Emini and Forex Trading Update:Wednesday November 27, 2019
Pre-Open market analysis
Yesterday had a weak rally for the 1st half of the day and then a reversal down. The selloff was a test of the open and the bulls bought it. That trend resumption up increases the chance of higher prices through the end of the month on Friday.
The daily chart is in a Small Pullback Bull Trend and therefore the odds are against a big move down. However, there will probably be a 100 point pullback beginning soon. The bulls might have to test the top of the monthly channel first, which is just below 3170.It is important to consider the possibility that 2019 ends in the opposite way of 2018. Last year finished with a huge sell climax and then a big reversal up. Traders have to consider the possibility of this year ending with a blow-off top and then a surprisingly big reversal down.
Will today be a big bear day? Unlikely. Most days over the past several weeks have had at least one reversal and lots of trading range trading. Until that clearly ends, day traders will continue to take profits after 2 – 4 hours and look for reversals. Because tomorrow is a holiday, today could spend a lot of time in tight trading ranges.
Overnight Emini Globex trading
The Emini is up 4 points in the Globex session. There might, therefore, be a small gap up today. Small gaps typically close in the 1st hour.
Because the 60-minute chart’s rally over the past 3 days is extreme, there is an increased chance of a pause or a reversal down today. However, the bull trend on the daily and weekly charts is strong. Traders have been buying every 1 – 3 day pullback for 2 months. Consequently, there is not much downside risk over the next few days.
While the rally has been strong, most days have had at least one reversal. Day traders will expect that again today. Additionally, since tomorrow is a holiday, there is an increased chance of today spending a lot of time within a tight trading range. Finally, even if there is a tight range, day traders should be ready for a possible strong but brief breakout up or down in the final hour.
