Most of the patterns we have been following over the past couple of weeks have completed at their initial targets.
The daily chart has completed a gartley pattern, with the X at the All Time Highs, and the A at the low of the August correction. We have pointed out the possibility of SPY reaching 207.2 (127%BC) ever since it surpassed the entry at 191.77 for a possible CD leg higher. Friday it closed at 207.51, just 9 pennies above the D at 207.42
The definition for a gartley pattern requires B to be a 61.8% retracement of the XA leg, and C between 38.2 and 88.6% retracement of AB.
the 127% BC extension is perfectly inline with the 78.6%XA level, so we have a near perfect pattern.
Since the large range bar after the entry of the start of the CD leg we have seen TD-pressure declining, and depicting a bearish divergence. Does this mean it’s going to reverse here? Not necessarily, this pattern can morph into a butterfly with target between 127 and 161.8%XA.
going from here my strategy will be; as long as it can hold above the PRZ, use the depicted levels as targets; the 88.6%XA, the Monthly 161.8%XA at ATH, which by the way is very close to a 161.8% projecion of BC (not depicted in the chart).
As long as SPY stays above the PRZ, I will continue looking for bullish patterns on short Timeframes 1-15minutes on the stocks that have traded very well for me; FB, AAPL
On the short Timeframe, 5minute chart, SPY also completed an AB=CD pattern on Friday: both the lower PRZ and D were tested within a penny or so.
I have no positions, and going to just watch the action in the morning. I’m thinking we could see a little bit of a pullback from these levels. so if it gets to a bullish PRZ on short TimeFrame, we can watch for a reversal again.
FB has been absolutely fantastic, Friday’s high touched the 113%XA on daily chart to the penny. And from the previous postings on FB you know that on Friday it reached the 161.8%XA target on the 30min chart, we have been mentioning since the beginning of October.
You can see a 107 target as AB=CD PRZ on the daily. However from my experience the 113%XA level many times is cause for a pullback: many breakout traders are getting caught there.
Optionsflow remains uber bullish, relentless call buying. 15min chart shows its at a PRZ as well.
I’ll remain trading the same strategy; wait for bullish PRZ’s on short TimeFrames, and trade weekly calls, until it fails.
AAPL in a beautiful looking pattern on the 60min.
touched the 127%XA also to the penny. if it breaks above then we can start looking at he 161.8%XA, around 122.5
So for Monday, the way things look for now I’ll be waiting it out a little, and see if we can get a little bit of a pullback first.
If I see any patterns forming, then I’ll post on twitter.