Analyzing the price action of Tuesday's drop: Brooks

Brooks Price Action Analysis of Tuesday, Aug. 6

pending chart 2265

Trend from the first bar bear, final flag, higher low major trend reversal

  • Tuesday, August 6, 2013
  • Bar 1 - Bull reversal bar, lou, but small bar so lower probability. Ok swing buy or long
  • Bar 2 - Breakout pullback sell or short but doji. Bad bar for bulls
  • Bar 3 - Two bar revresal, ok swing sell or short below
  • Bar 4 - Follow through, open at close of 3 so urgency, more down
  • Bar 5 - Did not go above close of 4 so urgency, more down, sellers at the high of the bar and probably scaling in higher
  • Bar 7 - Breakout pullback sell or short but 3 bar tight trading range so swing only or wait
  • Bar 9 - Wedge 1 5 but doji. Low probability buy or long, better to wait
  • Bar 12 - Bear inside bar, low probability sell or short, might be final flag, so swing, low probability so use swing stop, but can convert to scalp if quickly goes reward 2 times risk or wait
  • Bar 13 - Big bear bar, possible exhaustion gap or measuring gap
  • Bar 14 - Breakout pullback sell or short but bull body, at measured move = support, and after sell climax so probably buyers at the low of week of the bar and probably scaling in lower and trading range soon
  • Bar 15 - Big outside up bar but probably 1 more push down after 13 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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