Emini Low 1 bear flag sell signal triggered on Thursday
I will update again at the end of the day.
Pre-Open market analysis
By going below Wednesday’s low yesterday, the Emini triggered a sell signal on the daily chart. However, the day then went sideways around Wednesday’s low for several hours. Because the day closed slightly below Wednesday’s low, there is an increased chance of lower prices today.
The bulls are hoping that the past 3 days are a pullback from Monday’s strong reversal up. However, the bears want this week’s rally to be a pullback in their bear trend.
Both have equally good arguments. That usually results in a trading range. The Emini has been sideways for 2 months and it will probably stay around last year’s close for the rest of the year.
Overnight Emini Globex trading
The Emini is down 22 points in the Globex market. It will probably gap below yesterday’s low. If the gap is small, it will probably close in the 1st hour. If it is big, the Emini will probably have at least one reversal in the 1st hour. The bulls will try for a double bottom or wedge bottom, looking for an early low. The bears want a double top or wedge top near the moving average, hoping for a bear trend day.
Today is Friday and therefore the weekly support and resistance are important. Since this week triggered a sell signal on the weekly chart, the minimum goal for the bears is a close below the 2635.25 open of the week. Their next goal is a close below last week’s 2625.25 low. A sell signal is stronger if the entry bar closes below the sell signal bar. Finally, they would like the week to close on its low and below the October 2607.00 low.
The bulls always want the opposite. They will try to create a reversal up today. A rally today would create a micro double bottom with Tuesday’s low. Today would then be a buy signal bar for Monday.
Trading range trading increases the chances of more trading range price action
The Emini had a lot of trading range trading yesterday. Also, it has been in a tight trading range for 6 days. Moreover, it is at the bottom of a yearlong trading range. Finally, last year’s 2693.25 close has been a strong magnet all year.
These factors reduce the chance of a big selloff from here. They increase the chances of more trading range trading today. Today will probably stay near the open of the week until the final hour, and then decide whether to close a little above or below it. This would create a doji bar on the weekly chart, which represents a neutral market.
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 bear breakout below triangle after failed bull breakout
The EURUSD daily Forex chart today is breaking below the triangle after a failed breakout above.
The EURUSD daily Forex chart had been in a triangle for a month. Last week’s bull breakout failed. Today so far is a big bear bar breaking below the triangle. When a breakout fails and there is then an opposite strong breakout, that 2nd breakout is more likely to be successful.
If the bears can close today near its low, the odds will favor lower prices. If tomorrow also is a big bear day, the selloff will probably continue down to the November low. Two strong closes below that low will make traders look for a 300 pip measured move down to 1.09.
The daily chart is still in a trading range. But the bear breakout after a bull breakout increases the odds of at least 2 small legs down over the next several days. The bulls will try for a double bottom with either the November 28 or November 12 lows.
However, if today remains a big bear day, the bulls will probably need a micro double bottom as well. Therefore, the odds favor at least a couple small legs down before the bulls have a reasonable chance of a reversal.
Overnight EURUSD Forex trading
The EURUSD 5 minute chart had a strong bear breakout overnight. After a 5 hour trading range, the bears are now getting another leg down.
However, the 5 hour trading range means that traders feel that the price is just about right. Therefore, the odds are against much lower prices today.
The fight will be over the appearance of the bar on the daily chart. The bears will sell rallies and try to get today to close near its low.
If there is a credible bottom on the 5 minute chart, the bulls will buy it. They would like a 30 pip rally before the end of the day. That would create a tail on the bottom of today’s candlestick on the daily chart. Traders would then see the daily chart as less bearish. The bulls will then hope for a reversal up tomorrow. That would be a double bottom with the November 28 low of 1.1265.
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.
The Emini sold off in a bear channel today. It reversed down repeatedly from the EMA. The week was a decent entry bar for the bears after last week’s sell signal bar.
Traders are paying attention to the end of the year. The bulls want a reversal back above last year’s close. However, the momentum down is good for the bears. They will try to continue the selling and close the year at its low, below the February low. Most likely, the year will end above the February low and below last year’s close.
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.
