Emini stalling awaiting Congress votes on budget reconciliation and tax cut
Updated 6:43 a.m.
While yesterday was a sell signal bar on the daily chart, it was an extreme sell climax on the 5 minute chart. That means that there is only a 25% chance of a big bear day today. However, if there is a strong selloff, traders will swing trade. Also, those 3 good bull bars around 2647 are magnets. Since there is a 75% chance of at least a couple of hours of sideways to up trading that begins by the end of the 2nd hour. those are magnets above.
The 1st reversal up will be a minor reversal since yesterday’s channel was tight. If the reversal is big, the bulls will then probably get a higher low major trend reversal attempt. They are trying to get a reversal up from above yesterday’s low to prevent the sell signal on the daily chart from triggering. However, even if today trades below yesterday’s low the downside is probably not great since yesterday was climactic.
At the moment, today will probably be mostly a trading range day, even if it trades below yesterday’s low. If it is an inside day, it could get an early low of the day. The target for the bulls is yesterday’s trading range around 2655.
Pre-Open market analysis
Yesterday gapped up to a new all-time high, but sold off in a trend resumption down day. It is a sell signal bar for a micro double top with Thursday’s high. Yet, the Emini will probably go mostly sideways into Friday’s vote on the continuing budget resolution. However, if there is a big bear trend day tomorrow, the odds that a 5% correction has begun would be 40 – 50%.
As strong as last month’s rally was on the daily chart, bear bars and dojis followed big bull bars. This usually results in a trading range, which might now be forming.
Overnight Emini Globex trading
The Emini is up 4 points in the Globex session. That is close enough to yesterday’s low so that the odds favor a test below yesterday’s low. Yesterday is a sell signal bar for a micro double top on the daily chart. Consequently, traders want to know if there are more buyers or sellers below its low.
Since most reversals fail, the odds are against a big bear trend day today. However, with the daily, weekly, and monthly charts all in buy climaxes, the Emini can form a huge bear trend day at any time. More likely, the 3 day tight trading range will continue. This is especially true since Friday’s vote on the continuing budget resolution is a major catalyst. The Emini will probably wait for the vote before having a big move up or down.
Yesterday’s setups
Here are several reasonable stop entry setups from yesterday. I sometimes also show limit order entries and entries on the close of bars.
EURUSD Forex market trading strategies
The EURUSD daily Forex chart is in a 9 day tight trading range. After its parabolic wedge top, the minimum target for the pullback is a test of the 30 day exponential moving average.
The EURUSD daily Forex chart has been in a tight range for 9 days. It is pulling back from a parabolic wedge top. Therefore, it is likely to have at least a 2 legged sideways to down pullback to support. It has met the minimum of 2 legs sideways to down. Yet, the nearest support is last week’s low and the 20 day EMA. Therefore, this pullback is likely to fall more. Furthermore, it could reach the November 21 major higher low.
The bulls want the November rally to resume and to break above the September high. However, that is at major resistance on the monthly chart. Consequently, a rally to the September high will probably stall.
Trading ranges resist breaking out. There is no sign that this 5 month trading range or the bigger 2 year range is about to break into a trend. The odds are that the 5 month range will continue for at least another few weeks.
Overnight EURUSD Forex trading
The 5 minute chart has been in a 35 pip range. Furthermore, it is still withing the 5 day pullback from last week’s parabolic wedge top. While the odds favor more trading range trading, they also favor a test down to at least last week’s low. This is about 30 pips below the over night low. The 5 minute chart has sold off in a tight channel for the past 3 hours.
The bulls will probably need at least a small double bottom before they can regain control. There is no sign of a bottom yet. Therefore, this selloff might continue down to below last week’s low. Once there, traders will try to stop the selling with a double bottom with last week’s low. If they cannot get one, the next support is the November 21 low just above 1.1700.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
The Emini rallied from above yesterday’s low, but then reversed down. When it fell below yesterday’s low, it triggered a sell signal on the daily chart.
Yesterday was a sell signal bar on the daily chart. The Emini opened above yesterday’s low and rallied. The bulls were therefore trying to create an inside day. Yet, the rally failed and the Emini reversed down. The bears got their breakout below yesterday’s low. They therefore triggered the sell signal on the daily chart.
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.
Hi Al,
would you consider the ES to be AIS as of the close, now that we have two big BR bars closing on their lows following a mDT?
Thanks Daniel
Yes, because it never got back to Always In Long after the 11:15 a.m. selloff began. It always has to be one or the other.
Just to clarify, AIS on the daily chart. Thanks for the reply Al.
The Emini usually needs at least 2 consecutive big bear bars or 3 smaller bear bars closing around their lows on the daily chart. In addition, at least one close should be far below the moving average. Since none of this has happened, the odds still slightly favor the bulls. However, this is the best chance that the bears have had in 6 months.
awesome. thanks again