E-Mini Tests The Bull Channel Top
Al Brooks | Aug 24, 2021 09:30AM ET
Yesterday was the third consecutive big bull day closing near its high, and at another new all-time high, with E-mini testing the bull channel top. The next target is the 4500 Big Round Number, which is also around the top of the bull channel on the daily chart. Above that, there is resistance at the measured move at 4537 based on the pandemic crash (Feb. 19, 2020 high to Mar. 23, 2020 low).
Due to its tight bull channel, there is an increased chance of a big break above the channel and then a reversal down. That is a blow-off top, and it would probably lead to at least a couple months of sideways to down trading. Until there is a clear top, traders will continue to buy, correctly betting on higher prices.
Bears want the month to close below the open of the month at 4408.00. There are 5 trading days remaining in August, and that is within reach.
h2 E-mini 5-minute chart and what to expect today/h2E-mini was up 4 points in the overnight Globex session. Yesterday was a buy climax day; there is only a 25% chance today will be another Small Pullback Bull Trend Day. In addition, there is a 75% chance of at least a couple hours of sideways to down trading starting by the end of the second hour. This is true even though the second half of yesterday already formed a trading range.
Bears see a lower high major trend reversal in that trading range and are hoping for a break below the trading range today. They want a reversal down after 3 strong days up, but bulls will buy the first 1- to 3-day pullback. Since a trading range is Breakout Mode, that means there is about a 50% chance of a successful breakout up or down, and a 50% chance that the first breakout will fail and reverse.
h2 Yesterday’s E-mini setups/h2
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