Tuesday price action gaps higher, drifts sideways: Brooks

Brooks Price Action Analysis for Tuesday, Jan. 7

pending chart 2519

Trend from the first bar bull, lower high major trend reversal, two legged pullback in a bull move

  • Tuesday, January 7, 2014
  • Bar 1 - Doji, measured move targets above, 3 day trading range, buyers at the low of week of the bar and probably scaling in lower sellers at the high of the bar and probably scaling in higher.
  • Bar 2 - Close above 1 so possible measuring gap, but probably sellers at the high of the bar and probably scaling in higher since 1 doji and 2 tail
  • Bar 5 - Trend from the first bar bull, 5 bars up, buyers at the low of week of the bar and probably scaling in lower. Weak rally so probably trading range soon
  • Bar 6 - Breakout, possible measuring gap. 7 bars without pullback so buyers at the low of week of the bar and probably scaling in lower. Less likely, exhaustion gap, high of the day, fail, failure breakout high of yesterday. Bears should wait for second entry sell
  • Bar 8 - Breakout pullback buy or long but 2 dojis, high of yesterday, probably tight trading range. Better to buyers at the low of week of the bar and probably scaling in lower. Trend from the first bar bull so low probability sell or short above
  • Bar 9 - Micro double top but trend from the first bar bull, 3 dojis, probably buyers at the low of week of the bar and probably scaling in lower for scalp
  • Bar 10 - Two legged pullback in a bull move but tight trading range, bad for scalping with stop entries unless using swing stop. Possible sellers at the high of the bar and probably scaling in higher for more tight trading range but better to only look to buy or long until better top or bear breakout
  • Bar 13 - Breakout pullback buy or long, always in long, but tight trading range so use swing stop below 6 or 2, or wait.
  • Bar 16 - Final flag 14, possible high of the day, two bar revresal, but tight channel so probably buyers at the low of week of the bar and probably scaling in lower. More likely sideways to down to moving average than down. Always in long, stop below 10, 6, 2, or 1
  • Bar 21 - Breakout pullback buy or long but 6 bars down after 15 bc, close to moving average. Probably sellers at the high of the bar and probably scaling in higher and more sideways to down to moving average. Only buy or long if swing stop
  • Bar 25 - Two legged pullback in a bull move at moving average but tight channel, tight trading range, bad for scalping with stop entries unless using swing stop. Ok swing but more sideways likely. Bears need major trend reversal or strong breakout, else still always in long. Better to wait
  • [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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