![\"S&P500](\"\/wp-content\/uploads\/2014\/08\/ES8-600x306.jpg\" "\\"\\"")
<\/p>\n<\/p>\n
I posted this S&P500 Emini candle chart after the close. The Emini had a trending trading range day and closed near the open of the day, and therefore formed a doji candle on the daily chart. The second leg down was a channel and therefore the day was also a spike and channel bear trend. As expected, the rally from the low tested the top of the channel by the end of the day.<\/p>\n
Time of update 7:41 a.m. PST.
\nThe Emini is having a breakout mode trading range open. The Emini closed the gap below yesterday’s low and reversed up. This might be the start of a second leg up, even though the pullback from yesterday’s high does not appear to have enough bars compared to the size of the 5 day wedge bottom. There is usually more symmetry when the market forms the right side of the pattern (a higher low major trend reversal, which is a head and shoulders bottom). This means that the Emini might have to go sideways to down for another day or two.<\/p>\n
The S&P500 Emini is in breakout mode for day traders. Day traders are waiting for a breakout up or down. Once it forms, they then will look for a pullback and a second leg. Since the opening range is big, the breakout might not go far enough to create a measured move based on the entire opening range. However, it could fall for a measured move based on the high of the day to the open of the day. If so, the open will be a magnet at the end of the day, and the day could become a large trading range day, forming a doji bar on the daily chart. <\/p>\n
At the moment, this big trading range open will probably lead to a small trend day or a trading range day. If the breakout is big enough, however, the day could become a trend day.<\/p>\n
The Emini rallied for a day and a half up from a wedge bottom that lasted 5 days, and then it pulled back yesterday at the 20 bar exponential moving average on the daily chart. A wedge bottom trend reversal usually has a second leg sideways to up. The pullback might continue today. Whether it ends today or tomorrow, it probably will be followed by a second leg sideways to up. The bulls will see that reversal up as a higher low major trend reversal (the right shoulder of a head and shoulders bottom). The top of the first leg up, which was yesterday’s high, was just above last week’s high, which is a 60 minute lower high. The bears hope that this double top leads to a breakout below last week’s low and then a measured move down. If the second leg up stalls again at last week’s high, the Emini will have created a large triangle, which can breakout in either direction.<\/p>\n
The S&P500 Emini higher time frame charts (60 minute, daily, and weekly) still look like they will have a second leg down once the 5 minute two-legged rally is finished.<\/p>\n
See the weekly update<\/a> for a discussion of the weekly chart.<\/p>\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
\n