S&P Emini market analysis

Emini daily chart

• The S&P 500 Emini is continuing to form a tight bull channel on the Daily chart. However, the risk is getting big for the bulls. This increases the odds that bulls will quickly take partial profits and look to buy a pullback.

• The bulls are hopeful that they will make a measured move up based on the bull breakout of the trading range (November 19th low and November 11 ^th high).

• The bears want the reversal down; however, as I have mentioned in a prior blog post, they need to halt the buying pressure.

• At a minimum, the bears must make the market go sideways. Ideally, the bears need to create bear bars closing on their lows.

• If the bears can create a bear reversal bar closing near its low, that might be enough for bulls to begin taking partial profits.

Emini 5-minute chart and what to expect today

• The Emini formed a small gap, and the first seven bars overlapped a lot.

• This increases the odds of a trading range opening and the market going sideways for the first few hours.

• There is an 80% chance of a trading range open and only a 20% chance of a trend from the open.

• The bears are hopeful that there is a trend from the open bear trend with bar 1 today. However, the market has been near the bottom of the trading range since last Friday and has several overlapping bars. This increases the odds that any selloff we get will form a bear leg in what will lead to a trading range, not a bear trend.

Friday’s Emini setups