E-mini S&P sees wedge top, reverses into trading range

Brooks Price Action - 08-27-2012 Monday

pending chart 1523

Wedge top, possible triangle bull flag, 60 minute double top bear flag, trending trading range day, reversal back into lower trading range

  • Monday, August 27, 2012
  • Bar 1 - Yesterday was spike and channel bull so trading range likely with target = 28 low bottom of trading range. Wedge top at end of day. Fail, failure breakout above so still wedge but tail so not strong sell or short and might be buyers down to moving average. Swing sell or short, but better to wait. Still good location for spy put spreads on daily chart since maybe 50% chance of double top and reward much bigger than risk. Probably better to trade Oct., even tho about 10t more expensive than Sept.
  • Bar 2 - Big bear bar, close near low, probably more down
  • Bar 3 - Another bear bar but at moving average. Sideways likely. Bulls want or buy or long. 3 bear bars so always in short and support and/or resistance above
  • Bar 4 - Bull reversal bar at moving average so or buy or long but only 2t body and 3 bear bars so probably sellers above
  • Bar 6 - Bear outside bar surrounded by inside bars but middle of trading range and at moving average. Probably buyers below. Bad for stop entries
  • Bar 8 - Microwedge. Trend from the first bar bear so sellers above. Tight trading range, better to wait. Bulls are buying low of prior bar
  • Bar 9 - Micro double bottom but tight trading range. Should rally to ly for 2nd leg down from wedge but tight trading range so better to not buy or long above. Might go sideways and then get bear breakout and measured move down
  • Bar 11 - Double top 5 but tight trading range so better to not enter on stops. Limit order traders in control but should get breakout up or down soon. Wait for breakout. Might get fail, failure breakout and then reversal
  • Bar 18 - Strong bull reversal bar, fail, failure breakout 12. Bulls see as possible triangle 68 or 78, 8 in bull trend. Probably ok to buy or long above, but better to buy or long above 16 since that is where bears will exit
  • Bar 19 - Breakout after failed bear breakout so probably more up. Ok to buy or long close with stop below. Getting always in long
  • Bar 20 - More breakout, probably more up, always in long, even tho top of 2 day trading range. Traders will buy or long close and scale in below fr 2nd push up
  • [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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