E-mini S&P stuck in range after bear break

Brooks Price Action - 10-08-2012 Monday

pending chart 1562

Trading range day.

  • Monday, October 8, 2012
  • Bar 1 - Yesterday = bear channel so bull flag. Better to look to buy or long
  • Bar 2 - Bear inside bar. Expanding triangle 69 74 so context good for bulls but need signal bar. Wait
  • Bar 5 - Bull bar, close on high, but tight trading range. Ok swing buy or long but better to wait. Two legged pullback in a bear move sell or short below but far from moving average and trying to reverse up for low 2 days ago and bear breakout of bear channel, and odds favor fail, failure bear breakout
  • Bar 7 - Wedge bear flag 3 5 but tight channel and bad signal bar. Wait. Much more weekly put buying so some institutions betting on down
  • Bar 9 - 2nd entry sell or short but doji. Tight trading range. Wait
  • Bar 13 - Double bottom 1, bull reversal bar, ok swing buy or long. Only 1t body so not strong and ok to wait for bull breakout
  • Bar 14 - Bull breakout, always in long. Need new high of the day and follow through
  • Bar 15 - Good follow through, but need more follow through after new high of the day. Bears see as bull trap and another lower high in bear channel and will sell or short close. No one knows, but both the bull and bear strategies are valid and can be profitable if managed correctly
  • Bar 16 - Expanding triangle bear flag 1 7, big bear inside bar so fail, failure breakout, but not as strong as bull breakout so still always in long. Swing stop below 14 or 13, but bulls should not let it fall below 16 or 15 if strong. They should not have allowed this big bear body, so might be bull leg in trading range day instead of bull trend day. Swing sell or short, but still always in long
  • Bar 19 - Three legged pullback in a bull move buy or long but still not high probability so swing only. Two inside bars at high of the day so breakout mode. Bears want bear breakout of bull flag, fail, failure moving average, lower high, and new low of the day. Bull case slightly stronger because of double bottom and then 3 strong bull bars, but not yet 60%. Ok swing sell or short below and swing buy or long above
  • Bar 21 - Breakout test or bought, higher low major trend reversal buy or long, but doji and 7 bar bear microchannel. Bears want new low of the day and measured move down. Still always in long but not yet strong and still in bear channel and in trading range
  • [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.

Originally published on BPA Forums. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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