E-mini pre-open market analysis
Friday triggered a weak Low 1 sell signal. With Friday closing near its low, there is an increased chance of at least slightly lower prices for E-mini today. Bears want a gap down today or this week so that there would be an island top after a 7-day island bottom. However, island tops and bottoms are usually minor patterns and do not lead to trends.
E-mini is still finding itself in the middle of a month-long trading range (within a 4-month trading range) between 50- and 100-day moving averages. Friday's weak High 1 buy signal bar was the result of E-mini having a bear body while in the middle of a trading range.
Sept. 23 saw a major lower high near its 50-day MA. Both are magnets above.
A 50% chance exists that a 15% correction has begun and a 50% chance of a new high before there is a 15% correction.
Two quiet days in the middle of the 4-month trading range reduces chance of big trend today. The trading range is in Breakout Mode so a big breakout can begin at any time.
E-mini 5-minute chart and what to expect today
Today, E-mini might gap down because it was down 5 points in the overnight Globex session. That would create a 2-day island top, but since the E-mini is in the middle of a month-long trading range, it has little predictive value. If today gaps down, the gap will probably be small. Small gaps typically close early in the day.
There have been a lot of reversals over the past two days. That reduces the chance that today will be a big trend day in either direction. Traders should expect a test of the 50-day MA this week. Thursday’s high did not quite reach it. Therefore, there should be at least one bull trend day this week. However, the E-mini might test the 100-day MA and the top of last week’s 4-day tight trading range at around 4,350 first.
