Pre-Open Market Analysis
After an early trading range, yesterday entered a Small Pullback Bull Trend. Furthermore, Friday was a pause after a 2-day breakout. The odds favor at least a 1 – 2 day rally from there.
But, the daily chart is in a buy climax. In addition, the Emini is above the December 12 crash high. This is therefore the sell zone. Consequently, the Emini’s month-long rally will probably end this week.
Since the rally was strong, the bulls will probably buy a 2 – 3 week, 50% selloff. There is support around the February 2018 low and 2,500. The odds favor the pullback starting either this week or next. The first target is the 2,600 – 2,650 trading range from 2 weeks ago.
Less likely, this rally will continue up to the October – December triple top without much of a pullback.
Overnight Emini Globex Trading
The Emini is up 6 points in the Globex session. If there is a small gap up, it will probably close in the 1st hour. The huge bull bar at the end of the day was climactic. That increases the odds of a trading range forming early today.
After any relentless trend, like yesterday, there is a 75% chance of a 2-hour trading range that starts by the end of the 2nd hour. But, there is a 50% chance of follow-through buying in the 1st 2 hours. Even if the bulls buy early, there is only a 25% chance of a 2nd big bull day.
Last week was the 6th consecutive bull bar on the weekly chart. That is unusual. Therefore, it would be even more unusual for this week to be a 7th bull bar. Consequently, despite yesterday’s rally, there is at least a 50% chance that Friday will close below yesterday’s open. That would create a bear body on the weekly chart.
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. 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.