Intra-Day Action – Bullish 1-2-3 Pattern – 29 Jan 2016

Here’s is today’s intra-day action of $SPY. It’s good to look back at previous days to compare the different times and patterns during reversals and market conditions.

You can look at previous Intra-day journals here

Today we had a strong bullish trend day. Trying to short SPY today was not a good idea. On strong trending days it’s best to wait for opportunities to buy. I’ve included a couple of examples below. The Bears had very few moments of control and the TICK shows only one -1000 reading which was actually good for the Bulls. The -1000 reading had very little volume and price expansion to the downside signaling the Bulls still were buying up all the supply.

The very next bar was a Doji (11:40am) which at one point was a solid red candle lower than the previous candle. The TICK made a lower high (-800) indicating a bullish divergence and the Bears were not that strong.  Reading these subtle clues during the day can be hard in the moment. If you stay objective and try to understand what your tools are telling you. You will be able to spot these patterns as you build your experience.

Here is the the hourly chart of today’s action.  I have marked two examples of a Bullish 1-2-3 Pattern. This pattern is a strong continuation pattern and plays out on all times frames. In this example we see the hourly chart. Moving down to a smaller time frame and looking for pullbacks, breakouts and smaller 1-2-3’s would give you some good entries (see above 5 min time frame).