E-mini S&P trades into triangle after Bernanke speech

Brooks Price Action - 08-31-2012 Friday

pending chart 1529

Gap up, or up, higher low major trend reversal, possible triangle and trading range day

  • Friday, August 31, 2012
  • Bar 1 - Yesterday was trend resumption bear. Gap up. Tails so buyers below, sellers above. Bernanke speaks at 7 am so probably will be trend day up or down. Bears will exit put spreads on strong move above 60 minimum or minutes right shoulder. Open of week at 1412.50 so target since today is fri..bulls want bull body on weekly. Thick pink line above = open of week, thick blue line above (off the screen at the moment) at 1414.50 = high of last week, thick blue line below = low of last week. All 3 lines are magnets, as is the midpoint of the 2 thick blue lines, which is the thin blue line. Today is fri so weekly chart might affect trading.
  • Bar 2 - Open on low so committed bulls and ok sell or short scalp below, but trading range likely since 2 bars up and between support = yesterday high and 60 moving average and resistance = high of 2 days ago
  • Bar 6 - 4 bear bars but speech on next bar and probably will get breakout up or down
  • Bar 7 - Big bear bar but big tail. Probably always in short
  • Bar 8 - Another big bear bar, both with over 100,000 contracts so should get measured move up or down. Even tho always in short, can reverse. Bears want to keep market below 8 high
  • Bar 9 - Strong bull bar, bears might exit above. Swing bulls will buy or long for buy vacuum test low of yesterday
  • Bar 10 - Another big bull bar. Always in long, but stop below 10 so trade tiny. Big down, big up so sideways likely. 70% chance 9 will be low of the day
  • Bar 11 - Follow through, always in long but big down, big up so sideways likely, then measured move up or down based on bodies of 7 & 8 or 9 & 11, but both spikes similar targets
  • Bar 12 - Outside down bar but always in long. Wait
  • Bar 13 - Big bull reversal bar but 3 bar tight trading range so bad for stop entries. Wait
  • Bar 15 - Bull inside bar, 2nd entry buy or long, but tails and big bars in tight trading range. Low probability. Better to wait. Swing buy or long above, but swing stop below 13, 10, or even 7, so trade small. Stop below 7 has maybe 50% chance of being hit so not good. Stop below 10 or 8 is so far that position has to be so small that the trade is not worth it. Better to wait.
  • [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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