Two Examples of Exact Intraday SPY Pattern Repetition

Aug 18, 2010: 6:50 PM CST

Is it important to study today’s charts for insights and lessons to learn from the day’s structure and opportunities?

Absolutely.  Not only can you replay your performance and pinpoint where you could have traded better, but you’ll increase your pattern recognition and trade set-up skills by seeing these classic patterns repeat.

Case in point, in August there have been a pair of two days that are almost identical in every way – from the open to the close.

Let’s take a look at these “Pair Days” and learn a bit more about them.

First, we had a direct repetition on August 16 that we saw on August 12:

(Click for full-size image)

I won’t go into full detail – that’s what I do in my daily reports for members of the Idealized Trades summary reports – but will highlight the structural similarities (that sounds like an engineering term!) between the two days.

First, we had a downside gap from the prior day’s close.  In both sessions, the market pushed higher in break-neck speed to fill the gap, doing so successfully on the 16th but falling just shy on the 12th.

From there, we had classic dual negative divergences in momentum and TICK (internals) that gave way to the intraday high and “Rounded Reversal” pattern – one of my favorites.

Price then fell into the afternoon session as expected… but wait!  We had a sudden and unexpected break of the arc formation and rally into the close.

It’s almost like an omniscient and omnipotent hand traced out these full-day patterns – but remember that chart patterns – and price for that matter – are determined by aggregate supply and demand of all involved as they (generally) cycle through greed and fear.

So if that wasn’t interesting enough, we had a direct repeat today of what took place yesterday, as seen below:

Today’s repeat pattern wasn’t as clear as the prior, but compare the open, lunch session, and decline into the close.

Both days started with a small compression pattern that gave-way to a lunch-time price breakout, second pause, and push to new highs in a 5-wave fractal pattern, both of which ended on negative dual divergences (again) on the respective price peaks (intraday highs).

From there, price stagnated for an hour and then collapsed into the close.

Day structures that repeat are like little golden roadmaps into the future – but that’s another story.

These sort of examples underscore the importance of evening assessment and forming a ‘broader perspective’ mental picture of day structure, all of which I discuss in evening reports.

Though it’s extra work, I suggest all intraday index ETF or futures traders (all traders for that matter) print off and study each day’s chart and think of it in terms of patterns, opportunities (trades), etc.

The more you see these patterns – and believe me they do repeat – the better you’ll be able to recognize them (and act on entry/exit signals) in real-time as they develop and follow-through to pattern completion… or pattern failure if that’s the case too.

Study – it most certainly makes a difference.

Corey Rosenbloom, CMT
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3 Responses to “Two Examples of Exact Intraday SPY Pattern Repetition”

  1. Tom Says:

    How do you draw the rounder arc in TradeStation?

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