E-mini S&P reverses after double top

Brooks Price Action - 12-10-2012 Monday

pending chart 1685

Trending trading range day, double top major trend reversal, final flag bottom

  • Monday, December 10, 2012
  • Bar 1 - Yesterday was broad bull channel so odds favor bear breakout, but 1/3 chance of strong bull breakout. 4 day spike and channel top so should transition into trading range soon and test down at some point, probably today
  • Bar 3 - Bull inside bar, ok swing buy or long or swing and maybe part scalp, but top of broad bear channel so odds favor bear breakout soon
  • Bar 5 - Doji inside bar, buyers below but maybe sellers above since top of channel
  • Bar 7 - Second entry sell but bull body. Wait
  • Bar 9 - Microwedge 4 7 but bull body and tight trading range so lp sell or short. Wait
  • Bar 11 - Breakout pullback buy or long but doji and top of channel. Better to wait. Dec often has lots of quiet days. Be patient and wait for good setups, even tho probably fewer than most months.
  • Bar 17 - Bull breakout but late in trend so might be exhaustion gap. Close on high, more up
  • Bar 18 - 2nd strong bull bar, close on high, but best 2 bar breakout in 70 bars so might be exhaustion gap. Strong bull breakout late in bull so low probability. Still always in long, but lower probability. Bears want fail, failure bull breakout of bull channel and then test of bottom of channel, bulls want breakout and measured move up. Probability favors bears
  • Bar 19 - Bear inside bar, fail, failure breakout, but still always in long and 2 strong bull bars so bears should wait for second entry sell
  • Bar 26 - Double bottom 20 but tight trading range so wait or use wider stop
  • Bar 29 - Two bar revresal but not enough bars for major trend reversal. Should get leg 1 equals leg 2 measureed move move up to high of last week, but might get major trend reversal at any point. Should also hit bottom of bull channel since fail, failure bull breakout at 19, but might go sideways to get there.
  • [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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