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 fo Tuesday, May 13, 2014.
- Bar 1 - Yesterday ended always in long at all time high, but weak channel so early pullback likely. Bull breakout above bull channel, but doji, so weak and will probably fail, failure soon. Next target = 1900 and top of 60 minimum or minutes expanding triangle around 1910 where there are measured move targets as well.
- Bar 2 - Breakout pullback buy or long but 2 dojis, top of channel, low probability. Probably early high of the day since breakout of top of bull channel usually fails
- Bar 4 - Fail, failure breakout top of channel and high of yesterday, second entry sell, 9t fail, failure, possible high of the day but bull body so low probability
- Bar 6 - Double bottom 2 at moving average but 2 bear bars. Sell above or sellers at the high of the bar and probably scaling in higher. Limit order market, sellers scaling in above, buyers below, both scalping so far
- Bar 10 - Wedge 1 4, double top 4 but 1t bear body, low probability. More limit order market, sellers scaling in above, buyers below, both scalping, trading range so far
- Bar 15 - Wedge 4 10 but tight channel, 1900 magnet above. Low probability, probably buy below or buyers at the low of the bar and probably scaling in lower, but ok swing sell or short. Upside probably limited since buy climax. 60 minimum or minutes has 10 consecutive bars without bear body so extreme and should get sideways to down soon
- Bar 18 - Breakout, probably will test bottom of channel and 6 low
- Bar 21 - Another breakout, probably always in short for test of bottom of channel. Trading range day so far, but might become trend
- Bar 23 - Double bottom 6 but doji and bottom of channel 2t below so sell above or sellers at the high of the bar and probably scaling in higher. Low probability buy or long
- Bar 24 - Bull breakout of double bottom but sell the close for test of bottom of channel. Better to wait for a strong bull breakout or second entry buy
- Bar 25 - Breakout pullback sell or short, but target five tick failure below so only sell or short if wide stop and scale in, swing or scalp. Might fall for measured move down from high of the day to open of day to around 1890
Doji day, weak follow through after yesterday’s breakout to all time high. For more, see http://brookstradingcourse.com/how-to-trade-manual/day-trading-open and http://brookstradingcourse.com/how-to-trade-manual/trading-ranges. 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.”