{"id":31056,"date":"2014-10-27T07:11:51","date_gmt":"2014-10-27T14:11:51","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=31056"},"modified":"2015-01-26T03:31:17","modified_gmt":"2015-01-26T11:31:17","slug":"emini-day-trading-october-27-2014-nested-wedge-top","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/es\/analysis\/market-update\/emini-day-trading-october-27-2014-nested-wedge-top\/","title":{"rendered":"Intraday market update, October 27, 2014:
Nested wedge top"},"content":{"rendered":"

Posted 7:11 a.m.<\/p>\n

The Emini formed a nested wedge top on Friday. Friday’s wedge top was the 3rd leg up in a larger, 4 day wedge top. <\/p>\n

After 3 dojis on the open, the Emini had a bear breakout. Support below is the 60 minute moving average, yesterday’s low, and the bottom of the 4 day wedge. Because the 5 minute chart has been in a two day trading range, traders are aware that the initial selloff might lead to an opening bull trend reversal.<\/p>\n

The selloff was weak and this increases the chances that it is a bear leg within the two day trading range. Although the Emini is currently always in short, traders will be prepared to buy if there is a strong bottom, like a parabolic wedge bottom, or a strong upside breakout. It might form an opening bull trend reversal at the 60 minute moving average.<\/p>\n

This is trading range price action so far, but it can have swings up and down. It is still possible to become a trend day, but it needs a strong breakout up or down to do so.<\/p>\n

The Emini has rallied strongly for 2 weeks after a parabolic sell climax 2 weeks ago. However, it has not yet gone above the October 6 and 8 lower highs. This means that the current rally might still be a buy vacuum test of resistance in a broad bear channel. It could then form another lower high and lead to a new low, below the low of the month. <\/p>\n

The monthly candle closes this week. At the moment, the candle is a big reversal bar. The FOMC report is on Wednesday and it can lead to a big move up or down. If there is a strong rally on the report, it is possible that October may even close above the September high, which was the all-time high. This would create an outside up month. When one forms late in a bull trend, it is more likely an exhaustive move instead of a breakout, but it is still possible that the bull trend on the monthly chart can go much higher before transitioning into a monthly trading range. <\/p>\n

Because the monthly chart is so overbought<\/a>, I think that it is more likely going to transition into a trading range. For example, if there is a big selloff after the FOMC report on Wednesday, that would create a big bear bar, which would increase the chance that the trading range has begun on the monthly chart. The daily chart has been in a trading range for all of 2014.<\/p>\n

Day trading outlook for tomorrow\u2019s Emini price action<\/h2>\n

\"There<\/p>\n

The Emini had a parabolic wedge bottom on the open that was an opening reversal up from the 60 minute moving average. It then formed a wedge lower high and entered a triangle. It closed near the high of the day, but was a small bull inside day on the daily chart.<\/p>\n

Today was a small bull inside day in an overbought market on the daily chart. It is within the October 2 to 8 double top and bottom. The bulls failed to get an upside breakout 3 weeks ago, and the result was a very strong bear breakout. The bulls want a breakout above and then a measured move up to an all-time high. The bears don’t mind if there is a new high because they expect a major trend reversal after the gap bar on the weekly chart. <\/p>\n

The Emini might stay sideways into Wednesday’s FOMC report and then breakout up, down, or both. The breakout also might occur before the report. <\/p>\n

This is the third consecutive trading range day, and that increases the chances that tomorrow will be a trading range day as well. However, the targets are just above and the Emini might get a bull breakout within the next couple of days. If there is a bear breakout, the downside is probably limited by the strength of the rally over the past 2 weeks.<\/p>\n

Premarket price action analysis<\/h4>\n

See yesterday’s intraday market update<\/a> report for today’s premarket analysis. Once there, scroll down to the heading, Day trading outlook for tomorrow’s Emini price action<\/em>.<\/p>\n

See the weekly update<\/a> for a discussion of the weekly chart and for what to expect going into next week.<\/p>\n

\n

Traders can see the end of the day bar-by-bar price action report by signing up<\/a> for free at BrooksPriceAction.com. I talk about the detailed Emini price action real-time throughout the day in the BrooksPriceAction.com trading room<\/a>, and a 2 day free trial<\/a> is available.<\/p>\n

When I mention time, it is USA Pacific Standard Time (the Emini day session opens at 6:30 am PST, and closes at 1:15 pm PST). You can read background information on the intraday market reports on the Intraday Market Update<\/a> page.<\/p>\n

\n","protected":false},"excerpt":{"rendered":"

Posted 7:11 a.m. The Emini formed a nested wedge top on Friday. Friday’s wedge top was the 3rd leg up in a larger, 4 day wedge top. After 3 dojis on the open, the Emini had a bear breakout. Support below is the 60 minute moving average, yesterday’s low, and the bottom of the 4 […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[153],"tags":[],"class_list":{"0":"post-31056","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-market-update","7":"entry","8":"has-post-thumbnail","9":"override"},"featured_image_src":null,"author_info":{"display_name":"Al","author_link":"https:\/\/www.brookstradingcourse.com\/es\/author\/albrooks\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/31056","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/comments?post=31056"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/31056\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media?parent=31056"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/categories?post=31056"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/tags?post=31056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}