Pre-Open market analysis
After 7 consecutive bull bars on the daily chart, the Emini finally had a bear bar yesterday. However, a strong bull trend does not typically immediately reverse into a bear trend. Most traders want to see at least a small double top.
The bulls have been so eager to buy that they have been buying above the prior day’s low for 4 days. Many will be happy to finally get an opportunity to buy below a prior day’s low. As a result, there will probably be buyers not far below yesterday’s low.
There are also 6 consecutive bull bars on the weekly chart. In addition, last week’s range increased and therefore will probably attract some profit takers. Therefore, this week will probably close below its open or at least near its open. A doji bar is common after a buy climax bar.
The open will likely be a magnet all week. Since a big bear bar is unlikely, the bear body will probably be small. That means the week will probably close only a little below the week’s open. This will probably lead to mostly sideways trading around the open of the week for the remainder of the week.
Overnight Emini Globex trading
The Emini is down 8 points in the Globex session. It might gap below yesterday’s low. If so, the gap will be small. Small gaps usually close in the 1st hour. Since the daily chart is in a Small Pullback Bull Trend, traders expect the pullback to last for 1 – 3 days.
However, the weekly chart will probably form a doji bar this week after last week’s bigger bar. Consequently, the Emini might stay around the open of the week for the remainder of the week. That increases the chance of trading range price action for the rest of the week.
Because the bull trend on the daily chart is strong, traders always have to be ready for a surprisingly big bull day. But the daily and weekly charts are in buy climaxes at the top of the weekly bull channel. Consequently, there is a slightly increased chance of a big bear day soon. But the bears will probably need a micro double top first. Most likely, the Emini will be sideways for a few days.
Yesterday’s setups
