S&P 500 E-Mini Bulls Likely to Be Disappointed

ESU3
+0.64%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

Emini daily chart

• The S&P 500 Futures gapped up and rallied yesterday following a bad Low 1 short on Tuesday.
• The bulls are hopeful that today will form another strong bull trend bar. However, it is more likely that today will disappoint the bulls.
• The channel down to the August low is tight. This increases the odds that the current reversal will be minor and not lead to a bear trend.
• The bulls have done enough damage to increase the odds of buyers not far below and more sideways trading.
• The bears who sold the August low are likely disappointed by the rally over the past four days. They will probably be more interested in minimizing a loss rather than making a profit. This increases the odds of a higher low above the August 18th low and at least a small second leg up.
• While the bulls have done a good job, the market is still Always In Short, which means the odds favor more sideways to down trading.
• However, the rally over the past few days increases the odds of the market being in a trading range which means there are probably buyers below the August 18th Low scaling in lower. This will limit the number of bears willing to establish new shorts below the August 18th low, assuming the market falls below it.

Emini 5-minute chart and what to expect today

• The overnight Globex market sold off during the early morning hours. However, after the strong rally yesterday, the odds favored a trading range and not a bear trend.
• The bears are trying to halt the buying pressure and convert the market into a trading range.
• The Bulls will try to get another follow-through bar today. However, the odds favor disappointment for the bulls.
• Traders should expect a trading range open and consider not trading for the first 6-12 bar unless they are comfortable with limit orders.
• By waiting for 6-12 bars, a trader will gain certainty on the day structure and have a higher probability of catching the high or low of the day.
• Most importantly, traders should be open to anything and not be in denial of what the price action is telling them.

Yesterday’s Emini setups

SP500-Emini-5-Minute-Chart

Source