Today was the first pullback in a fourteen day bull microchannel so the odds are, there will soon be buyers. The Emini traded below yesterday’s low, as expected, but yesterday’s trading range price action continued in the open.
Until there is a strong breakout up or down, with follow-through, traders will take quick profits (scalp) and look to buy low and sell high. Because of the uncertainty of the election, today might be mostly a trading range day, like yesterday. However, traders will be ready to swing if there is a strong breakout in either direction.
Day trading outlook for tomorrow’s Emini price action
The Emini finally traded below the low of the prior day and it found buyers, as expected. The bears tried to close last week’s gap on the daily chart but failed, and then the Emini rallied for the rest of the day.
Because of today’s election, tomorrow might gap up or down. If there is a strong rally, I think it will be limited because the daily and monthly charts are so overbought and are testing the September high. Although it could retrace 50% of the rally of the past 3 weeks, it is more likely to enter a tight trading range for a week or two and then try to breakout again. If it fails, it will then probably have to go lower to find more buyers.
The Emini has had 3 trading range days and tomorrow is a news day. This combination increases the chances of a trend up or down tomorrow.
Premarket price action analysis
See yesterday’s intraday market update report for today’s premarket analysis. Once there, scroll down to the heading, Day trading outlook for tomorrow’s Emini price action.
See the weekly update for a discussion of the weekly chart and for what to expect going into next week.