Pre-Open Market Analysis
Last week was the 9th consecutive week with a bull bar on the weekly Emini chart. There has been only one instance in the past 20 years with a longer streak. Every streak of 8 or more consecutive bull bars led to at least 3 weeks sideways to down. That therefore is likely again here.
Will this week be the 10th consecutive bull trend bar? Probably not. Consequently, traders will look for any rally this week to reverse down. That would begin the start of a 2 – 3 week pullback.
Why hasn’t the Emini turned down yet? Because it cannot escape the gravitational pull of 2800. The Emini has repeatedly tried to break strongly above it for over a year. It failed every time, including the rally to the September high.
There is a triple top just above last week’s high. It is also a magnet. The bulls hope to break strongly above the triple top and 2800 before there is a pullback. With the continued momentum up, they will likely get their breakout today or tomorrow. However, the extreme buy climax will probably limit the rally over the next 1 – 3 weeks.
Since the Emini is very close to the targets above, it might get vacuumed up there today. There is therefore an increased chance of a big bull day today or tomorrow. But, most of the days over the past week had predominantly trading range price action. Consequently, that is most likely for today. This is true even if the Emini breaks above 2800.
Overnight Emini Globex Trading
The Emini is up 14 points in the Globex session. This week will therefore probably gap above last week’s high. In addition, it might gap above the 2800 Big Round Number and one or more of the tops in the 3 month triple top.
Because the Emini is testing major resistance, there is an increased chance of a big move up or down today. However, only 20% of days have strong trends from the open that last all day. The odds therefore favor at least one reversal in the 1st hour.
Most days enter a trading range in the first 60 – 90 minutes. The bears try to create a good sell signal bar for a wedge top or double top. In addition, the bulls try to create a reversal up from around the EMA. They want a good buy signal bar and a wedge bull flag or double bottom.
Friday’s Setups
Here are several reasonable stop entry setups from Friday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. I rarely also show limit order entries and entries on the close of bars. My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter.