Patterns in S&P500 Index

November 12, 2010 · Posted in 2B Patterns, ABC Bullish, Double Top, X5 Patterns · 1 Comment 

Here are potential scenarios from S&P’s daily chart patterns.

1. The most visible pattern in S&P since June 2010 until now (Nov. 12, 2010) is Inv. Head and Shoulders. Late Sept. SPX traded above neckline to confirm Inv. H&S pattern. The target for Inv. H&S Pattern is 1250 (100% of Necline to low of Head). This target is also inline with X5 target 1231-1246 (price cluster).

2. The current famous pattern is Trader Vic’s 2B (2T) Pattern. It is a form of irregular Double Top formation. First Top is from Late April at 1219 and the second potential top is on Nov. 5th at 1227. If S&P slides and closes below 1195 (also 21-EMA), it may confirm 2T pattern. The trigger for a short-trade is to enter the low of the bar which closed below 1195. Set a STOP above the Nov. 5th High + few points (1229-1230). Target is at least the 50% of swing range nearing the Neckline (or ‘B’ in X5 pattern). Ultimate target for 2T pattern is between 61-76 of prior swing.

3. Last but most vivid pattern is X5 pattern. It says, current slide may be just a pullback. In that case, next price cluster may offer some resistance (1231-1246). If price reverses from current sell-off and trades higher, there are two possible scenarios.

‘D’ is trading outside of XA range
A. Bearish Butterfly (Target 1.27XA to 1277).
B. Bearish Crab (Target: 1.62XA: 1350).

4. ABC Bullish pattern is also embedded in the X5 pattern. It shows the Price and Time Targets coinciding with some of X5 target ranges.

Disclaimer: The chart analysis provided here is for educational purpose only.


2B Pattern in RIMM

December 6, 2009 · Posted in 2B Patterns · Comments Off on 2B Pattern in RIMM 

2B Patterns are described as failed Double Top and Double Bottom patterns. They are most powerful patterns but work well in larger time-frame charts where as in small-time frames, they are only 50% successful.

2B Patterns form when price fails to trade above previous new High or below previous new Low. 2B Patterns also have very specific rules to trade.

Here is RIMM’s Daily chart with 2B Patterns. (I’ll write more later today on these patterns)