S&P 500 E-Mini Likely to Find Profit Taking Soon

S&P Emini Market Analysis

Emini daily chart 

• The S&P 500 Futures Emini formed a bull bar closing above the November 11^th prior swing high. While this is good for the bulls, the daily chart is likely to find profit-taking soon.

• The bulls are hopeful that the Emini is going to get a successful breakout above the November 11^th high and a measured move up. However, the bulls will likely be disappointed, and the market will get a reversal below the November 11^th breakout point high.

• The bears have made money selling above new highs for the past 2 months. The bears were also able to make money selling below bars. This means that the odds favor the current bull channel evolving into a trading range and the market testing down to the November 15^th low sometime over the next few weeks.

• The bears need to create more selling pressure to convince more traders to begin to sell.

• There are momentum bulls who will continue to buy all the way up and exit below a bear bar closing on or near its low. Bears will sell above the November 11th high and look to scale in higher. If the bulls are able to create a strong upside breakout, that would trap the bears into a losing trade and the bulls out of a winning trade.

• Without a decent bear reversal bar, the bears must make the market sideways for several bars. This would increase the number of bulls selling out of longs and bears beginning to establish shorts.

• Overall, the odds favor a trading range and a test of the November 15^th low. However, the daily chart may have to go sideways to up for several bars before the bears can reverse down.
   

Emini 5-minute chart and what to expect today
 

• Note: I am traveling in Europe and typing today’s report at 4:00 AM EST. The market may look very different once this report is released.

• The Overnight Globex market (60-minute chart) has been inside of yesterday’s late tight trading range.

• Last Friday formed a strong bull breakout, and the odds favored a 2nd leg up on the 60-minute chart. Yesterday, I formed a second leg up for the Bulls.

• The Globex chart forms a triangle that makes the market breakout mode.

• Traders should assume that today, there will be a lot of trading range price action on the open. Traders should consider waiting for 6-12 bars before placing a trade unless they can use wide stops and are quick to make decisions.

• Traders should pay attention to yesterday’s high. It is likely a magnet, and there are probably sellers above its high.

• Today will probably disappoint the bulls, leading to a trading range day.

• The most important thing on the open is to be patient and not rush to place a trade.

• There is an 80% chance of a trading range open and only a 20% chance of a trend from the open up or down.