The Emini is forming a tight trading range on the daily chart that has gone on for six trading days. This is a breakout mode pattern on the daily chart.
The bulls are hopeful that the tight trading range is a pullback in the bull trend that will lead to an upside breakout.
The bears want the tight trading range to become a final flag leading to a reversal.
The Bears have done a good job making the market go sideways over the past two weeks, adding to the selling pressure. Next (LON:
NXT
), the bears need to start getting bear closes below the moving average.
Because the market is in a bull trend on the daily chart, there is an increased risk that the bulls will get a breakout above the December 6
th
high. The bears need to limit the breakout’s strength if they will get a reversal down.
Emini 5-minute chart and what to expect today
The Emini gapped up on the open and formed a second leg up to bar 6.
The bulls are hopeful that the current bull trend from the open will lead to a trend lasting all day.
However, the bar 7 rally is at last Friday’s high which is resistance. This increases the risk of the market going sideways around last Friday’s High.
The Bear formed an opening reversal with bar 8 and have now formed a 3 bar bear micro channel down to bar 10.
This increases the odds of a second leg down and a possible measured move down based on the opening range.
