The E-mini’s low yesterday was above Monday’s low, and its high was below Monday’s high. Tuesday was therefore an Emini inside bar, an inside day.
Since the E-mini closed near its high, it is a High 1 buy signal bar on the daily chart. Traders see Tuesday as a sharp pullback from Tuesday’s big gap up. The bulls are hoping that Monday was the start of a leg up to a new high. They want the year to close at a new all-time high.
However, the E-mini is now in its third sideways week. Traders have been looking for reversals every few days. That reduces the chance of a big bull trend day today. Also, the day after a Small Pullback Bull Trend Day typically has at least a couple hours of sideways to down trading that begins by the end of the 2nd hour.
While the odds favor another new high this month, December so far is a small bar on the monthly chart. Therefore, the year might close around the open of the month, even if there is one more new high first. December would be a weak follow-through bar on the monthly chart after November’s big bull breakout. It would increase the chance of at least a minor reversal in January.
Overnight E-mini Globex trading
The E-mini is up 7 points in the Globex session. It therefore might gap above yesterday’s high, which would trigger the High 1 buy signal on the daily chart. However, a small gap typically closes in the first hour and is insignificant.
The all-time high is only about 5 points above the Globex high. The bulls therefore have about a 50% chance of another new high today. They would like a 2nd consecutive big bull day. However, yesterday was a Small Pullback Bull Trend. That typically results in exhaustion. Traders expect at least a couple hours of sideways to down trading to begin before the end of the 2nd hour. Also, the E-mini is at the top of a 3-week trading range. That reduces the chance of a big bull day today.
There is an FOMC announcement at 11 am PST today. Day traders should exit positions before the report and wait at least 10 minutes afterwards before resuming trading. There is usually a sharp move up and down within the 1st few minutes, and it typically takes about 10 minutes to know which will lead to a swing. Also, traders should be open to anything after the announcement. That means a bull trend, a bear trend, a reversal, or a trading range.
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. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).
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.
If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro E-mini.