Today is the last day of the month so monthly support and resistance are magnets, especially in the final hour. The ones within reasonable reach are the open of the month of 2076.75, the high on the daily chart of the August bear trend of 2092.25, the high of last month of 2088.25, the high of the month of 2110.25, and the all-time high of 2117.00. The Emini has been near the open of the month for 6 days, so today will give day traders a chance to learn how to trade a doji candlestick pattern as the market decides between a doji and a trend bar just before the bar closes.
The Emini has stalled in a tight trading range for 6 days at the August top of the bear trend. It is currently up about 3 points in the Globex markets, and about 2 points above that resistance. If the bulls can break above it, the next target is the high of the month at 2110.25. Because there are so many targets just above and there is so little time left in the month, the odds of a bull trend day today are higher than usual.
Whenever traders believe that the odds of something are increased, traders learning how to trade the markets must realize that the odds of the opposite are also increased. This is because if there are more traders willing to buy as the market is going up, there will be more bulls swing trading than usual. If they are disappointed by the rally, there will be more bulls eager to sell out of their positions today, which can result in a bear trend, or a rally that reverses into a bear trend. Those who trade the markets for a living will be ready to swing trade up or down, depending on whether the price action has good momentum in either direction.
The Emini sold off in the Globex market and then reversed up strongly for the past 5 hours. It did so in a spike and channel bull trend, which is a buy climax candlestick pattern. It had a third push up about an hour ago, and wedge tops need at least 3 pushes up for traders to conclude that the pattern is a wedge. A strong bull breakout followed by a wedge bull channel (a spike and channel rally) usually has a bear breakout below the wedge and then is followed by a trading range. There is a bull breakout and acceleration up about 25% of the time. If there is a pullback from the buy climax, the targets for the bears are the 2 higher lows in the wedge. The result is usually a trading range lasting at least 10 bars, even if the bears are unable to reach the bottom of the wedge channel of 2087.25.
The Globex market has been going sideways for about an hour and has barely broken below the rising wedge, which means that there is very little enthusiasm for a selloff and the correction from the wedge buy climax might therefore be sideways instead of down. However, it is also enough of a pullback to relieve the overbought condition in the Globex market, and it could be followed by trend resumption up once the day session opens. This could result in a strong bull trend day from the open.
If so, the Emini might continue sideways for the first hour today before deciding whether to continue up to the monthly targets above, reverse down, or form a 6th doji day in the past 7 days, which would create a doji candlestick pattern on the monthly chart when the month closes at the end of the day.