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 (CME:SPM14). This is his analysis for Tuesday, May 6, 2014.
- Bar 1 - Gap down, close at bottom of yesterday trading range, but far above low of yesterday bull breakout so possible higher low and low of the day soon. 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
- Bar 2 - Bear follow through but tail. Might form low of the day soon
- Bar 3 - Expanding triangle 20 46, but 3 bear bars so sideways more likely. Possible low of the day
- Bar 7 - Tight trading range, bad for scalping with stop entries unless using swing stop, probably buy below or buyers at the low of the bar and probably scaling in lower since bottom of tight trading range and yesterday trading range, and yesterday had strong bull reversal
- Bar 9 - Double bottom 3, good bull bar, good swing buy or long
- Bar 10 - Weak entry bar. Stop below 9, but ok to take 2 points profit until clearly trend up and or down
- Bar 16 - Double top 1 at moving average, second entry sell. Ok swing sell or short but weak sbm, 5 bars up so low probability and probably more trading range
- Bar 18 - 2 strong bear bars, always in short, but need breakout and follow through below low of the day
- Bar 19 - Double bottom 3, still above yesterday bull reversal low so still big bull flag, but 2 strong bear bars so probably sideways to moving average. Low probability buy or long
- Bar 23 - Breakout pullback sell or short but 5 bar microchannel. More sideways. Breakout mode
- Bar 29 - Wedge 23 26, ok swing sell or short below and swing buy or long above, but breakout mode and better to wait for strong breakout up and or down
Today was a trending trading range day and broad channel bear trend. I also discuss trading ranges more and channels. Might go above high of yesterday and from 60-minimum or minutes wedge top. Less likely, more bull trend above all time high. I think 60% chance may will not go above April and April will be the high of the next several months. May on monthly chart might be outside bar surrounded by inside bars for start of move down to 1700. Since near high of April, odds favor early selloff in may. Bulls want a move up to all time high and 1900 top of weekly channel, but more likely the high is in for at least several months. 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.