E-mini's reach 3100 target

26 févr. 2020

I posted this sell at the trendline around 3300 a month or so ago, looking for a move to 3100, but I was a little early to the party. Since that post two things lined up perfectly that told me to add to my squeezed short position. Firstly was the bearish January monthly candle in both the minis and the cash market that told me there was a strong chance we would close this month weak after a strong start to the month.

Secondly was the break of the uptrend in the RSI. We can see the previous two breaks have produced similar sell-offs. At the start of this week the RSI had bounced and was re-testing the trendline break. It failed and we all know what happened next.

Unsure how to play it from here, and will sit and watch until a clearer view presents itself. I think there's a possibility we make another high up towards 3500-3700, but the risk is certainly to the downside in the longer term. I would expect a bounce out of this area, but the RSI and length of previous corresponding moves show we could sell off a little further yet, before a meaningful bounce.