End of day comments about today’s Emini price action and day trading
The S&P500 Emini had a strong reversal up from a bear breakout attempt at 7:35 a.m. and that controlled the market for the rest of the day. Although the day was a small tight trading range, the bears were unable to generate enough strength to overcome that bull reversal. This made it likely that the Emini would rally for some kind of measured move up, based on that 7:35 bull reversal. It rallied for a measured move based on the actual risk of buying 1 tick above the bar. The actual risk was to 1 tick below the 8:55 a.m. pullback, and the target was reached at the end of the day.
S&P500 Emini intraday market update for price action day traders
Time of update 7:28 a.m. PST.
The Emini had a weak rally that tested yesterday’s high, and it is continuing yesterday’s trading range price action. Each bull bar was followed by bear bar. This is two sided trading and it increases the chances that this rally will become part of a trading range. It reduces the chances that this rally will be the start of a bull trend day.
Yesterday had big swings up and down after the FOMC report, creating a big trading range. The stock market is still in that range and it might stay there all day. Less likely, it will breakout strongly up or down and create a trend day. If so, traders will switch to trend trading.
The rally yesterday was strong enough so that the 60 minute chart probably will have one more push up, but it probably has to correct more sideways before that happens. This also increases the chances that the Emini will stay in a range for at least a couple of hours and possibly all day. If so, traders will buy low, sell high and scalp. If the legs up and down are strong, traders will wait for second signals. If it continues to look like a trading range, they will be hesitant to buy strong bull breakouts when they occur as 2nd legs up because they will probably be buy vacuum tests of the top of the range. They trap bulls and then reverse. Similarly, traders will not short strong bear breakouts unless there is follow-through because most breakouts fail on trading range days.
S&P500 Emini 60 minute, daily, weekly, and monthly candle charts
Yesterday pulled back from a 2nd leg up on the 60 minute chart and the first leg up was strong enough to make a third push up likely. This could lead to a 60 minute wedge top at an all-time high.
Yesterday had a strong bull reversal after the FOMC report, but the Emini continues to stall at 2,000. If it does not break far above and have good follow-through, it will run out of buyers at this price level. It will then have to trade lower to find buyers.
Yesterday was a big doji bar on the daily chart, which is a one day trading range, and it formed within a month long trading range. The daily chart is still deciding between trend resumption up and trend reversal down.
See the weekly update for a discussion of the weekly chart.