Intraday Chart Patterns In The S&P 500

I wanted to highlight the Three Push Reversal Pattern which led to the Cradle Trade on Thursday’s intraday S&P 500 SPDR (SPY) chart.  Let’s see these trade set-ups!

I’ve done something a little special for you in tonight’s post.  I get a lot of questions about my “3/10 Oscillator” I use so I wanted to show you how similar it is to a Rate of Change (or other Momentum) oscillator.  In this case, I’m pairing it up against a 5-period RoC Indicator which anyone can use on any charting platform.  It’s almost identical to the 3/10 MACD Oscillator.

That being said, price made three symmetrical swings (pushes) down to new lows beginning with yesterday’s close.  I call this the “Three Push” pattern and it almost always leads to a price reversal, or deeper than normal counterswing in price - it’s a powerful set-up that can lead to good gains with relatively low risk (the stop would go slightly beneath the third swing that you perceive).

In this case, the final ‘push’ (swing) formed a spinning top/doji reversal candle at the S1 (Support 1) Pivot Point (not shown).  It was also fulfilled the “Measuring Objective” of an “AB=CD” Measured Move (bear flag-like pattern), so we had different reasons for confluence support at that low of the day (the TICK also formed a slight positive divergence into that low).

I deemed that to be the most powerful trade set-up of the day, and it led to a push to new highs on the day.

The second point I wanted to highlight was the Cradle Trade which formed just after 2:00pm.  Price retraced slightly beyond the cradle, but this is why it’s often better to use wider (as opposed to tight) stops no matter how uncomfortable it might feel - don’t place your stop pennies beneath expected support.

Though it’s more an interesting observation than a possible trade set-up, price formed a broadening pattern (note the expanding trendlines that began off the 1:30pm highs into the close).  You don’t see that very often.

There were also Elliott wave insights on the day, but I wanted to focus here on the “Three Push” and “Cradle” Trade.  Keep looking for additional insights and try to internalize these patterns so you can recognize them as they form in real time!

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