8/5/25 - More Strong FT Selling or Profit Taking Soon? FCPO

1. Wednesday's candlestick (May 7) was a bear bar closing near its low.
   
2. In our previous report, we said traders would see if the bears could create more follow-through selling below the January low, or if the candlestick closes with a long tail below or a bull body instead.
   
3. The bears continue to get follow-through selling below the January low.
   
4. 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.
   
5. In the night market session, the candlestick is currently a small bear bar trading near its low, and near Wednesday's low.
   
6. If the bears can get strong consecutive bear bars, that would increase the odds of a successful breakout.
   
7. The bulls want a reversal from a lower low major trend reversal and a wedge pattern (Apr 9, Apr 22, and May 8).
   
8. They hope to get at least a small two-legged sideways to up pullback lasting a few days soon.
   
9. They must create strong bull bars over the next several days to increase the odds of a failed breakout.
   
10. The market broke out below the January low on Monday with follow-through selling on Tuesday and Wednesday.
    
11. The market could still trade at least a little lower tomorrow.
    
12. 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.
    
13. So far in the night session, the candlestick is a small bear bar trading near its low.
    
14. For tomorrow (Thursday, 8/5/25), traders will see if the bears can create another follow-through bear bar.
    
15. Or will the market trade lower, but the candlestick closes with a long tail below or a bull body?
    
16. The bulls need to do more to show they're back in control. So far, they haven't been able to do so.
    

Andrew