Unlike patterns on a daily chart, which tend to play out over several days or even several weeks, patterns on the 15-minute chart tend to play out within one or two days.
By Jeff Clark – the editor of the Jeff Clark Trader
By the middle of the day yesterday, the S&P 500 had been higher for four straight sessions. And, it wasn’t just a series of tiny gains. It’s been four straight days of “rip your face off” rallies. The index rallied over 130 points during this stretch. That was an average gain of more than 1% each day.
That doesn’t happen often. And, it had me thinking that the market might just keep plowing higher into the end of the month.
But, then I took a look at the 15-minute chart of the S&P 500 and decided the odds favored a decline today.
— RECOMMENDED —
The 3-Stock Retirement Blueprint:
How To Retire Rich With Just 3 Stocks
“This plan helped me retire at 42. Now, for the first time, I’m revealing how it works and I’m even giving away the names and tickers of the 3 stocks you need to get started.” – Millionaire trader, Jeff Clark
Yes, show me the 3 stocks.
You see… unlike patterns on a daily chart, which tend to play out over several days or even several weeks, patterns on the 15-minute chart tend to play out within one or two days. So, traders who are trying to gauge what might happen in the market in just one day should focus on a 15-minute time frame.
We can look for the same patterns we look for on the daily charts – and trade the same way. But, the time periods are condensed.
For example, look at this 15-minute chart of the S&P 500…
This chart shows two bearish rising wedge patterns. The bear wedges have negative divergence on the MACD momentum indicator – which is an early warning sign that a rally phase is nearing an end.
The first bearish wedge – which started to form on May 6 – took four trading days to complete. The S&P broke down from the wedge and traders who spotted this pattern on the intraday chart ahead of time had a nice chance to profit on the decline.
This week’s rally formed another bearish rising wedge pattern with negative divergence. The index broke down from the wedge yesterday afternoon. So, if we’re trying to figure out if the market is going to finish the month of May with another big rally day, based on this setup I’d have to say “NO.” It looks to me like the market is poised for a brief decline.
Of course, I could be wrong. Technical analysis is more of an art than an exact science. But, that’s how I’m trading it.
The point of this essay, though, is to point out that if you’re looking to make ultra-short-term trades, then you need to use chart patterns that fit the time pattern you’re trading. A one-year daily chart of the S&P 500 isn’t going to help you much in figuring out what the market is likely to do today.
Shortening your time frame and using intraday charts – like this 15-minute chart – will give you a better idea of the potential short-term direction.
— RECOMMENDED —
Next Big Tech Trend Will Put Well Known Businesses in Bankruptcy
Legend who bought Apple at $1.42 says there’s a huge new tech trend coming to your hometown – which could make you a small fortune over the next few years.
And today he’s revealing the name and stock ticker symbol of his favorite way to make money from this trend.
You get his top pick for FREE, right here.
Just minutes before the close yesterday, the S&P 500 gave back all the gains from the day, and closed lower. Buying and holding simply isn’t going to work in this market. But, learning to capture short-term moves will.
My Jeff Clark Trader subscribers enjoy a thorough education on options trading, and a monthly trade recommendation, for just $19 per year. That’s less than some folks spend on dinner each night.
If you want to learn how to capture gains from these short-term moves, in what might soon be the most turbulent market in history,click here.