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The Emini broke to a new all-time high on the open. At the moment, the Emini is Always In Long and in a trend from the open bull trend. Yet, the bull bars are not especially big. In addition, there are tails, dojis, and a bear bar. Furthermore, most trading range breakouts fail. Hence, this early breakout could still fail and form an early high of the day.
This rally looks more like a bull leg in a trading range than the start of a big bull trend. While the Emini is Always In Long, the odds are that it will probably enter a trading range soon. Less likely, it will be a big bull trend day.
Pre-Open market analysis
The Emini triggered a buy signal yesterday by going above Wednesday’s high. This is because Wednesday was the 3rd day of a pullback in a bull trend. It was therefore a High 1 buy signal bar on the daily chart. Yet, yesterday was a trading range day, like the 3 prior days. That makes today likely to be another trading range day.
The bulls want a new all-time high. However, after 4 doji days and a buy climax, the odds are against a strong bull trend day. The bears want a reversal down from a small double top with last week’s high. Sine the 3 week bull channel is tight, the odds are against a big bear day.
Weekly support and resistance
Because today is Friday, weekly support and resistance are important. This is especially relevant in the final hour. The most important targets are the open of the week and last week’s all-time high. So far, the Emini is near the open. A close around here would create a doji inside bar on the weekly chart. The bulls want a close above last week’s high. The bears would like the week to close at a new low.
Overnight Emini Globex trading
The Emini is up 3 points in the Globex market. Yet, the daily chart has had 4 consecutive doji bars. Therefore the odds favor another trading range day.
Since the bull trend on the daily and weekly charts is strong, the bulls will probably get at least one more small push up soon. Yet, because the weekly chart is so extremely climactic, the odds still favor a 100 point correction before the Emini will rally much further.
EURUSD Forex market trading strategies
The 240 minute EURUSD Forex market has been in a trading range for 3 weeks. There is no sign of a breakout. The bears see a double top and the bulls see a broad bull channel.
The EURUSD Forex market pulled back to the daily moving average overnight (not shown on 240 minute chart above). Several weeks ago, I said that it would enter a trading range that would last at least a couple of weeks. This is because it rallied strongly and began to stall at the resistance of the November 9 lower high. Yet, the momentum up was strong. Furthermore, since it is within a 2 year trading range, the odds are that it will go above resistance before reversing. Consequently, the odds still favor a break above the November 9 major lower high. However, it could test below the bottom of the 3 week trading range before the bulls buy again.
While May appears to have maintained control in Britain, the technical factors are more important. There have been many major news events over the past 2 years that were more important. Yet, none has been important enough to break out of the 2 year range.
Overnight EURUSD Forex trading
The 3 day weak selloff continued overnight. The selling lacks momentum and is therefore more likely simply a leg in the 3 week trading range than a new bear trend. The EURUSD market has been in a 15 pip range for the past 4 hours. Consequently, it is even difficult for day traders to scalp. Since the 60 minute chart has a nested wedge bull flag, the odds are that there will be a 40 pip rally starting today or tomorrow.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
The Emini sold off from a parabolic wedge top, and became a big outside down day. It rallied at the end from a huge sell climax.
The Emini formed a big outside down day today. Yet, it closed back in the 5 day tight trading range. Furthermore, it had a big tail below. Therefore, while bearish, it is fairly neutral. In addition, when there are consecutive sell climaxes like this, there is an increased chance of a strong bull trend day on the next day.
The bears want today to be the start of a reversal down to the weekly moving average. However, they need strong follow-through selling next week. Without that, the odds favor a continued tight trading range next week.
See the weekly update for a discussion of the price action on the weekly candlestick chart and for what to expect going into next week.
Traders can see the end of the day bar-by-bar price action report by signing up 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. We offer a 2 day free trial.
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 page.
