Given recent strength off the 1,040 level and the current outside reversal pattern, we could be looking at bullish days ahead for the E-Mini S&P 500 futures contract. Here’s what I’ll be watching today..
Bullish Outside Reversal
Friday’s trading activity led to the formation of a highly bullish candlestick formation that I call the Outside Reversal pattern, whereby the current candlestick’s low price is lower than the prior day’s low, and the close price is higher than the prior day’s high. This pattern is usually indicative of a major reversal in price, so we could be looking at strength ahead for this index.
The fact that this pattern has also formed above the last line of pivot-based Camarilla support at L4 further adds to the bullish confirmation. A break above the L3 pivot level at 1,067 could lead to greater strength ahead.
Action Levels
After Friday’s morning reversal, price trended higher the remainder of the day, setting up the potential for “buying the dips” today. A morning pull-back to the 1,055 zone could be a nice zone to buy into early weakness, which could result in a move to new highs above 1,065.
Look to buy any pull-back from 1,055 to 1,060, with targets ranging from 1,070 to 1,080.
If this pattern holds true today, we could see several days in a row of this type of activity, as price trends higher toward 1,100.
Let’s see what happens!
Cheers!
Frank Ochoa
PivotBoss.com
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