Standard & Poor’s 500 March 2010 Mini-Contract (ES_H0): 15-Minute Bullish Crab and Bullish RSI BAMM Failure

The enlarged chart in Figure 6.46 clearly shows the violation of the pattern’s PRZ and the RSI BAMM extension. The price action hit all the numbers on the initial test of the PRZ but quickly continued lower, sinking below the 1.618 extension.

Figure 6.46.

The intra-day price action clearly violated the pattern’s PRZ. This should have served as a severe warning sign well before the 1.618 RSI BAMM extension was violated. This example clearly demonstrated a failed RSI BAMM setup. The critical aspect, as is the case with most violations, is the inability of the price action to stabilize on the secondary test of the indicator at the completion point of the pattern despite a clear prior complex RSI structure.