Standard and Poor’s 500 June 2009 Mini-Contract (ES_M9): 15-Minute Bullish 5-0 Pattern Potential Reversal Zone (PRZ)

The black line represents the Bullish Reciprocal AB=CD completion point, and it converges at the same level as the 50% retracement. After a sharp decline into the PRZ, the price action was able to stabilize. After some consolidation, the ES held its ground above the initial test of the completion point.

This is an excellent example that possessed ideal price action in a reversal from a valid Bullish 5-0. The structure was distinct, the alignment of Fibonacci numbers was satisfactory, and the price action reversed precisely in the zone. Although it will take time to identify these situations, 5-0 opportunities like these occur frequently in the financial markets. Although a “clean” reversal from a single test of a PRZ is ideal, it is more common for price action to retest this pivot area a second or even multiple times before reversing significantly.