Key pattern suggests impending bounce: Brooks

Brooks Price Action Analysis for Wednesday, Feb. 5

pending chart 2603

Double top, double bottom major trend reversal, higher low major trend reversal, wedge top at bull trendline on daily so should bounce soon. Probably trading range into fri unempl report

  • Wednesday, February 5, 2014
  • Bar 1 - Expanding triangle 55 73, magnet 78 double top, big bar bug tail. Trading range bar so sellers at the high of the bar and probably scaling in higher
  • Bar 2 - Micro double top, breakout pullback sell or short, similar open to big bear mon. Swing sell or short below. Trading range day likely after sell climax 2 days ago and with report fri tail, but should test low of yesterday. Trading range day likely
  • Bar 6 - Double bottom low of yesterday, wedge 1 4, parabolic wedge 55 73, but bear body. Possible low of the day
  • Bar 7 - Big bull bar, new high of the day, but lower high 78 so bears will swing sell or short. Probably always in long, stop below 6 or 7. Trading range likely
  • Bar 8 - Double top 2, lower high in channel 78, big two bar revresal, but trading range. Breakout pullback sell or short, but low probability to sell or short at bottom of trading range. Might test bear low of 2 days ago for big double bottom
  • Bar 10 - Sell the close but tail so maybe 1-2 more bars down before trading range
  • Bar 12 - Double bottom major trend reversal, possible sell vacuum test of bear low, big bull bar but strong 4 bear bars so sideways more likely. Swing buy or long but better to wait
  • Bar 14 - Breakout pullback sell or short but strong reversal up, many reversals today so trading range pa. Buyers at the low of the bar and probably scaling in lower sellers at the high of the bar and probably scaling in higher, sideways likely. Close on low so bulls will not buy or long low of bar and only buy or long 2-4 points lower
  • Bar 17 - Higher low but doji, below moving average. Sellers at the high of the bar and probably scaling in higher, trading range
  • Bar 18 - Double top 14 below moving average but tight trading range, bad for scalping with stop entries unless using swing stop. Ok swing, but probably always in long, buyers at the low of the bar and probably scaling in lower and below 16 and 13 for scalps.
  • Bar 20 - Higher low major trend reversal but bear body, still below moving average. Trending trading range day so far. Good location for swing bulls, but sideways into fri report likely. Bulls need breakout above moving average = resistance all day. Probably will get to open of day for doji day. Bears want more channel down
  • [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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