Today SPY reached the 161.8%XA target of the pattern on the 15min chart, we have used as of last Friday.
It did so with an intraday harmonic pattern on the 5 min TimeFrame.
Here’s the 5min chart with the levels of the 15min and daily charts drawn in.
You can see how the PRZ of the 5min pattern was inline with the 161.8%XA of the 15min, as well as a 127%XA of the 5min pattern. EOD SPY closed below this confluence of PRZ and Fibonacci projections. At least a pullback has to be expected. Which we see occurring at time of writing on the ES futures, with a 20 point retrace.
The 5min chart also shows a 161.8%XA projection right inline with Lower PRZ level of the daily chart, which we have discussed in prior posts
So for tomorrow:
If futures recover overnight and SPY manages to trade above the PRZ, then these two levels just below 195 have to be observed, although they are only half a point higher then the PRZ. And subsequently the 196 area.
With the completion of the 15min pattern and the 5min intraday Bear PRZ , we can expect a higher probability for the start of a new pattern with a CD leg lower to a BullPRZ. The X could be today’s 13:00 bar, the A point as today’s high at the 15:40 bar. Then tomorrow we need to see at least a 38.2% retrace of this XA leg (the AB leg), followed by a short BC leg up, with a lower high as the 15:40 point A, and then subsequently a CD leg lower to a new PRZ.
If that would happen, and that’s a big IF, of course, we would want to see this PRZ not to be any lower than the point B of the 60min chart, in order to leave the current uptrend intact.
Today right at the open @gr8estbot alerted call buying in 117 calls at $035. Followed the trade, and turned profitable very quickly.
Plan for rest of week is to find pullbacks for some new call trades. The 60min chart is very extended, and I will be looking for Bull PRZ’s on lower Timeframes.