Breaking down the stock market's bearish day

Brooks Price Action Analysis of Thursday, Aug. 15

pending chart 2276

Island top on daily, trend from the first bar bear, consecutive sell climax, higher low major trend reversal, wedge bear flag, lower low major trend reversal, double top

  • Thursday, August 15, 2013
  • Bar 1 - In my video a couple of weeks ago, i said what i have been saying for months�that the market is probably in a trading range on the daily chart andthat august had a 60% chance of being the top for many months. Today, island top on daily, big gap down, possible start of 1 � 3 months down to 1550 bottom of possible trading range on daily. Tail so possible buyers at the low of week of the bar and probably scaling in lower, but don�t buy or long since lots of trapped bulls. Pink lines below = gap on daily from july 11
  • Bar 3 - Bull reversal bar, ok 2 profit target scalp buy or long, but always in short and possible big move down on daily.
  • Bar 4 - Breakout, more down
  • Bar 5 - Bear bar, daily gap just below, more down
  • Bar 6 - Test of pink line = gap on daily, but bulls need strong bull reversal bar. Sellers at the high of the bar and probably scaling in higher and signal bar
  • Bar 8 - Another big bear breakout, consecutive sell climax, probably exhaustion gap instead of measuring gap.
  • Bar 10 - Consecutive sell climax, two bar revresal, probability favors sideways to up for 1-2 hours to near moving average and 8 high
  • Bar 14 - Double top 7 second entry sell but bull body. Ok swing sell or short but probably buyers at the low of week of the bar and probably scaling in lower and higher low major trend reversal
  • Bar 18 - Higher low major trend reversal, ok swing, low probability so use swing stop, but can convert to scalp if quickly goes reward 2 times risk, ok call buy or long
  • Bar 19 - Breakout pullback sell or short but bull body, higher low major trend reversal, probably buyers at the low of week of the bar and probably scaling in lower. Stop below 18, 10 or 9
  • Bar 20 - Outside up bar, more up, always in long, might get above moving average, but ok to take profits around moving average and 8 high
  • [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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