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Emini S&P 500: Waiting On Government-Shutdown Vote
www.investing.com/analysis/emini-sp-500-waiting-on-vote-on-governmentshutdown-vote-200274805
Emini S&P 500: Waiting On Government-Shutdown Vote
By Al Brooks | Dec 20, 2017 11:52AM ET Emini: Buy The Rumor, Sell The Fact After Tax-Cut Vote?
I will update around 6:55 a.m.
Pre-Open Market Analysis
Yesterday sold off in a spike and channel bear trend. While it got close to Friday’s high, it did not close the gap. The bears hope that the reversal down on the daily chart is a wedge top reversal with the December 4 and 17 highs. If they get a gap down on any day in the next couple of weeks, they would have an island top. If the Emini sells off below Friday’s high, Monday’s gap up would be an exhaustion gap. Either event would slightly increase the chance for a 2-legged or bigger correction.
Because the tax cut vote is important, it increases the chance of a big move up or down. Furthermore, if Congress allows the government to shut down this month, the Emini will sell off. Finally, there is still a chance for profit taking going into the end of the year. The bears need consecutive very big bear bars to convince traders that any selloff is more than a pullback. Without that, the odds still favor higher prices.
Overnight Emini Globex
The Emini is up 8 points in the Globex market. The 2 day selloff was a wedge bull flag after Monday’s gap up. Today will probably gap above the 2-day bear channel, and the bulls will then try to break to a new all-time high.
Because the congressional vote to keep the government open is very important and it is coming up within a week, the Emini might become neutral before the vote. In addition, traders, institutions, and governments are distracted by the holidays. This tends to create smaller ranges and fewer breakouts. Consequently, most of the trading until January will probably be sideways with occasional brief breakouts. If the government shuts down, there will be at least a couple of weeks of selling.
Yesterday’s Setups
Here are several reasonable stop entry setups from yesterday. I sometimes also show limit order entries and entries on the close of bars.
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Emini S&P 500: Waiting On Government-Shutdown Vote
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