Today rallied strongly on some midday news. It never matters what it is. All that matters is whether a trader can make money when he sees a breakout, and he clearly could today. Because today ended with a buy climax, there is a 50% chance of follow-through buying in the first hour tomorrow, and a 75% chance of at least 2 hours of sideways to down trading starting by the end of the 2nd hour. If there is no early buying, the pullback can begin on the open.
Despite today’s strong rally, and the strong rally of the past couple of months, there is still a 60% chance that the rally of the past 3 weeks will end up as a bull leg in a trading range. The Emini is search for the top of the range, which is probably around today’s high. There is about a 30% chance that the rally will continue up to a new all-time high without forming a trading range first.
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.
