The Emini buy climax on the daily chart is continuing. Friday was another buy climax day, and it was the 2nd leg up after the March 1 breakout above the expanding triangle top. If there is a reversal in the next few days, it would be the entry for a Low 5 sell setup at a resistance area (the bottom of a 3-month trading range).
A buy climax at resistance is usually followed by a trading range. There is a 60% chance that the Emini will find an initial top to the trading range this week. The FOMC meeting on Wednesday might either lead to one more sharp up and then a reversal down, or simply a reversal down. There have been many trading ranges within the larger 2-year trading range. They have lasted about 1-3 months. This one will probably be average.
While it is possible that the bulls will win, as long as the Emini is in a trading range, it remains more likely that the bulls will be disappointed, just as they have been after many other strong rallies within the 2-year range, and as have the bears after many strong selloffs.
Please look at the chart my weekend post. You will see that the daily chart has 2 upper trading ranges and 2 lower trading ranges, and there was relatively little trading in between. This is a thin area, and thin areas usually get filled it with another trading range.
Since a trading range is likely over the next month, the approximate borders of the range would be just below the tops of the lower ranges, maybe around 1900, and just below the bottom of the upper ranges, where the Emini currently is trading.
With Friday being a buy climax in an overbought market, the odds are that today will be a small day. Also, with the FOMC meeting on Wednesday, the next couple of days will probably be small, even though the Low 5 sell signal could trigger within the next 3 days.
As always, if there is a big breakout up or down, traders will swing trade. However, because the Emini is overbought and at resistance, bulls will be quicker to take profits.