E-Mini Reversal Down Likely

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S&P Emini pre-open market analysis

Emini daily chart

• The S&P 500 Futures formed another strong bull trend bar on the daily chart. While the rally that began on July 10th is becoming climactic, there is no sign of a top and the first reversal down is likely be minor and lead to a second leg up.
• This first reversal down will probably fail as any selloff is likely to be minor.
• The market will probably pull back for one to two bars as bulls begin to take partial profits.
• The bulls hope the market will get a measured move up based on the June trading range. The measured move of the June trading range projects up to around 4,600.
• The bears hope the rally will lead to a final flag with the June trading range and a reversal down. The bears need to develop more selling pressure before traders are convinced they can take control of the market.
• Overall, the rally is strong enough that the first reversal down will likely fail. The Bulls will look to buy any pullback for a second leg up. If the reverse down is deep, more traders will view the market as a trading range and look to exit around the June 13th high.

Emini 5-minute chart and what to expect today

• Emini is up 7 points in the overnight Globex session.
• The overnight Globex market went sideways for most of the overnight session after the bears sold off at the end of yesterday’s session.
• The bulls recently rallied above yesterday’s high early this morning.
• Today is Friday, so weekly support and resistance are important. The bulls want the week to close on its high, and the bears want to create a tail on the bar.
• Traders should expect the market to go sideways for the first 6 – 12 bars. Traders should consider not trading for the first 6-12 bars until there is clarity about the day’s structure. Most days form a breakout mode structure on the open, which means traders should expect a trading range.
• Most importantly, traders should never deny what the chart tells them. If the open starts to trend up with strong consecutive trend bars, traders should find a way to enter in the direction of the trend.

Yesterday’s Emini setups

SP500-Emini-5-Min Chart

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