After a massive collapse in the broader market last week, and in the E-Mini S&P 500 futures contract in general, we could be looking at another round of volatility tomorrow. Here’s why..
50-Point Triangle
The 5-minute chart of the E-Mini S&P 500 shows price coiled throughout Friday’s trading, revealing a large triangle with a 56-point back end. Typically, this type of formation forecasts a breakout move worth about the size of the back end (56 points), which means another big move could be seen.
Since the market dropped so sharply last week, a rebound week could be upon us, so watch for a potential upside break from this triangle tomorrow.
An upside push through 1,212 could signal the type of break needed for a serious advance, likely toward 1,240 – and potentially toward 1,260.
However, a breakout in either direction from this pattern could spark major movement, so keep an eye on 1,185 for signs of weakness.
Lower Value Relationship
Obviously, the market has been very bearish, which is evidenced by the Lower Value relationship that has formed with regards to the Value Area. This is indicative of continued weakness.
If price opens below 1,180, look to sell into any strength between 1,200 and 1,210.
However, if price gaps above 1,220 to open the session, this could signal a nice buying opportunity. Look to buy into any weakness between 1,215 and and 1,200.
MTA Recorded Webinar Link
The MTA webinar from July 27 has been very well received! Thank you all for the great feedback and the kind words.
Once again, here’s the link to watch (or re-watch) the webinar: CLICK HERE. Remember, it’s FREE!
Oh, if you watch to the very end (about 65 mins), you’ll see a special offer.
Lots to look forward to tomorrow. Let’s see how this one plays out!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss
