Pre-Open Market Analysis
Over the weekend, I said that this week would probably not form a big bull bar on the weekly chart. That is because the past 2 weeks were big bull bars. A 3rd one late in a bull trend would be very unusual.
Yesterday tried to become an outside up day on the daily chart, but failed to get above Friday’s high. It was the 3rd small sideways day.
There is now a micro double top on the daily chart. Yesterday is, therefore, a sell signal bar on the daily chart in a 4-month buy climax. But with a bull body and 2 big weeks up, this is a weak sell setup.
I also wrote over the weekend that this week will probably not be strongly bearish. It will probably be a pause after 2 big bull weeks on the weekly chart. A pause bar is could be a doji or a small bull bar.
It is important to remember that the weekly chart has consecutive big bull bars coming late in a bull trend. There is, therefore, a 60% chance of a 5% pullback beginning within a few weeks.
Overnight Emini Globex Trading
The Emini is up 12 points in the Globex session. It might, therefore, have a small gap up to a new all-time high today. However, the past 2 days on the daily chart have been dojis. Also, this week will probably not be a big bull bar on the weekly chart. Therefore there is less of a chance of a big bull trend day today. Also, small gaps typically close early in the day.
Because the daily and weekly charts are unusually extremely overbought, traders expect profit taking soon. That means there will probably be one or more big bear days coming within a few weeks.
For example, if today gaps above yesterday’s high and then sells off to below yesterday’s low, today would be an outside down day. That would increase the chance of lower prices tomorrow. It would also increase the chance of a bear bar 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. 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.