E-Mini S&P 500 Near Highs but Setup Suggests Limited Upside Follow-Through

E-mini Daily Chart

• The E-mini formed a strong follow-through bar on the daily chart yesterday. Now the bulls have a breakout and follow through, both closing near their highs above the daily moving average. This increases the odds that the first reversal down will be minor and the bulls will get a second leg up.
• The bulls will see the recent rally as being strong enough for a test of the all-time high.
• The bears are hopeful that they can create a lower high and prevent the market from reaching the previous all-time high.
• At the moment, the market is Always In Long and likely to get a second leg up. However, because Wednesday’s bull breakout bar is large and fairly climactic, there’s increased risk of the market needing a pullback first.
• Even if the market does pull back. The odds are that the downside will likely be limited.
• Because of all the trading range price action over the past six months, the odds are there will likely be sellers at a new all-time high if the bulls manage to get there.
• With the daily chart getting a little bit climactic for the bulls, today will probably be a disappointment for the bulls. This means that today has the increased potential of becoming a bear bar or a weak bull bar closing below yesterday’s high.

E-mini 5-Minute Chart and What to Expect Today

• The E-mini gapped up on the open and sold off sideways down to the moving average at bar 5.
• So far, the first 15 bars have had a lot of trading range price action. This increases the odds that today will continue to have a lot of trading range price action for the rest of the day.
• Traders will pay close attention to yesterday’s high, as it’s likely to be an area of resistance for the rest of the day.
• So far today’s range is small, and the market is likely to get a measured move based on today’s range up or down.
• Today is Friday, and therefore, weekly support and resistance are important. The bulls are hopeful that today will close near its high, causing the bull bar on the weekly chart to close on its high as well.
• Because today is Friday, there is an increased risk of a surprise breakout up or down late in the day, so traders must be prepared for anything.
• If today is going to be a trend day, it will likely be a trending trading range day with lots of sideways price action.

Yesterday’s E-mini Setups