E-mini breakout begging for correction

Brooks Price Action - 05-21-2012 Monday

pending chart 1373

Higher low, major trend reversal, breakout above 15 minute 20 bar moving average plotted on a 5 minute chart. Spike and channel top. Should get approx. Ten bar, two-legged correction sideways to up on 60 minutes chart after such strong sell climax and tight channel

  • Monday, May 21, 2012
  • Bar 1 - Yesterday = bear channel and 60 minimum or minutes parabolic wedge so sell climax. Weekly chart breakout below moving average, so should fail, failure. Like most bos. 60 minimum or minutes extremely os tight channel so should trade sideways to up for at least approx. Ten bar, two-legged correction on 60 minimum or minutes chart, but might fall below low first. Bull bar but tails so buyers below. Market failed repeatedly at 15 minute 20 bar moving average plotted on a 5 minute chart last week, so if can get breakout above, it will be support and market will try to test 60 minute 20 bar exponential moving average and top of channel. Many upside targets after such a big sell climax.
  • Bar 2 - Outside up bar but big bar and tails at 15 minute 20 bar moving average plotted on a 5 minute chart. Wait
  • Bar 3 - Breakout but small. Wait for stronger breakout. 3 bars up so buyers below
  • Bar 4 - Bear inside bar but tail so buyers below. Two legged pullback in a bear move short, fail, failure at moving average, double top 69 so ok swing short but odds favor bulls. Yesterday ended with lower low major trend reversal so should try to form higher low major trend reversal soon. Even if falls below low of yesterday, a reversal up would be an expanding triangle buy (ll mtr)
  • Bar 5 - Bear breakout
  • Bar 6 - Outside up bar. Wait for breakout
  • Bar 8 - Breakout but close below 3 breakout point. Still a buy but ok to wait for big breakout bar
  • Bar 10 - Bit breakout bar so clearly always in long and should get measured move up. Swing stop below 10
  • Bar 11 - Bear inside bar so bad follow through. Ok to exit below but tight channel so don't short, despite fail, failure breakout. Buyers above and below. Ok to exit below and look to buy pullback
  • Bar 12 - Another breakout, more up
  • Bar 13 - Another big bull trend bar so more up, but ok to wait since swing stop at this point is below 12, which is about 6 points. Ok to wait to buy pullback so that risk will be less
  • [more Bar-by-Bar Analysis in the Forums at www.brookspriceaction.com]
About the Author
Al Brooks

Al Brooks, M.D., is author of the Brooks Trading Course (27 hours of videos at BrooksTradingCourse.com), several books on Price action (Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader, Wiley, 2009, and the 500,000 word, three-book series, Trading Price Action, Wiley, 2012), and numerous articles in Futures Magazine. He also provides live intraday E-mini price action analysis and free end-of-day analysis on www.brookspriceaction.com.

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