Pre-Open market analysis
The Emini sold off strongly yesterday, but reversed up. It is now in a 2 week triangle. Because the daily chart is in a trading range in a bull trend, the odds are slightly better for the bulls. Yet, since the weekly chart is so extremely climactic, the upside is probably small. The odds are that the Emini will have to fall below the weekly moving average before it can go much higher.
Since most days over the past month have had a lot of trading range price action, the same is likely today. Yet, yesterday’s reversal up was strong enough so that the Emini today will probably trade at least a little higher. If the bulls can break above the July 3 major lower high, the rally will probably test the all-time high.
Overnight Emini Globex trading
The Emini is up 11 points in the Globex session. Furthermore, it has rallied 8 points in the past 30 minutes. It therefore will test the July 3 neck line of the June 29 and July 6 double bottom when the day session opens. If the bulls can break strongly above that high, they then will have at least a 50% chance of continuing up to a new all-time high and then the 2,500 Big Round Number.
The bears needed a breakout below the double bottom. They will be disappointed by this rally. The odds are that they will exit their shorts on any early pullback. Consequently, there is an increased chance of a bull trend day today. However, since most days over the past month have had reversals, the bears will short if there is a reasonable top today.
While it is possible that the Emini sells off from its gap up, the break, this gap up will also be a break above a 3 week bear channel. Since it will probably be far above the channel, the odds are that traders will buy the 1st reversal down. Consequently, the best the bears can probably get is a trading range today.
Yesterday’s setups
