{"id":47146,"date":"2016-01-07T05:52:01","date_gmt":"2016-01-07T13:52:01","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=47146"},"modified":"2016-01-07T20:45:27","modified_gmt":"2016-01-08T04:45:27","slug":"iprice-action-day-traders-see-a-sell-climax","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/pt-br\/analysis\/market-update\/iprice-action-day-traders-see-a-sell-climax\/","title":{"rendered":"Intraday market update: January 7, 2016
Price action day traders see a sell climax"},"content":{"rendered":"

Posted 6:51 a.m.<\/p>\n

The Emini reversed up strongly on the 2nd bar after testing the October 5 gap. The follow-through has been weak, but when there is an extreme sell climax on the 60 minute chart and a strong reversal up at support on the daily chart, the day is not likely to be a bear trend day. This means that today will either be a bull trend day or a trading range day. The Emini is currently Always In Long, but only 2 of the 1st 4 bars are big bull bars. This increases the chances of an early trading range. The bull bars were strong enough so that the reversal down will probably be bought.<\/p>\n

Pre-Open Market Analysis
\nS&P 500 Emini: <\/h2>\n

The Emini is down 46 points in the Globex session. Yesterday triggered the sell signal on the daily chart that I discusses. It was a bear breakout below a small breakout of a small breakout, which is a type of failed wedge bull flag. Yesterday’s breakout was big enough to make lower prices likely. Today will probably open with a big gap down. These 2 days were caused by the trading range bulls finally giving up, and by strong bears selling to trap the bulls even more. <\/p>\n

Both want a rally. The bulls want a rally to allow them to exit with a smaller loss. The bears will start to take profits after such an unexpected gift. They want a rally that will allow them to sell again higher. With both the bulls and bears looking to sell a rally, maybe to the bottom of the 3 month trading range around 1980, there is a 60% chance that there will then be at least a 2nd leg down. There is also a 60% chance of a test of the August low, a 30% chance of a test of the monthly bull trend line around 1700, and a 20% chance of a test of the double top on the monthly chart around 1600.<\/p>\n

Because the 2 days of selling ha been so extreme, it will probably attract profit taking bears and bull scalpers. The result will probably be a trading range or a pullback that begins today or tomorrow. However, the odds are that the first reversal up will be sold.<\/p>\n

The Globex session has been in a narrow range for about 6 hours. It is in breakout mode. The bulls want a reversal up and the bears want one more leg down. After such an extreme sell climax, if there is a bear breakout, the trading range will probably be the final bear flag before a reversal up for a day or two. Bulls and bears will probably be looking to buy a reversal up today. Although the bears will be willing to sell a strong trend down on the open, they will be quick to exit because the Emini is in a sell climax. The result can be a sharp reversal up at any time in the next day or two.<\/p>\n

If there is a reversal up today, especially if it contains consecutive big bull trend bars closing near their highs, bulls will swing trade for a possible bull trend day. If there is an early trading range, bears will look to swing trade below a bear sell signal bar near the top, but they will be quick to take profits on a reversal. If there is a trading range with a buy signal bar near the bottom, bulls will buy for a swing trade. If there is a trading range with no good signal bars and no good breakouts, day traders will scalp.<\/p>\n

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

The EURUSD has been unfolding every day for the past month exactly as I have been saying every day that it was likely to do. This has given traders many good day trading opportunities. The daily chart had a failed breakout below a small head and shoulders top bear flag (it was a good size top on the 60 and 240 minute charts). As long as the selloff held above the December 3 bull trend reversal, there was a 60% chance of a 2nd leg up. It probably began on Monday.<\/p>\n

The 3 day rally on the 60 minute chart has had several brief buy climaxes followed by pullbacks lasting several bars. This is more common in a trading range than in a bull trend, which means that this 1st attempt up might test back down to around Monday’s low before a leg 1 = leg 2 measured move attempt begins (leg 1 began with the December 3 bull trend reversal).<\/p>\n

The overnight bull breakout on the 60 minute chart was big. Bulls want a measured move up from a bull breakout. The bears want the breakout to be an exhaustion gap and they want a test back down to Monday’s low. While there might be higher prices for a day or so, the rally from Monday’s low looks more like a bull leg in what will become a trading range than a new bull trend. This means that a pullback is likely today or tomorrow. An obvious target is the overnight higher low. The bulls hope that the pullback stays above the 1.0830 lower high and creates a measuring gap for a rally to the January 4 lower high around 1.0950. Because the rally was weak, there is a 50% chance that either target will be reached. Although the 5 and 15 minute charts are Always In Long, the weak rally means that bulls will be quick to take profits on any reversal. The result could be a deep pullback and the creating of a trading range on the 60 minute charts. Bulls will probably begins to switch to scalping today. Because a trading range is likely soon, the bears will be scalping as well.<\/p>\n

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

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

The Emini rallied for a couple of hours after a big gap down. It then sold off to a new low. It closed in the middle third and was a trading range day.<\/p>\n

The Emini closed the October 5 gap on the daily chart and stayed around it for the rest of the day. Although the 60 minute chart is oversold and the 5 minute chart triggered and expanding triangle buy signal at the end of the day, the bears will look to sell the 1st 2 day rally for a test back down. They hope that the breakout below the 3 month trading range will result in a test of the August low. There is a 60% chance that they are right, but because of the sell climax on the daily chart, the Emini might bounce back above the bottom of the 3 month trading range first. <\/p>\n

The bears are in control, but many took profits in the final hour and will wait to sell again higher. This can create a buy vacuum test up over the next few days. Less likely, the selloff will continue straight down to the August low.<\/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>, 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 6:51 a.m. The Emini reversed up strongly on the 2nd bar after testing the October 5 gap. The follow-through has been weak, but when there is an extreme sell climax on the 60 minute chart and a strong reversal up at support on the daily chart, the day is not likely to be a […]<\/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-47146","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\/pt-br\/author\/albrooks\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/47146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/comments?post=47146"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/47146\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media?parent=47146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/categories?post=47146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/tags?post=47146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}