Final Emini trading day of March so monthly support and resistance are magnets
Today opened in the middle of yesterday’s trading range. Traders need to see a series of 3 – 5 consecutive strong trend bars up or down before they believe that a trend is underway.
Furthermore, they need a big breakout above or below yesterday’s range because the support and resistance are strong. Yesterday’s high was around the open of the week and at the 60 minute EMA. There is therefore added resistance. Yesterday’s low has the added support of the 2600 Big Round Number, and the big reversals up in February.
The small bars with prominent tails in the middle of yesterday’s range increase the odds that yesterday’s trading range is continuing. Until there is a strong breakout up or down, traders will continue to assume that every move up or down will reverse within a few bars
Pre-Open market analysis
Friday is a trading holiday. Therefore today is the last trading day of the week and of the month. Consequently, weekly and monthly support and resistance are important, especially in the final 2 hours.
The monthly chart currently has a bear inside bar for March. On the monthly chart, the most important prices are the current low of the month, February’s low, and the open of the month. The open of the month is far above and probably irrelevant today. However, the bears want the month to close on its low. In addition, they would like it to close below the February low. Yet, that might be too far below to be reached today.
On the weekly chart, this week is a bear inside bar so far. The bears want it to close on its low and below last week’s low.
The bulls, however, would like the week to close above its open. This would create a bull body. It would therefore be disappointing follow-through selling for the bears after last week’s big selloff. Consequently, this would reduce the chances of a big bear breakout next week.
Because yesterday was a trading range day, there is an increased chance of more trading range trading today. If so, traders need to be ready for a possible late breakout up or down. This is because the Emini will try to reach weekly or monthly targets at the end of the day.
Overnight Emini Globex trading
The Emini is up 8 points in the Globex market. Since tomorrow is a holiday in the U.S. and yesterday was a quiet day, there is an increased chance of a trading range day today. That increases the importance of the open of the week, and the lows of the week and month. They are magnets, especially in the final hour. Therefore, traders should look for a brief trend in the final hour that tests one of the magnets.
The Emini reversed up violently from around 2600 twice in February. It is therefore critical support. If the bulls do not get another reversal up next week, the odds will shift in favor of a break below the February low.
EURUSD has small double bottom in middle of 3 month trading range
The EURUSD daily Forex chart is in the middle of a 3 month trading range. Since the trend before the range was up and there is a monthly bear trend line (not shown) above the range, the odds slightly favor a bull breakout.
The bulls see the 2 big bear days as a pullback in a 3 week rally. They need a reversal up within a few days from this level. That would be from a double bottom with the small bear bar from 5 days ago. Even if the bulls get a reversal up, they need a strong break above the February 16 top of the 3 month range. Without that, traders will assume that the trading range will continue.
The 2 day selloff was strong, but the bears need a strong break below the March 20 major higher low before traders will believe that the 3 week rally was a lower high major trend reversal. If they get a break below the March 1 low, they would then try for a 300 pip measured move down.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has been in a 30 pip range overnight. It is at support at the low from 5 days ago. Since tomorrow is a holiday in the US, there is a reduced chance of a breakout up or down today. Consequently, day traders will look for 10 – 20 pip scalps on minor reversals today as they wait for a breakout.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
The bulls rallied today again up from 2600. By closing above the open of the week, this week’s bar had a bull body, although small. That is weak follow-through after last week’s big bear bar on the weekly chart. Next week will be important because it will give traders a better idea if the 2 month correction is over, or if it will continue far below the February low.
See the weekly update for a discussion of the price action on the weekly candlestick chart and for what to expect going into next week.