"The market can only do three things: up, down, or sideways, but your psychology has a million ways that it can go. -Victoria Pearson "

  Hail Mary Setup with ABC Patterns     5/21/2010 4.45pm

ABC ABC Hail Mary pattern is one of the reliable pattern occurs on a late-day (after 3pm ET) sell-off days. This pattern may be easily detected and traded using the ABC Bullish pattern rules. This is also Perfect form of ABC Pattern and can be traded using SuperBars and other pivot levels.

The primary conditions to detect this pattern are:
1. Sell-off in the markets.
2. Fib. Bands show clear resistance at the mid-Fib. Bands for every attempted rally.
3. Price trades outside the lower Fib. Band to mark 'A'.
4. Price trades above (or near) the mid Fib. Band to mark 'B'.
5. Price makes another lower-high pivot below the mid-Fib. Band to mark 'C' with at least 62% retracement.
6. At least 'B', 'C' pivots must form after 3pm, if not all 'A', 'B' and 'C' pivots form after 3pm ET.
7. Trade using ABC Bullish pattern rules.
8. After triggering an entry, the price trades at accelerated pace, hence the Targets are reached quickly.
9. Must exit the trade by close of the day.


Here is today's Hail Mary Setup in @ES.
After trading a high of 1088.75 by mid-day, ES started to sell-off. Every attempted rally met with resistance at the mid-Fib. Band area. Around 3pm, price traded again outside the lower Fib. Band to mark the 'A' pivot at 1068 level. This level was also supported by Value Area Low (1068.5) and Previous Low (1067.25). About 3.30pm, price attempted to rally above the mid-Fib. Band (1075.25) and quickly retraced back into the AB leg. At 3.40pm, the price retraced over 62% and marked 'C' pivot to complete 'ABC Bullish' pattern. This ABC is also a perfect ABC Setup. ABC Entry was set above 1071.5. At 3.44pm, price crossed EL with a strong Green SuperBar to signal a potential 'Hail Mary' setup. Stop was set at 1069 with Target levels (62%, 100%, 162% of AB levels: 1073.75, 1076.5, 1081.).

Tools
1. Auto ABC
2. Super Bars
3. Fib. Bands
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