Emini testing 2800 and top of 60 minute wedge
I will update again at the end of the day.
Pre-Open market analysis
The Emini spent most of yesterday in a trading range. It tested the March 5 top of the wedge bear channel on the 60 minute chart. The bulls want a strong breakout above that high and then above the October-November-December triple top.
However, there is a buy climax on the daily and weekly charts. Buy climaxes typically get a 2nd leg sideways to down. Consequently, the bulls will have a difficult time breaking above that resistance without more of a pullback.
If today gaps down, yesterday will be a one day island top. However, an island top is a minor reversal pattern. More likely, there was enough momentum up for a test of the December high today or this week.
So far, this week is a bull inside bar. If the week closes near its high, it will be a buy signal bar for next week on the weekly chart.
Overnight Emini Globex trading
The Emini is up 7 points in the Globex session. It is testing 2800 and the March 5 top of the wedge bear channel on the 60 minute chart. The rally is strong enough to continue up to the March high.
However, when there is a wedge reversal that reaches the top of the wedge, the rally typically pauses. Therefore, the odds are against a big bull day. In addition, when a rally is extremely strong, it usually does not reverse into a bear trend without first transitioning into a trading range. Consequently, today will probably be mostly sideways.
Less likely, the bulls will get a surprise day up to the March high or a sharp reversal down for a day or two. Traders will assume that the day will have trading range price action. They will take quick profits and bet on reversals until there is a strong breakout up or down.
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 market trading strategies
The EURUSD daily Forex chart has rallied for 4 days after breaking below the 4 month trading range. The rally is testing the top of the March 7 sell climax, the 20 day EMA, and a 50% retracement. After 4 bull days, traders will buy the 1st pullback.
The chart has been in a bear channel since January 10. The bears hope that this rally is just another bull leg in the bear channel. They want a lower high and then more new lows.
But, until they get consecutive bear closes below the prior low, the odds are that the bear channel will have a swing up. A bear channel is a bull flag. There is a 75% chance of an eventual bull breakout and a conversion into a trading range.
Because the bear channel has had 3 legs down, it is also a wedge bottom. The bulls are trying to get a trend reversal up to the top of the trading range. While they might achieve that goal, the odds are still slightly better for the bears getting a new low. However, most likely, the trading range will continue. Traders will continue to bet on reversals. Everyone is waiting on Brexit.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has been in a 25 pip range overnight. The rally did not quite reach the 1.1320 top of the March 7 sell climax. Since that is a strong magnet, the bulls will probably get there today or tomorrow. Because it is resistance, the 4 day rally will probably stall here for at least a day or two. Then, the odds favor a test down.
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.
End of day summary
The Emini today rallied in a Small Pullback Bull Trend from the open to above last week’s high. It got to within a couple points of the October high. The momentum up is strong enough to break above the daily triple top this week.
However, that is a resistance zone. Also, the daily chart has been in a trading range for 15 months. Therefore, there is an increased chance of a reversal down. Furthermore, after 4 strong bull days, the chart is in a buy climax. Finally, the bulls achieved their goal of reversing last week’s selloff.
Consequently, the Emini will probably trade sideways to down tomorrow and wait for the final hour of the week. It will then decide whether to close above last week’s high and the October high. That would be a sign of strength and increase the chance that the rally will continue up to the all-time high.
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 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.
