Monday price action closes significantly lower: Brooks

Brooks Price Action Analysis for Monday, March 3

pending chart 2669

Futures Magazine: After testing the monthly measured move target Friday, the market gapped down today and formed a trading range day. Friday might be the high for the next few months and it had nothing to do with the Ukraine. It reversed down from the 1863 target that I�ve talked about every day for the past year. There is news every day and reporters always say that the market moves are due to the news. They are not. They are caused by tests of support and resistance. If this is a top, it might take several weeks before we see the move down, like after the Sept 14, 2012 buy climax. The year will likely be in a 200-300 point trading range in the S&P. As long as the market stays below Friday�s high, prob better to sell rallies.

  • Monday, March 3, 2014
  • Bar 1 - Fail, failure breakout low of yesterday, gap down to bottom of 4 day trading range, strong reversal bar, ok buy or long for possible low of the day, but more trading range most likely. Always in long
  • Bar 2 - Strong follow through, buy below or buyers at the low of the bar and probably scaling in lower, but trading range likely so might fall below 2 entry bar. Better stop below 1. Some will add to longs below 1
  • Bar 5 - Two inside bars, always in long, buy below or buyers at the low of the bar and probably scaling in lower and probably below 2
  • Bar 6 - Breakout pullback buy or long but tight trading range, bad for scalping with stop entries unless using swing stop. Always in long but weak. Bulls need to get above moving average, else possible double top high of the day
  • Bar 8 - Double top 2 7 below moving average, possible high of the day, bear inside bar, ok swing sell or short
  • Bar 11 - Higher low major trend reversal, held above 1 low, swing buy or long, stop below 1. Bear body so low probability. Swing sell or short stop above 8, breakout mode
  • Bar 12 - Bull breakout but bears will sell or short close, stop above 8 bear breakout, betting on channel down. Low probability up and or down, breakout mode
  • Bar 13 - Breakout pullback sell or short but far from moving average. Ok to wait for breakout below 1 or for closer to moving average. Probably buy below or buyers at the low of the bar and probably scaling in lower and more sideways
  • Bar 18 - Bull breakout but at moving average. Bulls will buy or long, stop below 18 or 17, or they will wait for follow through. Bears will sell or short, stop above 8
  • Bar 19 - Two legged pullback in a bear move 12 at moving average, fail, failure breakout, but middle of trading range day so low probability, swing
  • Bar 20 - Bear breakout, but need follow through, else two legged pullback in a bull move 10 and bottom of trading range day
  • [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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