Pre-Open market analysis
The Emini was mostly in a tight trading range again yesterday. Traders are deciding whether there will be one more new high. That would create a wedge with the March 1 and June 19 highs. Furthermore, the rally would likely test 2,500. Yet, because the monthly chart is so extremely climactic, the bulls will have a very difficult time pushing the market higher.
The Emini needs to test the weekly moving average and then reverse up before bulls will be willing to buy aggressively again. Therefore, traders will sell rallies, betting against a big move up. In addition, bears will sell rallies until after a test of the weekly moving average.
The most important resistance is the July 3 lower high. This is because it is the neck line of the June 28 and July 6 double bottom. If the bulls can break above that high, they will then have an increased chance of a new all-time high. Furthermore, they would then probably test the 2500 Big Round Number. On the other hand, if the bears can reverse the 2 day rally to below the double bottom, the Emini will probably fall to below the May 18 major higher low. Consequently, that would be a break below the weekly moving average.
Overnight Emini Globex trading
The Emini is down 2 points in the Globex market. It has been mostly in tight trading ranges for 2 days. In addition, most days over the past month have been trading range days. The odds are that today will have at least one swing up and one swing down as well. However, since it is in a 2 month trading range, it is in breakout mode.
Because the weekly chart is so overbought, there is an increased risk of a big move up or down over the next few weeks. The bears see the chart as being is a sell climax. Yet, if they are extremely confident, they might be too short. Consequently, a bull breakout could be bigger and faster than what seems likely.
Yesterday’s setups
