Trading Update: Monday November 8, 2021
Emini pre-open market analysis
Emini daily chart
- Parabolic wedge and bull channel rally (October 7, October 26, November 5) at top of bull channel (May 7, September 2, November 5). Probably 1 to 3 days of profit taking this week, possibly started on Friday.
- Friday was a bear bar at the resistance of the top of the 2 bull channels and the 4700 Big Round Number and in an extreme buy climax.
- It is a sell signal bar for today in a very overbought market so the profit taking could be extreme in terms of points.
- Friday had a prominent tail below so it is a weak sell signal bar.
- Bulls will buy the 1st 1- to 3-day selloff, even if it is strong.
- Bears typically will need at least a micro double top before getting more than a 3-day pullback.
Emini 5-minute chart and what to expect today
- Emini is up 10+ points in the overnight Globex session.
- Everyone sees the buy climax and the top of the channel on the daily chart, and Friday’s bear body.
- However, the bulls have been extremely strong. They will try to overpower the bears again today and create another new high. So far, there has been a new high every day in November, and the bulls want the streak to continue.
- However, the bear bar and the buy climax at resistance should attract some profit taking early this week. That reduces the chance of a big bull day today.
- Furthermore, it increases the chance of sideways to down trading early this week.
- Because the Emini is so overbought, the profit taking could be big and fast. That increases the chance of a strong bear day this week.
- If there are early consecutive big bear bars closing near their lows, that would increase the chance of a bear trend day.
- What about a strong bull trend day? That is less likely, given that Friday stopped at the resistance of both channels on the daily chart.
- The gap on Friday was huge, and the selloff was strong. Big Up, Big Down creates Big Confusion. That increases the chance of trading range trading for a day or two.
Friday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Failed break below month-long trading range.
- Lower low double bottom with October 12 low.
- High 2 buy signal with October 29.
- Small bull body so buy signal bar could be stronger.
- If bulls fail to get strong reversal up in next few days, selloff should resume down to below March 9, 2020 high. That was the breakout point of last year’s rally.
- Should rally for a month or two soon since at bottom of 15-month trading range and in middle of 7 year trading range.
- Still more likely will dip down to 1.15 or 1.14 before turning up, but a couple big bull bars this week would make traders conclude that the reversal has begun.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Daily chart has parabolic wedge and a double top. Friday was a bear bar, but it had a prominent tail below. That made it a weak sell signal bar.
- Today was an inside day and another bear bar. It closed near its low and it is a better sell signal bar for tomorrow
- There is now a micro double top. Also, there is a 9-bar bull micro channel, which is an extreme streak and therefore a buy climax. These factors increase the chance of a 1- to 3-day pullback this week.
- However, any reversal down will probably be minor since the bull trend is so strong.
- Since today’s high was below Friday’s high, it is a High 1 buy signal bar. But consecutive bear bars in a buy climax is a low probability buy setup. There will probably be more sellers than buyers above today’s high.
- On the 5-minute chart, today was Bear Trend From The Open, but quickly converted into trading range.
- While trading range for 1st 2 hours, there were also lower highs. Therefore, there was also a bear channel.
- There was a midday reversal up, but it formed a lower high.
- Today remained a trading range day.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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Charts use Pacific Time
When I mention time, it is USA Pacific Time. The Emini day session charts begin at 6:30 am PT and end at 1:15 pm PT which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.