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$SPY - Intraday Chart Patterns - Video and Transcript

What is an Intraday Chart Pattern? Head Trader at Turbo Trading, Robert Knight, noticed this pattern in the $SPY. If you trade in the stock market, check out this video and the transcript below.

This is a video on chart patterns we follow. One of the [patterns] that we follow was developed by ... Mr. Elliott's wave theory. And it says that stocks trade in waves of five and correct in waves of three. And inside a wave down, you could have a five-wave move and then a pop and then another five-wave move to the downside.

And also, some other patterns that we look at, head and shoulders patterns...But let's just have a quick look at this in the $SPY for no other particular reason, but just to try to identify these patterns. So we see on the spy here this morning, it sold off quite sharply. Here's your wave one down.

Then you get a three-wave corrective--1, 2, 3-wave corrective wave two. And in this case, you get a very short wave three down. Here's your wave four, and then wave five. Now this is all inside of wave one. Then you get wave...the get a major move. So this is wave one down. So you got a five-wave move down in wave one.

Then you get a three-wave correct...1, 2, 3 wave corrective, or even a one to three wave corrective wave two. Now we're into wave 3 1 2 3, 4, 5. Wave down in wave three. Then we get a three wave corrective wave four. And then we get wavefive. Now this quite often happens in week five, where you get it's truncated. You get a 1, 2, 3, but it holds the support thereafter at the bottom of the fifth... And it held support. ...We call that...truncated. Now this is not that reliable, a truncated fifth, but in this case it does hold and it got back up to this. I had drawn a line here. This is the neckline, 4 68 and a half, because you can see now, perhaps we go to left shoulder on big volume, the head on big volume and then the right shoulder on low volume.

That's very typical. So here's your head and shoulder. It's not so well-defined, but you could call it. This looks like a head and shoulders pattern. Here's your key neckline here at the 4 68 50. It did pop out through it and it has come back a bit. So, you know, first time out, it may not make it. It is now in a bit of a channel here.

Let's see if it holds this...20 period moving average here, or this trend line. And go. So maybe now this is the neckline like this, which would also be an ascending triangle ascending wedge. So there are just a few patterns that we want to watch and talk and following and get an idea of where the markets are going to go.

The thing about these patterns [is] they fit into every stock. It doesn't have to be an index to fit into these types of patterns. $SPY quite often is much more defined ...moved down or up is quite often more defined than some other charts. And the other thing is it could be any timeframe too. Whichever timeframe you're looking at, I mean, here's the one-minute 1, 2, 3, 4, 5 wave move down.

1, 2, 3. Recover on 2 1, 2, 3, 4, 5. Wave moved down. Wave three on two, three week four truncated, fifth. That's a one-minute chart on the five-minute chart. It's not so well defined, but you might see this as a 1, 2, 3. The scale on a five minutes could be 1, 2, 3, 4, maybe look for another roll over five.

And then on the daily, obviously, we don't see here. I don't really see any typical five-week patterns right at the moment. It so it doesn't really matter what the timeframe is. The patterns are all the same.


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