Friday price action climbs, sinks, recovers: Brooks

Brooks Price Action Analysis for Friday, Feb. 28

pending chart 2662

Futures Magazine: The market reversed down at the measured move target based on the bull breakout of the monthly wedge top of Sept. 2012, and has had consecutive buy climaxes on the monthly chart. It is also near the top of the weekly channel, and is at the top of a 60 min expanding triangle. This increases the chances of a pullback lasting several months beginning soon at this level. February is an outside up bar on the monthly chart, so March might be an inside bar, which means that bears who sold today will exit above today�s high, but expect a down March and prob April as well. The probability of a big swing (50 � 200 pts) is low, but the big reward relative to the risk offsets the low probability. Market should hit the bottom of the weekly channel below 1700 within a few months.

  • Friday, February 28, 2014
  • Bar 1 - Yesterday ended with breakout, but 3rd push up so possible wedge. Possible high of the day or low of the day, but doji entry bar, 4 bar tight trading range, probably buy below or buyers at the low of the bar and probably scaling in lower sell above or sellers at the high of the bar and probably scaling in higher, better to wait
  • Bar 2 - Breakout, close on high, more up
  • Bar 3 - Strong follow through, more up, but possible exhaustion gap since strong breakout late in bull.
  • Bar 4 - Fail, failure breakout but probably buy below or buyers at the low of the bar and probably scaling in lower and buy above or buyers above for two legs up, but consecutive buy climax so might reverse soon
  • Bar 5 - Two inside bars ok swing buy or long and possible scalp, but consecutive buy climax so possible pullback soon
  • Bar 7 - Big breakout, just below target = pink line = measured move from monthly fail, failure wedge top. More up
  • Bar 10 - Parabolic wedge 78 3 7 9, consecutive buy climax, fail, failure breakout above measured move target, ok swing sell or short for possible high of the day and high of next several months. Good location for put spreads
  • Bar 11 - Breakout pullback buy or long, ok swing buy or long but probably sell above or sellers at the high of the bar and probably scaling in higher because of resistance on weekly chart
  • Bar 13 - Parabolic wedge at weekly resistance, 13 bar microchannel so consecutive buy climax, ok swing sell or short but still always in long, bull body so better to wait for strong bear breakout
  • Bar 15 - Breakout pullback buy or long, double bottom 8, ok swing buy or long, but probably sell above or sellers at the high of the bar and probably scaling in higher for more sideways to down after parabolic wedge. Swing bears have stops above 14 or 13, swing bulls have stops below 7
  • Bar 17 - Lower high major trend reversal, but only 2 bars up so sideways more likely than down. Still always in long but big reward to new low of the day compared to risk for bears so ok to be sell or short despite low probability
  • [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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