Trading S&P breakout to new all-time high
S&P 500 Emini: Pre-Open Market Analysis
The Emini broke to a new all-time high 2 days ago and the bulls bought again yesterday. Hence, this reaffirms the Always In Long status and it increases the chances of higher prices. While every day is a potential sell signal bar for a failed breakout above a 2 year trading range, bulls will buy the 1st reversal down. As a result, the bears have a low probability short.
The Emini is overbought on the 60 minute and daily charts. Yet, there is no reasonable top. The bears will probably need at least a micro double top before they can make the bull breakout fail. Because the 60 minute chart is overbought and at the apex of a wedge bull channel, the Emini will probably not rally too much tomorrow before it pulls back for several hours. It is also at a measured move up based on the height of the June 24 and June 27 bear breakout.
Yet, bulls will buy the pullback. They have been buying breakouts all week, which means they are eager and confident. They are looking forward to being able to buy below the high. A pullback on the 60 minute chart could last a couple of days and fall 20 – 40 points.
Trend resumption or trend reversal?
The 5 minute chart yesterday had a tight trading range after an opening rally. The bulls want trend resumption up. However, a tight trading range late in a bull trend is often the Final Bull Flag. Therefore, trend resumption up would probably be limited before the Emini reverses back into the tight trading range. The bears want the opposite. They see a major trend reversal in the tight trading range, and they are looking for a trend reversal down.
Globex session
While the Globex session is up 5 points, the Emini is losing momentum and is overbought. However, there is no sign of a top, and the momentum favors the bulls.