I wanted to update the sell patterns mentioned a few days ago. There was a 60 min Butterflly sell pattern that formed at a Fibonacci resistance area. What was unknown at the time was if the market would trade higher above the 1127.50 and then complete a larger sell pattern or if this pattern would turn down.
The recent high in the SP 500 in the globex session from July 27 was 1117.75.

The market had been finding resistance the last couple trading days at the 1113 area just below that globex high.
Butterfly sell patterns can be very strong patterns when they work. As with all trading patterns they do not work 100% of the time.
This pattern is still working down towards the .618 of the last leg of the pattern, this area is around 1082.
Understand that this pattern can play out much lower if the momentum starts to the downside. We want to be watching how any support areas are holding as the market tests down.
For today there is a gap area that starts at 1078 and fills at 1063.75, this is around the .618 Fibonacci support area.
If the market rallies from this area will then be looking at smaller sell patterns to form into resistance areas.
Here is a chart of the SP 500 Emini on a 60 Min time frame with the Butterfly sell pattern.

Butterfly Sell Pattern formed into a large resistance area

For traders who want to learn a trading pattern that can have powerful reversal moves I’d like to invite you to a free webcast I will be presenting for TradersCoach.com on August 4, 2010.

This webcast will start at 8:30 pm EST and will be about 1 hour long.

Here is the registration link -  http://www.instantpresenter.com/PIID=E055DC8181

All traders who are registered will receive a free recording of this webcast!

Leslie

www.tradingliveonline.com

The SP 500 has had two NR7 days in a row, this is a form of contracting and expansion follows the contracting phase.
Yesterday an AB=CD sell pattern and possibly a larger time frame Butterfly sell pattern,completed at one of the Fibonacci extension levels, but the first hour range lows did not see any follow through.
Today we will be watching the first hour range for possible expansion out of that range. We watch the highs and lows made in the first hour for a breakout type of trade setup.
Important highs to watch are at 1127.50 and lows 1096 area.
Have a great trading day!
Leslie
www.tradingliveonline.com

The SP 500 Emini finally traded above the 1096 resistance area on Friday. First test down (short term charts) should find support.

There are resistance areas above to keep an eye on 1107 - 1112. There are some sell patterns forming into these areas, but traders want to watch for any long bars into these areas before initiating and sell trades.
We will be watching for small resistance patterns to form into these areas in our Live Trades Forum before entering a trade.

Conversely, we will watch for small time frame buy patterns to form on first tests down to the 1094 - 1096 support areas.

Have a great trading day!
Leslie
www.tradingliveonline.com

Strong trend move down on Friday, so today we want to look for some testing in the first part of the trading day. 1076 area should be good resistance on first test up. We will be watching for an abcd or possibly a 127 swing anywhere into that area, the zone is 1070 - 1076.
1059 was the low on Friday, on first test down will look for some support in that area or possible below that with a 127 pattern.
There is an unfilled gap now above at 1086.50 - 1090.25.
Have a great trading day!
Leslie
www.tradingliveonline.com

SP 500 has been trading up towards and testing the 1100 area. This morning in globex the high was at 1099.25. The market has been up 6 days and yesterday closed very close to the open.
There is a gap area below from 1073.50 to 1077.25 to watch as support area. You want to see how price holds this area.
For this morning will look for a retracement pattern back up as a test of globex highs and will look for a potential buy in the gap area.
Have a great trading day!
Leslie
www.tradingliveonline.com

SP held the gap up open yesterday and traded up to the next resistance area. Globex traded up to the 1099 area. In yesterdays blog we pointed out the previous resistance at the 1101 area. Late in the day and into globex the SP 500 Emini formed an AB=CD and 1.27 extension sell pattern at 1098.
Since the market has traded up to that resistance area, still can move a bit higher into that resistance area, and has had 5 days of trading up we will watch for a retracment sell pattern in the first part of trading today. Should still also see support on deeper corrections.
Have a great trading day.
Leslie
www.tradingliveonline.com

Strong move up this morning from globex. SP 500 is traded above the 618 retracement area of 1081 and has traded up into the next gap area at 1087.50 area.
There will be a large gap up open this morning so traders want to first watch how price reacts to the gap open. This means to see if price retraces back into the gap, does it close the gap, go through it or does price hold and move higher. Large gaps can precede trend moves and the trend can be either direction from the gap.
If prices move higher from here the 786 retracement is at 1101.50. This area was an area the market had a large break to the downside and strong move down.
It’s been a strong move up so any first deeper corrections down should find support.
Have a great trading day.
Leslie
www.tradingliveonline.com

I will be giving a free webinar on the AB=CD trading pattern that can be used in all markets and is found in all time frames. I love trading this pattern and teaching this pattern and I especially love I can show traders this fantastic pattern.

It has roots from a great trading book from 1935 ‘Profits in the Stock Market’ by H.M. Gartley. If you dont have this book yet in your trading library you really should consider getting it. It comes with a packet of charts from the late 1800’s up to about 1937. It is so much fun to browse through those and see how nothing much has changed over all these years.

The webinar is on Tuesday, July 13, 2010 and starts at 5:30 PM PDT (8:30 PM EST). It will go for about 1 hour. Here is the registration link for the webinar.
http://www.instantpresenter.com/PIID=EF59D78183

I hope you can join us!

Leslie Jouflas
www.tradingliveonline.com

The SP 500 Emini has been trading up to a resistance area/range starting around the 1066 area which is the .50 retracment (see previous chart) and up to the 1081 area, which is the .618 retracement area.
There are some intraday patterns that have completion areas at the 1077 area just above Fridays highs.
Friday closed with an AB=CD/Butterfly sell at the 1073 - 1075 area and has corrected about 10 points from these patterns in globex. If we see a further move up early today we will look for a shorting setup.
Friday was a narrow range day which can lead to range expansion, so we will also be watching for signs of expansion or a trend. If this occurs we will trade in the direction of that trend or expansion.
Have a great trading day and come visit us at www.tradingliveonline.com
Leslie