Emini awaiting September central bank interest rate announcements

Focus: TECHNICAL

Al Brooks, MD Image Al Brooks, MD Professional Trader, Author, Lecturer, Brooks Price Action, LLC and Brooks Trading Course

The odds are the the Emini rally is stalling on the weekly and monthly charts. This will probably result in a trading range over the next 6 – 12 months, asserts Al Brooks.


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Monthly S&P500 Emini futures candlestick chart:
Buy climax, Emini awaiting September central bank interest rate announcements

chart 1

The monthly S&P500 Emini futures candlestick chart has not pulled back below the low of the prior bar for 10 months. This is, therefore, an 11-month bull micro channel.

The monthly S&P500 Emini futures candlestick chart’s behavior is unsustainable and therefore climactic. Each of the past 10 months has had a low above the low of the prior month. This is, therefore, an 11 bar bull micro channel. It is a sign of strong bulls because it means they have been so eager to buy that they have not even waited for a pullback. Consequently, they will be eager to buy below the low of the prior bar when they finally get the opportunity. As a result, the odds are that there will be buyers below this month’s low.

However, because the rally is so extreme, the 1st pullback might last 2 – 3 bars instead of only 1. In either case, the chance that the 1st reversal down will lead to a trend reversal is small.

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