The Emini reversed up strongly from below yesterday’s low in a lower low major trend reversal.
End of day comments about today’s Emini price action and day trading
As expected, the early selloff failed. The rally, however, was unusually strong and the Emini rallied to above yesterday’s high, forming an outside up bull trend day.
S&P500 Emini intraday market update for price action day traders
Time of update 7:17 a.m. PST.
After a 3 day bear trend and then a big sell climax into yesterday’s close, day traders will likely see a lot of trading range price action today, especially since the Emini is testing the bottom of a month long trading range. The initial selloff had many reversal attempts, which is more common in a bear leg in a probable trading range day than in a bear trend. This means that bulls should be watching for a bottom and then a swing up.
Since the selloff into the close was so strong, the Emini could easily continue to trend down with lower highs and lows all day. However, the odds favor a trading range, but to create this, the bulls need to rally above a prior lower high. Without that, the bear trend is intact.
S&P500 Emini 60 minute, daily, weekly, and monthly candle charts
The Emini collapsed into the close yesterday. It might be forming a nested head and shoulders top. This 3 day selloff could lead to a rally that could form the right shoulder. Then, this month-long head and shoulders top could be the head of a larger one that began in June.
See the weekly update for a discussion of the weekly chart.
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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.
It usually does, but since the rally was so climactic, the follow-through might be only for the first hour or two. I suspect it is just another rally in a month long trading range and it will not lead to a new high.
Since the price action became very strong today, does that favor follow thru on Thursday?