Being that keeping count of Elliott Waves just hurts my brain, I like to use a more simplistic approach in following price structure. A count known as the "ABC" Price Pulse which I learned about through a L.B.R. presentation.
It's simply a price impulse, followed by consolidation, followed then by another price pulse. The following chart of today's SPY on a 5-min basis was a perfect example of this concept.
I have also included numbers (1, 2, 3) which represent another concept (again, discussed in the above link's presentation) where a price impulse tends to have 3 pushes to them. Also, take note that the "B" wave is a construct of a flag pattern. Allow the chart to illustrate, hopefully it's not too confusing.
Conceptually, it goes something like this; The A-wave is where volume/size comes in and moves the market after being in a sideways/indecisive/equilibrium level. The B-wave follows where the early-birds distribute (take profits) on part (or all) of their position, while late-comers join in and the additional volume brings price down in the final C-wave.Anyway, there were a couple of things tipping off a potential bottom in today's early morning sell-off; a TICK divergence (also notice that the TICK didn't get overly bearish, even at it's lowest level), which also appeared on the 15-min chart as a momentum divergence, and to a lesser extent, the resilience of this lower channel line which given support on two other occasions (yellow support line within the 15-min chart).
Speaking of shake-out, here's a trade I got shaken out of today because (1) I didn't give it ample wiggle room, and (2) I was distracted with a 1-minute chart (hence the shakeout) , while I should have kept focus on the larger time-frame (5-min) and my strategy behind the trade. Why I didn't get back in is beyond me. The strategy behind it was a simple gap-fill, with confirmation given in the form of an ascending triangle and price basing at previous support.
