Breaking News
0

Emini Possible Minor Trend Reversal At August High

By Al BrooksStock MarketsSep 16, 2018 01:12AM ET
www.investing.com/analysis/emini-possible-minor-trend-reversal-at-august-high-200344046
Emini Possible Minor Trend Reversal At August High
By Al Brooks   |  Sep 16, 2018 01:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Monthly S&P500 Emini futures candlestick chart:
6 month rally to new all-time high


Emini Monthly Chart In Strong Bull Breakout To New All Time High
Emini Monthly Chart In Strong Bull Breakout To New All Time High

The candlestick on the monthly S&P500 Emini futures chart is a doji inside bar so far in September. The 6 month rally is likely to continue.

The monthly S&P500 Emini futures candlestick chart is having strong trend resumption up after the February selloff and then 2 sideways months. Because 2017 was so climactic, the current rally will probably stall within a few months from a 2nd exhaustion. The measured move projection based on the height of the February pullback is 3234.00 (see weekly chart). Their are other lower targets as well.

Since the 6 month rally is strong, the bulls will buy the 1st pullback. Consequently, the downside risk over the next couple of months is small.

Weekly S&P500 Emini futures candlestick chart:
Small Pullback Bull Trend at all-time high


Emini Weekly Chart Small PB Bull Trend
Emini Weekly Chart Small PB Bull Trend

The weekly S&P500 Emini futures candlestick chart has rallied in a tight bull channel since the April low. In fact, every pullback since January ended in 1 – 3 weeks. There is no reason to believe that the current pullback will be different. The odds favor higher prices.

The weekly S&P500 Emini futures candlestick chart has been rallying in a tight bull channel since the April double bottom with the February low. While last week was a sell signal bar for a failed breakout above the January high, any reversal was likely to be minor.

This is because the 6 month rally is a Small Pullback Bull Trend. That is a strong bull trend and reversals typically only last 1 – 3 bars. The bears usually need a strong minor reversal down and then some type of a double top before they can create a trend down.

Because last week was a bear bar, it was a weak buy signal bar for this week. That increases the chances that there will be more sellers than buyers above its high. If so, next week could reverse down. That would form a micro double top, as well as a higher high double top with the January high. Traders would then look for a 1 – 3 week pullback.

1st trend reversal down will likely be minor

If next week reverses down, it will form a micro double top with the high from 2 weeks ago. The bears would then have a 40% chance of a test down. A reasonable target is the 20 week EMA, which is just above 2800.

But, because the 6 month bull channel is tight, the bulls will buy the selloff. Their buying would likely lead to another all-time high. The odds favor a test of the measured move targets around 3100 and 3200 over the next several months (see the chart).

Daily S&P500 Emini futures candlestick chart:
Emini possible minor trend reversal at August high


Emini Daily Weak Rally Form Bull Flag
Emini Daily Weak Rally Form Bull Flag

The daily S&P500 Emini futures candlestick chart rallied this week after a 2 week selloff. However, the rally is weak and Friday is a minor sell signal bar for next week.

The daily S&P500 Emini futures candlestick chart has been in a bull channel since the April low. But, the 5 day rally has been weak. Since Friday has a bear body, it is a sell signal bar for Monday. The big tail at the bottom of the bar lowers the probability of a selloff. The bears will probably need a better sell signal bar next week before traders will sell.

The bears want a lower high major trend reversal (compared to the August high). Since the 6 month bull channel is tight, any reversal here will probably be minor. However, a minor reversal could last several weeks and fall to support at around 2800.

Since the Emini gapped up on Thursday, a gap down next week would create an island top. If next week did not gap down but simply closed the gap, the gap would be an exhaustion gap. Island tops, island bottoms, and exhaustion gaps are minor reversal patterns. But, a minor reversal could still last several weeks.

The importance of a major higher low

The bears need a strong reversal down to below the bottom of the bull trend channel. More importantly, they need a break below the most recent major higher low. The is the June 28 low of 2698.50. While the August 2 low of 2800.00 is important, it came after just a couple medium size bear bars in a tight bull channel. It is therefore minor. That means that a selloff to below its low would not end the bull trend.

If the bears break below the June 28 major higher low, the bull trend will have ended. The chart would then be either in a trading range or a bear trend. Until then, it is in either a trading range or a bull trend.

Emini Possible Minor Trend Reversal At August High
 

Recommended

Emini Possible Minor Trend Reversal At August High

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email