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 Thursday, July 17, 2014.
- Bar 1 - Blue line is last week's high and last week is the sell below or sellers below or signal bar for a high 1 buy or long on the weekly chart. Pink line = all time high and top of the 60 minimum or minutes wedge. Bears will sell or short here for a 60 minimum or minutes double top with small risk and huge reward. The probability will go up if there is a bear breakout. Doji, but not close to support and/or resistance so limit order order traders will probably wait and consider selling 1-2 points above or buying 1-2 points below. Possible high of the day or low of the day, but low probability so swing or wait
- Bar 2 - Big bull bar, consecutive bull bodies, two legged pullback in a bull move 27, always in long, but trading range for 2 weeks
- Bar 4 - Fail, failure breakout low of yesterday and 60 minute 20 bar exponential moving average, but probably always in long, buy below or buyers at the low of the bar and probably scaling in lower. Disappointing follow through, trading range price action.
- Bar 5 - Outside up bar, possible measuring gap, but just below moving average and high of last week
- Bar 7 - Two legged pullback in a bear move at moving average and high of last week, but only 1 bear body today so low probability sell or short. Sideways more likely than high of the day. Weak follow through after 2 and 5, stall at resistance, probably trading range. Might test 5 low
- Bar 9 - Fail, failure two legged pullback in a bear move, always in long, ok swing buy or long but sideways more likely. Bad follow through after strong bull bars so probably bull leg in trading range
- Bar 13 - Parabolic wedge 3 7 at hlr and yesterday tight trading range,poss high of the day, ok swing sell or short, but tight channel so tight trading range more likely than down
- Bar 14 - Breakout pullback buy or long but consecutive bear bars, parabolic wedge, probably sell above or sellers at the high of the bar and probably scaling in higher. Possible tight trading range, or test 9 low or 5 low. Still always in long
- Bar 19 - Breakout
- Bar 20 - Close on low, sell the close
- Bar 21 - Sell the close
- Bar 22 - Fail, failure breakout, reversal bar, but bear body. Big tail so possible bounce here, or bottom within 1 -3 bars
The dominant price action feature of the today is the parabolic wedge top and reversal down from last week's high, then the wedge bottom, and finally the tight bear channel that fell below the 60 minute higher low. There is a 10 bar (10 week) bull microchannel on the weekly chart and last week was the first pullback. This makes last week into a buy signal bar, and traders using the weekly chart will buy above its high for a breakout pullback buy (a high 1 buy setup). This week is the weekly entry bar. The market usually goes to one more new high for 1 - 3 bars and then has at least at least two legs down. Since this is the weekly chart, the pullback is usually at least 10 bars and two legs, or 10 weeks, as the minimum goal. Once the top is in, downside targets for the pullback are the bottom of the wedge on the daily chart, around 1917.50, and the top of the breakout point on the daily chart, around 1890, and the weekly trend line, which is around this same area. For more the current S&P 500 and E-mini weekly charts, see Intraday market update.