Emini awaiting Comey’s testimony on Trump and Russia
The Emini opened in yesterday’s tight trading range, and rallied from an Opening Reversal pullback to the moving average. By trading above yesterday’s high, it triggered a buy signal on the daily chart. Yet, the Emini is in a 3 day tight trading range. Furthermore, there was an early reversal down. Therefore the odds are that the breakout will not lead to a strong bull trend day. However, the Emini might test yesterday’s high again today.
The breakout immediately failed and reversed down from a small expanding triangle top. The bears want a break below yesterday’s low. This would therefore create an outside down day. More likely, if there is a selloff, it will stay above yesterday’s low.
The Emini is Always In Short. Yet, a bear leg in a trading range is more likely than a bear trend. The bears need stronger consecutive bear bars to make traders believe today will be a strong bear trend day.
Pre-Open market analysis
The Emini has been in a trading range for 3 days. This is because traders are waiting for Comey’s testimony today. Since Comey has a history of making surprising comments, there is an increased risk of a trend up or down today.
Because the weekly chart is so overbought, the odds still favor limited upside. Furthermore there will probably be a pullback to the weekly moving average beginning within a few weeks.
Overnight Emini Globex trading
The Emini is down 1 point in the Globex market. While today is rollover day, the June contract will still have much more volume. Therefore most daytraders will continue to trade June today, and switch to September tomorrow.
Because the Emini has been sideways for 3 days after a buy climax, the odds favor more trading range trading today. Since yesterday was a High 1 buy signal bar on the daily chart and the Emini is just below yesterday’s high, today will probably trade above yesterday’s high today. Yet, 3 consecutive dojis mean a weak bull flag. Therefore, the odds are against a strong rally above yesterday’s high.
Today’s Comey testimony has the potential to create a surprise. Hence, there is an increased chance of a trend up or down. Yet, more trading range trading is more likely. The odds are that there will be no surprise and today will be just another day in a developing tight trading range on the daily chart.
EURUSD Forex market trading strategies
The ERUSUD Forex market is forming a double top with the November 9 major lower high. While it is turning down from just below that high, the weekly chart has been in a trading range for 2 years. Since trading ranges disappoint bulls and bears, the odds are that the year long rally will go above the November high within a few weeks. This would disappoint the bears. Because most breakouts in trading ranges fail, the odds are that the breakout would then reverse down. Hence, the price action would then disappoint the bulls.
Overnight EURUSD Forex trading
The EURUSD Forex market has sold off 70 pips in the past 6 hours. It is therefore testing the bottom of a 6 day trading range within a 3 week range. The bears want a measured move down below the 6 day range. This would therefore test the bottom of the 3 week range.
Furthermore, the EURUSD daily chart has not yet tested the May 30 bottom of the range. In addition, it is just above the daily moving average. Since these are important magnets, the odds are that the EURUSD Forex market will go sideways to down to these support levels before breaking above the November 9 high.
The bulls want the bottom of the 6 day range to hold. They see it as a bull flag and they therefore expect a rally from the current level to break above the November 9 major lower high.
Whenever both the bulls and bears have reasonable arguments, the odds favor more trading range trading. This is currently the case. The odds favor a test down first, and then a break above the November 9 high. Yet, that breakout will probably fail. Since this is all within a 3 week trading range, most strong legs up and down on the 5 minute chart will continue to reverse. Hence day traders will mostly scalp.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
The Emini today was the 4th consecutive doji bar on the daily chart. This is therefore an early tight trading range after a buy climax. The bears see today as forming a micro double top with last week’s high. Since the weekly chart is so extremely overbought, a 100 point correction can begin at any time.
Yet, most reversals are minor. Hence, the odds are that there will be buyers below today’s low it the double top sell signal triggers (by tomorrow falling below today’s low). Since the Emini is in an early tight trading range, the odds are that most days will be trading range days.
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.
Hi Al, I went short 1 tick below Bar 8, with my Stop 1 tick above that bar. As it turned out it was an OK trade, but would you have placed a Stop there and alllowed it to be hit ? Thank you.
I bought with a limit order at 2428.00 today around 7:30 PST based on choppy (up and down with lots of tails) price action, assuming the expanding bottom triangle using the previous 2428.75 low would be support. It was also a 2nd leg measured move target with the first down push. This worked out pretty well but I don’t see that area marked as a limit order trade entry. Do you agree with this reasoning? Or do you not mark limit order trades on the chart?
I think that is a smart trade. I don’t mark all trades. Here, I focus on stop orders and Buy or Sell The Close orders, which is what most traders should use most of the time. However, many experienced traders enter with limit orders as well, as you know.