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. This is his analysis for Wednesday, May 14, 2014.
- Bar 1 - Yesterday ended always in short since 22. Breakout below tight trading range, close on low, ok sell or short but might get fail, failure breakout of tight trading range
- Bar 2 - Follow through, more down, sell above or sellers at the high of the bar and probably scaling in higher, but tail so not strong
- Bar 3 - Breakout pullback sell or short but bull doji, just above 60 minute 20 bar exponential moving average so swing only
- Bar 5 - Or 60 minute 20 bar exponential moving average, two legged pullback in a bull move 2, possible low of the day, but tight channel so swing buy or long only or wait, or buyers below, sellers above for trading range
- Bar 7 - Double top at moving average, ok swing sell or short, but probably always in long, buy below or buyers at the low of the bar and probably scaling in lower, trading range, breakout mode, but might even fall to new low of the day before trying to reverse.
- Bar 11 - Fail, failure breakout low of the day, double bottom 60 minute 20 bar exponential moving average, but doji, trading range pa, breakout mode.
- Bar 13 - Another lower high below moving average in broad bear channel, but low probability so swing or wait. Probably buy below or buyers at the low of the bar and probably scaling in lower since trading range pa
- Bar 16 - Big outside up bar, close above 14, possible low of the day, but bulls need follow through, else more trading range
- Bar 17 - Fail, failure breakout, lower high, two legged pullback in a bear move 13, but probably buy below or buyers at the low of the bar and probably scaling in lower and more trading range. Still on swing sell or short for broad bear channel but low probability until breakout up and or down
- Bar 20 - Fail, failure breakout 16 but 3 bear bars, low probability, possible low of the day. Limit order market, sellers scaling in above, buyers below, both scalping. Low probability sell below or sellers below or signal bar for breakout pullback sell or short. Trading range, about half of average daily range, so possible trending trading range day. Tight trading range, bad for scalping with stop entries unless using swing stop
- Bar 23 - Breakout pullback sell or short, bear reversal bar below moving average, ok swing sell or short, but probably buy below or buyers at the low of the bar and probably scaling in lower since bottom of trading range. Breakout mode. Good buying pressure but bulls need breakout above moving average, else might get bear breakout
Tight trading range, late bear breakout, reversal down from all time high. For more, see http://brookstradingcourse.com/how-to-trade-manual/trend-reversals. Might form 60 minute expanding triangle top around 1910 or, less likely, reach top of weekly channel around 1940. Odds favor trend down to 1700 area over the next few months, but no clear top yet. Reasonable to consider buying put spreads here or around 1900 for move down to around 1730 bottom of weekly channel within next few months. “Sell in May and go away.”