Three Valleys Pattern

January 11, 2010 · Posted in Fibonacci Bands, Globex Pivots, Three Valleys · Comments Off on Three Valleys Pattern 

Jan. 11, 2010
ES opened strongly higher after trading Globex Range of 1140.75 to 1148.25. Friday’s Value-Range was narrow as the Point of Contact was way below Monday’s Open. The first reaction was range expansion day once price trades above the Globex High. But as soon as the market opened, there was no strength and it appeared the Friday’s POC may be an attraction on the downside. I suspect the earnings jitters are influencing the markets.

1. Market Structure High (MSH) patterns was marked at the open near Globex High (1148). A Good short setup to trade on any weakness with Globex High as the STOP. SuperBars and kTrend will be the trend tools to guide the trade. No clear patterns emerged except a Potential ABC.

Around 10.30am, prices bounced off 200-SMA (1140) to show a tradable bottom.

2. Three Valleys Pattern: One of the rarest but reliable pattern. ES made three lows at 1140, 1138.5 and 1138 in a text book fashion. The range from the top
1148 to 1138 is 10 points. From the three valleys pattern, at least a bounce of 6 points is expected (62%) to the GBXMid range (1144.5).

3. 62% retracement into the range from Globex High to the Day Low…

Fib. Bands
Globex Pivots
Floor Trading Pivots
kTrend
Market Structures

Trades_Jan1110