezing, and price is already outside it, so something is gonna happen soon.

    Thanks for your work.

    By the way the Pi Cycle turn date, with a minor cycle 2.15 yrs long, is today.

    This model, developed in 1999 nailed model the following dates as major turning points: September 2000 (S&P and DOW market top), November 2002 (S&P and DOW market bottom) and, most recently, February 27th, 2007 (the credit bubble popped). We are now exactly 2.15 yrs later, and about to likely take another turn.

    Hmmm ....

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