Trump rally stalling at Dow 20000 big round number
Updated 6:52a.m.
The Emini sold off on the open and is Always In Short. The bears want a break below last week’s low. This is because last week was a sell signal bar after the prior week’s buy climax. Since the weekly trend is strong, the odds are the 1st reversal down will be a bull flag and not a reversal. Hence, there will probably be buyers below last week’s low. Furthermore, the Emini is in a trading range on the daily chart, and last week’s low is about 9 points lower. Unless the bears get continued strong selling, the odds are they will not reach the target today.
Since the opening selloff continued yesterday’s sell climax, the odds are that bears will soon take profits and wait for a rally to sell again. This open is then a parabolic wedge bottom in consecutive sell climaxes. In addition, the Emini is still in its 8 day trading range. Therefore traders expect strong legs up and down to reverse instead of lead to trends.
Hence, unless there is strong follow-through selling, the odds are that this sell climax will soon convert into a trading range. While it is possible to convert into a bull trend, most climaxes have to evolve into trading ranges for 10 or more bars. Then, bears try for a resumption down and bulls try for a reversal up. While the Emini is Always In Short, the sell climaxes make a trading range likely for the next hour or two.
Pre-Open Market Analysis
The Emini spent most of yesterday in a 2 point trading range. While it will probably have a bigger range today, the odds are again against a big trend day. Most traders therefore will expect a lot of trading in tight trading ranges. Since most days have at least one 4 point swing, today will also probably have one. Yet, a big trend is unlikely.
Overnight Emini Globex trading
While yesterday had a bear breakout into the close, it was small. The Emini stayed within a 4 point range overnight. The odds are that the 7 day trading range will continue and that today will again have mostly trading range price action.
Yesterday’s Emini price action
The Emini had a weak bear swing for the first few hours. It then rallied from a parabolic wedge bottom, which was a lower low major trend reversal. The rally became a 2nd leg trap and a double top. The bears sold to below the buy climax, but not below the bottom of the bull trend. The bulls bought this as a head and shoulders bottom. Today was another trading range day.
EURUSD Forex Market Trading Strategies
The EURUSD 240 minute Forex chart had a weak rally to last week’s lower high. This is a double top (DT) bear flag and the bears expect a measured move (MM) down. The bulls expect a higher low (HL) after the wedge bottom, and then a measured move up.
While the EURUSD rallied 100 pips over the past 2 days, it is still in a bear trend on the daily chart. The bulls want the wedge bottom on the 240 minute chart to lead to a 2nd leg up after the 1st pullback. Yet, they need a strong breakout above major lower highs before traders will believe that the bear trend has successfully converted into a trading range. Until then, it is easier to make money selling rallies, or scalping for 10 pips on the 5 minute chart.
Overnight EURUSD Forex trading
The EURUSD had a weak rally last night. Yet, it turned down from last week’s high. As a result, there is a double top bears flag on the 240 minute chart. Since there was a wedge bottom 2 days ago, the odds are that the bulls will buy the selloff. Therefore, they will probably get a higher low. However, they then need a breakout above the double top. Without it, the trading range will evolve into a triangle. Since the trend is strongly down on the daily chart, that would still be a bear flag.
Because the legs up and down have lacked consecutive big trend bars up or down, the odds are that the trading range price action will continue today. Day traders will therefore look for 10 pip scalps while waiting for a strong breakout.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
The Emini had a weak bear swing for the first few hours and then a rally to test the lower high. This was a 2nd leg trap and a double top. The bears sold to below the buy climax, but not below the bottom of the bull trend. The bulls bought this as a head and shoulders bottom. Today was another trading range day.
The Emini sold off, but formed a trading range day. The magnet tomorrow for the bears is last week’s low because last week was a sell signal bar on the weekly chart. The bulls want to get back above the 60 minute moving average. Tomorrow will probably be another trading range day.
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.
