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 Friday, August 8, 2014.
- Bar 1 - Today is Friday so support on the weekly chart is important, like the moving average, 1900, lly, close of last week, and open of week. Yesterday reversed up at the close from a 5 day wedge bottom at 1900 support, just above may 27 gap, so possible rally to wedge top 1937 over next few days. Today, gap up to 15 minute 20 bar moving average plotted on a 5 minute chart, but doji so buy below or buyers at the low of the bar and probably scaling in lower down to moving average. Possible high of the day, but low probability
- Bar 2 - Bear follow through, more down to moving average. Doji so trading range price action
- Bar 4 - Hlmtr after wedge bottom, opening reversal at moving average but big bar and big bear 3. Big down, big up so probably sideways, but context is good for bulls since reversal up from support yesterday. Ok swing buy or long for low of the day, but some sideways likely
- Bar 6 - Double top 1, ok swing sell or short, but 2 reversals so breakout mode, bulls and bears scaling in, both swinging. Bulls have slightly higher probability because of the major trend reversal at support
- Bar 7 - Double bottom 4 but top of tight trading range. Still limit order market, sellers scaling in above, buyers below, both scalping, breakout mode, bulls and bears scaling in, both swinging, okay swing but higher probability if wait for breakout up and or down, or fade with limit order orders and scalp
- Bar 8 - Fail, failure breakout, double top 1, but tail. Tight trading range, bad for scalping with stop entries unless using swing stop. Stop entry traders should okay swing but higher probability if wait for breakout
- Bar 14 - Higher low major trend reversal, two legged pullback in a bull move 4, strong bull bar
- Bar 15 - Bull breakout, always in long, probably will go for two legs up and mmu
- Bar 17 - Fail, failure breakout, lower high, but strong breakout and two legs up so buy below or buyers at the low of the bar and probably scaling in lower, but need wide stop since top of trading range. Expanding triangle 1 8, fail, failure breakout 60 minute 20 bar exponential moving average, lower high 51, but strong enough so buy below or buyers at the low of the bar and probably scaling in lower
- Bar 25 - Wedge 16 21 at 60 minute 20 bar exponential moving average, double top 51, fail, failure breakout 51, but nesp so low probability sell or short and possible high of the day. Probably buy below or buyers at the low of the bar and probably scaling in lower around moving average and 19 low. If bulls holding swing longs, need stop at least below 19. Bulls will buy or long pullback. Ok to take profits and buy or long pullback or bull breakout
- Bar 31 - Fail, failure breakout above wedge top at 60 minute 20 bar exponential moving average, but always in long so swing sell or short only and probably buy below or buyers at the low of the bar and probably scaling in lower around moving average or 19 low. Bear scalpers should sell above or sellers at the high of the bar and probably scaling in higher bars, not below, until clearly in trading range
- Bar 33 - Possible triangle 23 28, bull inside bar, but just below resistance and tight trading range, bad for scalping with stop entries unless using swing stop, and just above moving average, which the market should touch when there is this much selling pressure. Better to wait for strong breakout or pullback. Low probability sell or short below, but possible high of the day so ok swing, but okay swing but higher probability if wait for breakout up and or down
The E-mini's dominant price action feature of the today is the higher low major trend reversal after yesterday's four day wedge bottom at support. For today's real-time update, see Intraday Market Update. Last week was a strong bear BO on the weekly chart, but the bar is at the MA. This is week is the follow-through bar. The bulls want a bull body on this week's bar as a sign that last week was just a PB to the weekly MA. The bears want a bear body, and especially a big bear char that closes far below the weekly moving average, to confirm last week's bear reversal and increase the chances of lower prices. For more on the current S&P 500 and E-mini weekly charts, see Weekly market update.