Emini bulls want November buy signal bar on monthly chart
I will update again at the end of the day.
Pre-Open market analysis
The Emini had a strong bull breakout in the middle of the day yesterday. It was big enough to have follow-through buying over the next week. This is true even if there is a deep pullback for a few days. There is only a 30% chance of a bull trap and reversal down when the breakout is this big. The bears typically need at least a micro double top before they can regain control.
The key prices this week are the 2720.25 open of the month, last week’s 2734.75 high, and the November 16 2748.75 lower high. November closes on Friday and the bulls want a bull body on the monthly chart. The bears always want the opposite, but the best they probably can get is a small bear doji.
If the month closes near its high, it will be a decent buy signal bar for December. The monthly chart has a 20 Gap Bar buy setup and November is the buy signal bar. The big bear bar on the monthly chart in October reduces the chances of a big rally from here without more sideways months.
Overnight Emini Globex trading
The Emini is down 6 points in the Globex session. Since yesterday’s buying was climactic, there is a 75% chance of at least a couple hours of sideways to down trading today that starts by the end of the 2nd hour.
For the past week, I have said that the November 16 minor lower high was a magnet. Yesterday reached that target and therefore some bulls will take profits.
The open and high of the month and last week’s high are all nearby. All are important when the month and week close on Friday. That makes it likely that the Emini will probably be mostly sideways today and tomorrow, and decide in the final hour where the week and month will close.
Yesterday’s setups
Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. I rarely also show limit order entries and entries on the close of bars. My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter.
EURUSD Forex head and shoulders bottom trend reversal attempt
Yesterday reversed up in a big outside up bar. But it had a prominent tail, which represents hesitation. The bulls want the head and shoulders bottom to break strongly above the November 20 high.
The EURUSD daily Forex chart reversed up from a head and shoulders bottom yesterday. Yesterday was a big outside up day and it closed above Tuesday’s high. Yet, it had a prominent tail and closed back below the 20 day EMA. Therefore, there is some hesitation and confusion. Since a head and shoulders bottom is a trading range, there is typically confusion and disappointment until there is either a strong rally or a strong resumption of the bear trend.
If the bulls can get a close above the November 20 lower high, they will probably continue the rally to at least the October 16 start of the bear channel.
Wednesday’s low is the bottom of the right shoulder of the head and shoulders bottom. A close below means that the bull trend reversal has failed. That would increase the chance of a break below the November 12 low.
It is important to remember that a major trend reversal pattern like this only has a 40% chance of actually leading to a major trend reversal. There is a 60% chance that the month-long trading range continues or the bear trend resumes. Traders will find out over the next 2 weeks.
Weekly buy signal bar
Last week was a sell signal bar on the weekly chart. The prior week was a buy signal bar. The bulls are hoping for a 2nd buy signal bar this week. They therefore will try to get the week to close on its high.
If they are successful, they will have consecutive strong buy signal bars and a micro double bottom on the weekly chart. Since the weekly chart has a yearlong wedge bull flag and is at support, that would create a good buy setup for next week.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart sold off and reversed back up overnight. The obvious 1st target for the bulls is the November 20 1.1474 lower high. Furthermore, the bulls want the week to close near its high. They therefore will continue to buy pullbacks today and tomorrow.
Since the bears always want the opposite and the chart has been sideways overnight, they will sell rallies. The would like the week to close below its 1.1347 open. The weekly candlestick would then have a bear body and be a weaker buy signal bar for next week.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Here are several reasonable stop entry setups for today. I show each buy entry with a green rectangle and each sell entry with a red rectangle. I rarely also show limit order entries and entries on the close of bars. My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter.
I will be away tomorrow.
Today sold off on the open, but reversed up to above yesterday’s high and the November 16 high. The bulls took profits at the end of the day. The big, late selloff turned the day into a doji bar on the daily chart. That is common after a big bull day like yesterday.
The bulls want the month to close on its high tomorrow. However, the November high is probably too far up for the bulls to reach it tomorrow. Consequently, the bulls will try for a lesser goal. At a minimum, they want the month to have a bull body. Therefore, they want the month to close above its 2720.25 open. In addition, they want the week to close above last week’s 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.
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Charts use Pacific Standard Time
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.
