The E-Mini S&P 500 futures contract has streaked higher after forming a v-bottom reversal near 1,240 two weeks ago. The contract is now holding just beneath major resistance and could be facing a huge day tomorrow. Here’s why..
Inside Day
The E-Mini S&P 500 has formed a clear Inside Day candlestick formation in the daily timeframe, which occurs when today’s price range is inside the price range from the prior session.
As you are now very aware, this pattern usually leads to a major breakout opportunity – one that could last an entire morning, day, or longer!
As a matter of fact, big breakouts have been seen the last two times this formation has developed…both occurred in the last few weeks.
Inside Value
The 15-minute chart shows price has formed a two-day Inside Value relationship, which occurs when tomorrow’s value area is inside the value area from the prior day. This pattern usually indicates a potential breakout opportunity ahead, which coincides with the Inside Day pattern.
News and Other Stuff
Tomorrow, April 1, also marks the first day of the new month, the first day of the new quarter, and the first Friday of the month – which means the Jobs number. Needless to say, the deck is stacked for a huge day.
Also, the market is known to breakout and/or trend during the first days of the month and quarter, which fits in nicely with the technical patterns mentioned above.
The Game Plan
If price breaks the two-day price range to the downside, look to sell early, with targets at 1,315 and 1,310. The market is currently in the midst of a two-week uptrend, which means any early weakness could be a signal to buy, so keep an eye on 1,310 closely, as this would be the zone to get long for a potential reversal back toward 1,323. In essense, a downside break may not lead to a unidirectional trend day.
However, if price breaks the two-day price range to the upside, a full on trend day could occur. Look to get long with potential scales at 1,331.50, 1,337, and 1,342.
Let’s see how this one plays out!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss
Frank Nice commentary see you in SWlive later unfortunately i’m involved this afternoon so wont be trading till late good luck
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