Posted 7:54 am PST.
The most important price action in today’s intraday update is the bull trend reversal after the bear breakout below the yesterday’s triangle. Triangles late in trends often become final flags. The market reversed up from just above last week’s low. The bottom was a wedge, but the wedge was tight and therefore will more likely lead to a trading range rather than a bull trend.
Since the Emini will probably be sideways for a few hours, traders will buy low, sell high, and scalp. Bulls want the market to stay above the 7:40 low, which is the start of the bull breakout. Bears want the Emini to stay below the 7:05 high, which is the top of the wedge and the start of the most recent leg down. Trading ranges often break above resistance and below support, and then reverse.
Bears want a double top with the 7:05 high and then a breakout below the low and last week’s low, followed by a measured move down. The bulls want a reversal day and a move back to the high of the day, but they will probably need a major trend reversal to accomplish that. The bears have a better chance than the bulls, but the odds favor a trading range for several hours.
Last week is a signal bar on the weekly chart for a short. Thursday is the last day of the month and the bears might form a bear reversal bar.
See the weekly update for a discussion of the weekly chart.