Big gap, sideways trading for Monday price action: Brooks

Brooks Price Action Analysis for Monday, March 31

pending chart 2739

Odds favor test of 1900 resistance levels within next week or 2, but then probably will begin 2-3 months down to bottom of weekly channel (�short in may and go away�). 60 minute double top and head and shoulders top, and double bottom so breakout mode, but end of quarter so bull bias. Building selling pressure on daily chart and top of next few months might already be in. Reasonable area to consider buying put spreads here or around 1900 for 10% pullback. Might get one more push up to test weekly targets around 1900 (top of weekly channel, measured move target) for possible high of next several months. Then, should test 1700 within next few months.

  • Monday, March 31, 2014
  • Bar 1 - Gap up, bull body so ok swing buy or long but small bar, tail so trading range pa and probably sell above or sellers at the high of the bar and probably scaling in higher. Green line = high of last week = target = weekly two legged pullback in a bull move buy or long. Today is last day of month and quarter, and high of last month is 1859.50 = light blue line = magnet at end of day
  • Bar 2 - Follow through so buy below or buyers at the low of the bar and probably scaling in lower. Small bar so more trading range
  • Bar 4 - Double bottom 1, test of gap, ok swing for possible low of the day
  • Bar 6 - Breakout pullback buy or long but top of tight trading range so swing or wait
  • Bar 7 - Wedge 2 5 but bull body, always in long, so swing or wait. Trading range pa, breakout mode. Limit order order market, 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, scalps
  • Bar 11 - Breakout pullback buy or long but probably sell above or sellers at the high of the bar and probably scaling in higher for two legs down from wedge.
  • Bar 13 - Lower high for two legs down, but doji so low probability so swing or wait. Still always in long, stop below 4.
  • Bar 17 - Lower high major trend reversal, double top 13, possible triangle 7 13, but tight trading range, bad for scalping with stop entries unless using swing stop. Ok swing sell or short. Still on swing buy or long. Breakout mode
  • Bar 20 - Fail, failure breakout since bull body, but breakout pullback sell or short below. Swing sell or short, stop above 15 or 19, swing buy or long, stop below 20 or 4. Breakout mode
  • Bar 24 - Test of high of yesterday and high of last month, fail, failure breakout, wedge 14 19, breakout test or bought high of yesterday, but tight channel so better to wait for a strong bull breakout or second entry buy. Still swing sell or short but lots of two-sided trading so probably trading range day so better to buy low sell high and scalp
  • Bar 25 - Breakout pullback sell or short but bottom of weak channel so probably buy below or buyers at the low of the bar and probably scaling in lower and sideways
  • [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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