Emini exhaustive buy climax at 2400 big round number
Updated 6:52 a.m.
Since yesterday had a bull breakout around 9 a.m. and then a bull channel, it formed a spike and channel bull trend. Traders therefore expect that channel to evolve into a trading range. The bulls will try to reverse up from this area.
Yesterday was a big range day in a 3 week trading range. Furthermore, tight trading ranges have an increased number of inside days. In addition, today opened in the middle 3rd of yesterday’s range. Consequently, today has an increased chance of being an inside day. Therefore, there might be sellers just below yesterday’s high and buyers just above its low.
The 1st 2 bars today were bear bars so therefore the day opened as Always In Short. Yet, they were dojis. Hence, the selling was weak. In addition, the Emini is at the bottom of yesterday’s channel. It is therefore at support. Since the Emini is beginning with small bars in the middle of yesterday’s range, with a 3 week trading range, today will probably be a trading range day. Because it is at support, it will probably try to test yesterday’s high.
At the moment, the bulls have a couple of bull bodies and the Emini is now Always In long. Yet, neither bar is big. This is a trading range open and a trading range day is likely. The Emini is still deciding whether to test yesterday’s high or low. In either case, it will then probably reverse and remain a trading range day.
Any day can become a strong trend day. Yet, because of the 3 week trading range and today’s trading range open, today is more likely to be another trading range day. Traders are waiting for a strong breakout up or down before swing trading in the direction of the 1st 2 – 3 hour swing.
Pre-Open market analysis
Yesterday sold off, but reversed up from above the 3 week trading range low. The odds continue to favor at least one more push above 2400. However, since the weekly chart is so overbought, the odds are against the rally lasting more than a few weeks longer.
Today is Friday and therefore weekly support and resistance are important. The week so far is a bear doji. Hence, the open of the week is a magnet. Furthermore, the 2400 all-time high is a Big Round Number and a magnet as well.
Overnight Emini Globex trading
The Emini is down 2 points in the Globex market. Yesterday was a buy signal day that reversed up from the daily moving average. Furthermore, the Emini is in a bull trend on the daily chart. In addition, the 2400 Big Round Number at the all-time high is an important magnet. Consequently, the odds are that the Emini will trade above yesterday’s high today or on Monday. Finally, the Emini will probably breakout to a new all-time high within the next week.
Yet, the weekly buy climax is unusually extreme. There is therefore a 70% chance of a 100 point pullback to the weekly EMA beginning anytime within the next 3 weeks.
EURUSD Forex market trading strategies
After selling off for 4 days, the EURUSD 240 minute Forex chart is bouncing from the bottom of the 3 week trading range. Since the bear channel was tight, the odds are that any rally will be minor and lead to a test back down. Targets are the April 26 top of a 7 day tight trading range, a 50% pullback, and the gap above the May sell climax high and the may 5 low.
The EURUSD Forex market has been going sideways for 3 days after a 4 day selloff in a tight bear channel on the 240 minute chart. Because the channel was tight, the odds are that there will be sellers above. Consequently, traders expect that the first attempt by the bull to resume the 4 week bull trend will probably fail. The bulls will probably need a test back down to the bottom of the 3 week tight trading range before they can get a resumption of the bull trend.
If there is a 100 pip rally over the next few days, and it then begins to stall, the bears will sell, expecting a lower high major trend reversal. Since most trading range breakouts fail, the selloff will likely bounce once it gets back down to the 3 week trading range low. As a result of these multiple reversals, the chart would be in breakout mode. That means that there is a reasonable sell setup and a reasonable buy setup. Furthermore, the odds of a breakout up or down are the same. Finally, the initial target after a breakout is a measured move, based on the 150 pip height of the range.
Overnight EURUSD Forex trading
The EURUSD market has rallied 50 pips up from the bottom of the 3 week range. Since it is now close to the middle of the range, the bulls reached their minimum objective. Yet, there are still resistance targets slightly above. Hence, the rally will probably continue for another day or two and test those targets.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
The Emini formed a small inside day. There were several wedge reversals for scalps.
Today was an inside doji day in a 3 week trading range. Because today was small, there is an increased chance of an outside day on Monday. The odds favor one more new all-time high next week. Because of the weekly buy climax, the bull breakout will probably fail. The 100 – 150 point selloff should fall below the weekly moving average within a month or two.
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.
