Dow 20,000 buy climax at resistance
Updated 6:54 a.m.
The Emini reversed down from above yesterday’s high. Yet, both yesterday’s rally and today’s reversal were weak. This is still trading range price action, and it increases the odds of more throughout the day.
Because yesterday was a small day, the 5 minute Emini chart is in breakout mode. Despite this quiet open, there is an increased chance of a breakout up or down today. Yet, this quiet open increases the chances of a trading range for the 1st hour or two.
Pre-Open Market Analysis
The Emini was in a small trading range yesterday. Because it was also in the middle of a month-long trading range, it failed to give new information. As a result, the Emini remains in breakout mode.
Since the daily chart closed below the moving average only once in the past 2 months, the odds still favor a bull breakout. Yet, there is month long trading range late in a bull trend. Therefore traders expect it to become the Final Bull Flag. Hence, a break above Dow 20,000 will probably not get far before there is a pullback.
Overnight Emini Globex Trading
The Emini is unchanged in the Globex market. The odds still favor a breakout above the 2 week bull flag and 4 week trading range. Hence, the Dow will probably break above 20,000 within the next week or so.
EURUSD Forex Market Trading Strategies
The 240 minute EURUSD Forex chart has had 2 big legs up after a wedge bottom. The 2nd leg has two parts, and therefore there are 3 legs up. This is a wedge top. The odds favor a test down to test higher lows, but there might be one more new high 1st. Spike and Channel rallies like this usually evolve into trading ranges. That is therefore likely here. Less likely, there will be a strong breakout above the top and then a measured move up.
The 3 week rally on the daily chart is weak. Hence, it is more likely a bear flag than the start of a bull trend. Therefore the odds favor a test down soon, and then an evolution into a trading range.
Overnight EURUSD Forex trading
The EURUSD sold off in the past 10 minutes. This could be the start of the test down to prior higher lows after the wedge top on the 240 minute chart. The 3 legs up were strong enough so that there might be one more new high 1st, but the odds favor a swing down starting today or soon.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
The Emini formed an outside down day by trading above yesterday’s high and then below yesterday’s low.
The Emini traded above yesterday’s high and then below its low. Today was therefore an outside down day. Furthermore, it was another failed attempt to break to a new high. While the odds still favor one more push up to above Dow 20,000, they also favor closing the gap above the August high. In addition, this is true whether or not Dow hits 20,000 first. The bears need a strong break below the month long trading range before traders will conclude that they have taken control.
The reversal up from the daily moving average today was strong. The odds therefore still favor a new high. If President Trump behaves well next week, the Emini will probably rally to a new high.
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.
