E-mini S&P may see extended bear rally

Brooks Price Action - 10-19-2012 Friday

pending chart 1571

Spike and channel bear, small pullback bear, consecutive sell climax. If gap down on monday, might correct for 1 - 3 months. Be ready.

  • Friday, October 19, 2012
  • Bar 1 - Yesterday was expanding triangle so trading range day. Gap down, big bear bar, close on low, more down. Blue line below = open of month, pink line = open of week, green line = low of week
  • Bar 2 - Small bull doji, sellers above and below
  • Bar 3 - Another big bear bar so consecutive sell climax. Ok sell or short but better to wait
  • Bar 4 - Bull inside bar but 2t tail so more sideways to down. Lp swing buy or long. Probably sellers above
  • Bar 9 - Bear inside bar, two legged pullback in a bear move, close near low. Ok scalp sell or short but have to be fast since final flag likely after consecutive sell climax and bottom of channel
  • Bar 11 - Bull reversal bar, 1t tail, final flag 9, possible low of the day. Ok swing buy or long for low of the day, but need reward 2 times risk since lp. Might get one more push down. Higher probability to wait
  • Bar 17 - Wedge 3 11, bull reversal bar, but 2t below 16 high = ledge = resistance. Better to wait
  • Bar 18 - Breakout pullback sell or short, fail, failure wedge, but bottom of weak channel so better to wait. Good buying pressure so should become trading range, but be patient. Might be better to wait to see if get major trend reversal to buy or long. Hard to make money on sell or short in tight channel unless selling above bars or using wide stop
  • Bar 19 - Bear breakout of wedge bottom, and wedge had several good bull reversal bars, so measured move down likely, which is around bottom of gap and measured move down from 1 -3 bear bodies
  • Bar 20 - Big bear breakout, more down
  • Bar 21 - Follow through, more down
  • [more Bar-by-Bar Analysis, Daily Webinar and Trading Course info at www.brookspriceaction.com and www.brookstradingcourse.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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