E-mini S&P shows possible reversal to bull

Brooks Price Action - 10-22-2012 Monday

pending chart 1581

Reversal day. Expanding triangle bottom so lower low major trend reversal, double top bear flag, trending trading range day, then reversal day. 60 minute expanding triangle bottom so probably approx. Ten bar, two-legged correction sideways on 60 minute

  • Monday, October 22, 2012
  • Bar 1 - Yesterday was small pullback bear so sell climax. No gap down so odds favor up. Big bull bar but possible or test of moving average. Ok swing buy or long but better to wait. Yesterday ended with moving average gap bar 77, which usually leads to last leg of bear before reversal. 81 is weak signal bar ofr buy or long so wait. Big bull bar so possible low of the day but need more info. Expanding triangle bottom so lower low major trend reversal, but expanding triangle so possible triangle and trading range. Bears want close below 1422 april high on cash index because many bulls will give up and could be start of correction. Odds slightly favor bears at this point, per my blog on brookstradingcourse.com
  • Bar 2 - Or sell or short but middle of expanding triangle so lp swing sell or short. Wait
  • Bar 4 - Pullback form 1 breakout, double bottom 81, possible low of the day but doji so lower probability. Still on expanding triangle buy or long 1
  • Bar 7 - 2 big bull bars so always in long, but top of trading range so lp buy or long. Better to buy or long pullback or wait for breakout.
  • Bar 9 - Double top bear flag 77, bear inside bar, top of trading range, two legged pullback in a bear move, but better to not scalp because always in long after 3 bars up. Ok swing sell or short for high of the day, but always in long so lower probability. Better to wait to see if get breakout pullback buy or long
  • Bar 16 - Breakout test or bought buy or long but doji and 9 bar bear microchannel so better to wait
  • Bar 20 - Two legged pullback in a bear move sell or short below moving average, bear bar. Ok scalp and maybe swing, but bottom of trading range so better to scalp most or all. Might be final flag
  • Bar 23 - Bear follow through so probably always in short, but bottom of trading range so better to sell or short rallies. Most breakout fail, failure on trading range day
  • Bar 24 - Bull inside bar, fail, failure breakout low of yesterday, wedge bottom 60 81, lower low pullback from 6 � 8 breakout, but tight channel so better to wait for second signal buy. Breakout pullback sell or short but bottom of trading range so lp sell or short so need reward 2 times risk or wait
  • Bar 27 - 2 big bull bars, small tails, so probably always in long
  • Bar 28 - Bear inside bar, dtdf 17, broad bear channel but always in long so lp sell or short and better to look to buy or long pullback. Probably buyers below, probably sideways since inside bar 20 tight trading range, but more up likely. Swing stop below 26 or 23 so trade small or wait for pullback or another bull breakout.
  • [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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