Dow 20,000 double top major trend reversal
The Emini reversed up from a breakout below yesterday; late major low. While the rally failed to break above the late lower high, it was strong enough for traders to see the market as Always In Long. Hence, the odds are greater that there are buyers below than they are that this is a bull leg in a bear channel. However, buy the close bulls need to trade small since their stop is far below. Furthermore, many will look to add on near the low of the day.
Because of rally stalling again at the 60 minute moving average and the month long trading range, this rally will most likely become a bull leg in a trading range. Yet, there is no top yet. The bulls are trying to get above yesterday’s lower high. Hence, that would convert the bear channel into either a trading range or a bull trend.
Pre-Open Market Analysis
I am in Asia and my internet connection is bad. Also, I leave around 9 am today.
The Emini sold off yesterday after a strong early rally. While the rally failed to make a new all-time high, the selloff made a higher low. Therefore, yesterday was more bullish than bearish. The Globex market is unchanged after trading sideways all night.
The bulls keep trying to break above Dow 20,000. At some point, they give up. Furthermore, even if they succeed this week, the odds are that the new high will fail. The Emini never test the gap above the August high. Since the breakout is late in a bull trend, the odds are that the gap will close before the rally goes much higher. The August high is about 100 points down. Therefore the correction in January or February will probably be about 100 points.
EURUSD Forex Market Trading Strategies
I am in Asia and my internet connection is bad. I am not posting the EURUSD chart today because the internet is precarious and I don’t want to add any stress to the connection.
After a strong bull reversal, the follow-through has been bad. Hence, there is disappointment, which is a hallmark of a trading range.
While the EURUSD sold off overnight, the market only fell 60 pips. The bears want the breakout below the neck line of the double top to lead to a measured move down. Because the chart is in a trading range, it is more likely that this bear breakout will fail and the trading range will continue.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Because of my fragile internet connection, I will not post a chart here today. Furthermore, since I left at 9 am, I will wait until before tomorrow’s open to post my thoughts about tomorrow.
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.