Monday price action breaks sharply lower: Brooks

Brooks Price Action Analysis for Monday, April 7

pending chart 2753

Strong follow through on daily so more down likely, but wedge bottom so two legs up likely tomorrow. Weekly sell or short triggered so possible high of next several months. Probably will test bottom of weekly channel (�short in May and go away�) and possible 1700 within next few months. Reasonable area to consider buying put spreads or on bounce, possible to 1870, for 10% pullback.

  • Monday, April 7, 2014
  • Bar 1 - Lower low major trend reversal but tails and possible trend from the first bar bear after yesterday strong bear. Weekly reversal bar at top of channel so might begin move down to 1700 and bottom of weekly channel. Always in short so ok swing sell or short, looking for follow through on daily, but consecutive sell climax so might get major trend reversal up. Since possible start of bear trend, might get so in final hour to create bear bar on daily
  • Bar 2 - Strong bear bar, more down
  • Bar 3 - Another strong bear bar but bottom of channel, far below moving average. More down but might reverse for low of the day soon
  • Bar 4 - Lower low major trend reversal but doji so better to wait for a strong bull breakout or second entry buy. Possible low of the day but more likely sell above or sellers at the high of the bar and probably scaling in higher and more sideways to down. Probably rally soon since consecutive sell climax, trend channel line
  • Bar 5 - Small entry bar but gap. Possible low of the day, ok swing
  • Bar 6 - Big bull bar, close on high, always in long, but stop below 6 5 or 4 so trade small or wait. Bears see as possible double top, like yesterday
  • Bar 7 - Double top 1 but always in long so buy below or buyers at the low of the bar and probably scaling in lower. Bad follow through so possible trading range
  • Bar 8 - Breakout pullback buy or long, ok swing and possible scalp
  • Bar 9 - Weak follow through so trading range pa so far. Fail, failure double top so wedge, possible high of the day. Bull bar, always in long, so probably buy below or buyers at the low of the bar and probably scaling in lower and then trading range. Low probability sell or short, but ok swing
  • Bar 13 - Higher low but 3 bear bars, middle of trading range day so low probability. Better to wait for a strong bull breakout or second entry buy. If buy or long, stop below 4. If stopped out, look to buy or long again
  • Bar 14 - Outside down bar but still above 4 low so probably more buyers than sellers. Trading range day, buy low sell high and scalp. Still always in long, stop below 4
  • [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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