Pre-Open Market Analysis
Yesterday was a trading range day and a small inside day. The bulls see it as a High 1 bull flag buy signal bar. But the 3-week rally has had 3 pushes up. Consequently, yesterday is also a sell signal bar for a wedge rally.
With the Emini in a trading range for 4 months, neither signal will likely lead to a trend on the daily chart. Also, 6 of the past 7 days have had at least one reversal. Day traders will assume that today will be like those days and bet that any 2 – 3 hour trend will reverse.
The 3 week rally on the 60-minute chart has not been particularly strong. Yet, the Emini has not touched its 20-bar EMA in 30 bars. That is unusual. The Emini will probably pull back to the 60-minute EMA today or tomorrow. When the price action is not far above average, the price typically has to get back to average, at least briefly.
Overnight Emini Globex Trading
The Emini is up 9 points in the Globex session. It might therefore gap above yesterday’s high. The bulls want trend resumption up after Tuesday’s rally.But 3,000 has been resistance for 6 months. Whenever it has been there, it has gone sideways. Also, most days over the past week have had trading range price action. Finally, today is the 3rd leg up in the past 5 days. There is therefore a small wedge rally, which usually attracts profit-takers. Consequently, today will probably not be a big trend day up or down. However, if there is a trend, up is more likely than down.
Yesterday’s Setups
Here are several reasonable stop entry setups from yesterday. 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. Buyers of the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day.
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.