{"id":59027,"date":"2016-10-13T05:30:07","date_gmt":"2016-10-13T12:30:07","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=59027"},"modified":"2016-10-13T21:48:58","modified_gmt":"2016-10-14T04:48:58","slug":"failed-bear-breakout-october-selloff-possible","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/es\/analysis\/market-update\/failed-bear-breakout-october-selloff-possible\/","title":{"rendered":"Failed bear breakout, but October selloff still possible
Intraday market update: October 13, 2016"},"content":{"rendered":"

Failed bear breakout, but October selloff still possible<\/h2>\n

Updated 6:45 a.m.<\/p>\n

The Emini opened with a big gap down. Yet, the 1st bar was a doji and the 2nd and 3rd bars had tails below. Therefore there is no sense of urgency. Traders feel that the price is about right. This increases the chances of a trading range for the 1st hour or two. The bulls will look for a strong reversal up or a double or wedge bottom. They need a strong breakout above the moving average if they are to create a bull trend day. The bears will look to sell a double top or wedge top near the moving average.<\/p>\n

The Emini is Always In Short and is in a sell vacuum down to the September low. The bulls bought there last month and might again today. The bears need a strong breakout below. If they get it, the Emini will probably trade below the July 2015 high within a week.
\n<\/p>\n

Pre-Open Market Analysis<\/h2>\n

The Emini has rallied for a day and a half after Monday’s selloff. Hence, this is bad follow-through from that selloff. It therefore increases the chances that the month-long trading range will continue.<\/p>\n

As a result, nothing has changed in 2 months. The bears still believe that there will be a brief 100 point selloff from the August 15 and 23 tight trading range double top. In addition, the bulls believe that the bears will give up. Hence, they want a bull breakout above this month-long bear flag. Furthermore, they want a measured move up, which would result in a new all-time high. <\/p>\n

Because the trading range on the daily chart has lasted about 20 bars, the probability for the bulls and bears is now 50%. Traders will continue to take quick profits until there is a strong breakout with follow-through.<\/p>\n

Emini Globex session<\/h3>\n

The Emini is down 13 points in the Globex session. If it opens here, it will gap below yesterday’s low. Yesterday was an inside bar on the daily chart after a bear breakout. Hence, it was a sell signal bar. A gap down would trigger the sell signal. <\/p>\n

The 1st target is the September low. That low was a test of the July 2015 trading range high, and therefore a breakout test. The bulls will therefore again try to defend the gap if the Emini gets there. Yet, a gap this late in a bull trend has a 70% chance of closing before the rally can get far. Therefore, it is more likely that a test of the September low would fail. As a result, the Emini would probably continue below the 2084 top of the 2 year trading range.<\/p>\n

Because the selloff has lacked consecutive big bear bars closing on their lows, the bears still only have about a 50% chance of achieving their goal during the current 3 day selloff. Yet, with so many bulls believing that the gap will stay open and the Emini will continue up to a new high, a single big bear bar could change their minds. <\/p>\n

As a result, all of the bulls who bought since July would suddenly be holding losing positions in a quickly falling market. They would quickly sell, adding the to bear breakout. This therefore has the potential to lead to a sudden, big move down. One target is the July 6 low, which was the 1st pullback from the bull rally.<\/p>\n

<\/p>\n

Forex: Best trading strategies<\/h2>\n

\"EURUSD<\/a><\/p>\n

The 60 minute EURUSD chart had a sell climax in an oversold bear trend. It reversed up overnight from 2 measured move targets. The odds are that it will have at least 10 bars and 2 legs sideways to up to the top of the sell climax.<\/p>\n

The 60 minute EURUSD chart has fallen for over 100 bars without much of a correction. That is extreme and therefore a sell climax. There was a big bar yesterday, and hence and extreme final sell climax. When that happens, the EURUSD market often has a small, brief 2nd leg down that is about the height of the bod of that sell climax bar. Last night’s reversal was also at a measured move projection from the breakout 2 days ago. Therefore, traders expect Ten Bars, Two Legs sideways to up to the top of the sell climax as the minimum goal of the bear rally. While the 5 minute chart has a wedge top, bulls will probably buy the reversal down.<\/p>\n

<\/p>\n

Summary of today’s S&P Emini futures price action and what to expect tomorrow<\/h2>\n

\"buy<\/a><\/p>\n

The Emini gapped down and reversed up from the September low. After a series of buy climaxes, it failed to hold above yesterday’s close.<\/p>\n

While the Emini reversed up on the daily chart and formed a buy signal bar for tomorrow, the late selloff created a tail on the top of today’s bar. Hence, it is a weaker buy signal bar. Despite the bull reversal, the odds still slightly favor a test below the July 2015 low before a new high.
\n<\/p>\n

See the weekly update<\/a> for a discussion of the price action on the weekly candlestick 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 S&P Emini futures price action real-time throughout the day in the BrooksPriceAction.com trading room<\/a>. We offer a 2 day free trial<\/a>.<\/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":"

Failed bear breakout, but October selloff still possible Updated 6:45 a.m. The Emini opened with a big gap down. Yet, the 1st bar was a doji and the 2nd and 3rd bars had tails below. Therefore there is no sense of urgency. Traders feel that the price is about right. This increases the chances of […]<\/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-59027","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\/59027","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=59027"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/59027\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media?parent=59027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/categories?post=59027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/tags?post=59027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}