Emini all time high breakout is testing 2375 measured move target
Intraday market update: February 15, 2017

Emini all time high breakout is testing 2375 measured move target

Updated 6:53 a.m.

The gap down on the open created a Big Up, Big Down pattern with yesterday’s close. It therefore created confusion and it increased the odds of a trading range for the 1st hour or two. The bulls want to test yesterday’s close and high. Yet, because a trading range is likely, the bulls will probably take profits around yesterday’s high. This would therefore increase the chances of a trading range.

While a big bull trend day is possible, it is unlikely after 5 consecutive bull days and today’s trading range open. Furthermore, because bulls have been buying small pullbacks for 5 days, they will probably buy before today could become a big bear day. Therefore a trading range is likely. The current top is around yesterday’s high, and the current bottom is around yesterday’s pullbacks to 2331. The range will probably extend beyond at least one of these levels. If there is an early swing up or down, it will probably lead to an opposite swing or a trading range after a few hours.

Pre-Open Market Analysis

The Emini has rallied strongly for 5 days. Furthermore, it is almost to the 2340 measured move target. Because the momentum up is strong, bulls will buy the 1st pullback. Therefore the bears will probably need at least a micro double top before they can begin a pullback that might last more than a few days.

Since this breakout has been so strong, the odds of a pullback to the August high before hitting the 2340 and 2375 targets is now less. Because the Emini is only 5 points below the lower target, it will probably get there this week. But, the momentum might not be enough to reach the 2375 target without a pullback first.

Overnight Emini Globex trading

The Emini is down 5 points in the Globex session. After yesterday’s buy climax and 5 day rally, the odds are that today will not be a strong bull trend day. Yet, there is usually some follow-through buying in the 1st 2 hours after a strong bull day. But, the odds also favor at least 2 hours of sideways to down trading that begins by the end of the 2nd hour.

While it is possible for today to be a strong bear trend day, that would be unlikely. When bulls are so eager that they buy every small pullback for 5 days, they will probably buy any selloff before it falls too far. Hence, the best the bear can probably get is about 10 bars down on the 60 minute chart before the bulls come back. Therefore, the 1st big pullback will probably only last a day and a half or so.

Since the Emini is near the 2340 and 2375 measured move targets, it will probably pull back from this area. Because the rally has been so strong, any pullback will probably need many sideways days first. This is because traders will continue to buy until the bears begin to create selling pressure. They will therefore need many days to neutralize this strong rally.

EURUSD Forex Market Trading Strategies

The selloff on the 240 minute EURUSD chart fell below the major higher low at the bottom of the bull channel. The bears want a breakout to the January 11 higher low of 1.0453. The bulls want a reversal up from the Spike and Channel bear trend. There is no bottom yet.

The 3 week selloff in the EURUSD Forex market has been strong. Since there is not sign of a bottom yet, it might continue down to the January 11 low. Yet, the 6 week 2017 rally was strong enough so that this selloff will probably reverse up before breaking below the January low.

A selloff that comes in a series of consecutive sell climaxes usually reverse up for at least a couple of legs. Therefore, the odds are that this bear trend will rally more than 100 pips within a couple of weeks.

Since there is no bottom yet, it is still too early to buy. Yet, if there is a reversal up, it will probably come after a sell climax. The rally will therefore probably come after just a few days of going sideways. Hence, rather than a rounded base, the bottom will likely be a small major trend reversal or wedge bottom.

Overnight EURUSD Forex trading

The series of consecutive sell climaxes on the 240 minute chart continued overnight. Hence, there is no bottom yet. Yet, consecutive sell climaxes usually lead to a strong bounce. Therefore, despite the strong bear trend, the odds still favor a rally that will test some of the major lower highs of the past 2 weeks.

Since the EURUSD has been in a trading range since November, it might have to test the bottom of the range before bounce. Yet, it will probably find support around the January 11 bottom of the strong rally. Hence if it will fall to a new 15 year low, it will probably bounce at least 100 pips first.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

The Emini rallied all day in 3 trending trading ranges.

The Emini has rallied strongly for 6 days. Since that is unusual, it is unsustainable. It is therefore a type of buy climax. Yet, there is no top yet. Furthermore, most buy climaxes are followed by trading ranges and not bear trend. Hence, the downside risk over the next few days is small.

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.

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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.

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