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:ESU14). This is his analysis for Tuesday, July 22, 2014.
- Bar 1 - The blue line above is the all time high, which is also the top of the 60 minimum or minutes wedge. The all time high close is 3t below and also a target at the end of day. The bulls want the breakout and measured move up and the bears want the double top. Possible low of the day, ok swing, but small bar, just below all time high so low probability
- Bar 2 - Fail, failure breakout but doji, low probability possible high of the day. Limit order market, sellers scaling in above, buyers below, both scalping
- Bar 4 - Two legged pullback in a bull move 1 but tight trading range, bad for scalping with stop entries unless using swing stop. Better to wait. Breakout mode, limit order market, sellers scaling in above, buyers below, both scalping, on swing buy or long and sell or short, but both low probability
- Bar 5 - Fail, failure breakout high of yesterday second entry sell but bull body. Consecutive bull bodies, always in long, probably buy below or buyers at the low of the bar and probably scaling in lower
- Bar 6 - Breakout pullback buy or long, breakout mode, but low probability
- Bar 9 - Fail, failure breakout double top and all time high so wedge 2 5, but tight channel, small bars, so low probability
- Bar 11 - Breakout pullback buy or long but small bars, 3 bars down, so low probability. Still always in long. Ok swing buy or long or sell or short, but higher probability to wait for strong breakout up
- Bar 13 - Fail, failure breakout all time high second entry sell but outside down bar, small bar, and 12 has bull body. Low probability
- Bar 14 - Two legged pullback in a bull move, always in long, but tight trading range, bad for scalping with stop entries unless using swing stop. Ok to wait for higher probability = breakout up and or down
- Bar 20 - Wedge top, possible high of the day, ok swing sell or short but better to wait for a strong bear breakout or second entry sell
- Bar 26 - Two legged pullback in a bull move but tight trading range, bad for scalping with stop entries unless using swing stop, moving average magnet just below. Bears want small pullback bear and bear breakout. Trend resumption or trend reversal, but still always in long so bulls have slightly higher probability
- Bar 36 - Breakout, but weak and still below 20 wedge top. Still always in long, stop below 35 or 26, but weak rally and probably will evolve into trading range. Less likely, strong bull breakout above 20 wedge and measured move up
The dominant price action feature of the today is the breakout to the all-time high, and then the tight trading range around the all time high. The market is at the top of the channel on the weekly chart, so the odds favor a reversal down to the bottom of the channel over the next couple of months, just below 1900. For today's real-time update, see Intraday Market Update. For more on the current S&P 500 and Emini weekly charts, see Weekly market update.