- Tuesday's candlestick (May 6) was a bear bar closing in its lower half with small tails.
- In our previous report, we said traders would see if the bears can create more follow-through selling below the January low, or if the market would form a small retest of yesterday's low (but possibly a higher low), but stall and trade higher instead.
- Bulls attempted to create intraday reversals but the follow-through buying was limited. The market closed as a bear bar for the day.
- The bears want a strong breakout below the January low followed by a measured move based on the height of the 5-month trading range which would take the market to the 3200 area.
- In the night market session, the candlestick is currently a bear bar trading near its low, and below Monday's low.
- If the bears can get strong consecutive bear bars, that would increase the odds of a successful breakout.
- The bulls want a reversal from a double bottom (with the January low). They want a failed breakout and a reversal from a lower low major trend reversal.
- They hope the bottom of the trading range will act as support.
- They must create strong bull bars over the next several days to increase the odd of a failed breakout.
- The market broke out below the January low on Monday. The bulls attempted to create a failed breakout on Tuesday but the follow-through buying is still limited.
- Traders want to see if the bears can create sustained follow-through selling over the next several days. If they can do that, the odds of a successful breakout and a measured move will increase.
- So far in the night session, the candlestick is a follow-through bear bar trading below Monday's low.
- For tomorrow (Wednesday, 7/5/25), traders will see if the bears can create more follow-through selling below the January low.
- Or will the candlestick close with a long tail below or a bull body? If this is the case, especially if the bulls can create follow-through buying over the next several days, they could swing the odds to a failed breakout.
Andrew
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.