The Emini had a wedge lower high major trend reversal that was followed by a strong bear breakout and measured move down midday. It is still in a 2 month tight trading range on the daily chart, and is now at the bottom of the range. This is the buy zone, which means that the probability favors the bulls. However, in a tight range, the probabilities hover between 45 and 55%, so neither side has a big advantage.
The bulls see a double bottom on the 60 minute chart. The bears see a double top. The 1st breakout has a 50% chance of reversing. Both sides are looking for a measured move. However, most breakouts fail, and traders will continue to take relatively quick profits until there is a strong breakout. Since today went down and is at the bottom of the range, the odds are that tomorrow will have at least a couple of hours of sideways to up trading.
See the weekly update for a discussion of the price action on the weekly candlestick chart and for what to expect going into next week.
