Al Brooks provides bar by bar analysis on a five-minute chart of the previous day’s prices action in the E-mini S&P 500. Today's post looks at Friday, April 25, 2014.
- Bar 1 - Breakout, close on low, but small bar, bottom of 3 day trading range so swing only. Today is friday, pink line =oow = magnet
- Bar 5 - Fail, failure breakout low of yesterday second entry buy, two legged pullback in a bull move, good bull bar, 2t tail, ok swing but not high enough probability unless swing stop and scale in for scalp
- Bar 7 - Wedge 2 4, possible low of the day, ok swing buy or long but bear body, tight channel, not high enough probability unless swing stop and scale in for scalp
- Bar 11 - Double top 3, ok swing buy or long, but probably buy below or buyers at the low of the bar and probably scaling in lower
- Bar 12 - Close on low, good for bears
- Bar 13 - Follow through, always in short, probably measured move down
- Bar 16 - Two inside bars but tight channel so swing sell or short or better to wait for a strong bull breakout or second entry buy. Bear trend day so far
- Bar 20 - Tail, parabolic wedge from 12 14 spike, so might bounce. Bulls will start to scalp, but they need major trend reversal or strong breakout before swinging. Bears will continue to sell above or sellers at the high of the bar and probably scaling in higher. Sell climax so might go sideways to up to moving average.
- Bar 21 - Parabolic wedge 7 14, wedge 54 7, two bar revresal, consecutive sell climax, possible low of the day, but low probability. Bulls might start to scalp bear closes and below bars, bears will sell above or sellers at the high of the bar and probably scaling in higher, especially near moving average
- Bar 23 - 3 bars up so might get bull breakout of bear flag since parabolic wedge at support = open of week. Better to wait for a strong bull breakout or second entry buy. Probably bears around moving average and trading range around open of week
- Bar 26 - Twenty gap bars sell or short, but 7 bar bull microchannel so big down, big up and sideways likely 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. Possible bear channel so ok swing sell or short
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Chart: Lower low major trend reversal today and the week closed with a doji bar on the weekly chart. Bulls want a move up to all time high and 1900 top of weekly channel. Near open of month and high of last month and this month closes on Wednesday so might stay in narrow range until then. Odds favor trend down to 1700 area, but possible one more new all time high first. Reasonable to consider buying put spreads here or around 1900 for move down to around 1730 bottom of channel within next few months ("short in may and go away").