Pre-Open Market Analysis
The daily chart is testing the 200-day moving average. That chart also now has a parabolic wedge bull channel over the past 5 weeks.
Furthermore, the 8 consecutive bull bars on the weekly chart is unusual and therefore unsustainable. That makes it a buy climax. Consequently, the odds favor a pullback lasting at least 2 – 3 weeks. Yesterday might be the start, but the momentum up is strong enough for the Emini to go higher for several more days.
The Emini formed a bear trend reversal bar yesterday on the daily chart. It is a sell signal bar for today. But, it is only a doji and therefore a low probability top. If the bears begin to form bear trend days over the next few days, the odds will be that a 100 – 200 point correction has begun.
Since yesterday was a pause in the bull trend, it is a High 1 bull flag. However, a bear bar at the resistance of the 200 day moving average and in the 3rd leg up in a wedge is a weak buy setup. Consequently, the odds are against a big bull day.
Overnight Emini Globex Trading
The Emini is down 1 point in the Globex session. Rather than triggering a sell signal by going below yesterday’s low, today might go above yesterday’s high. If today does go above yesterday’s high, there will probably be sellers not far above.
When there is a weak sell signal bar, there is often a 2nd sell signal bar within a day or two. Therefore, there is an increased chance that any rally today will reverse back down and form another bear day today (close below the open). That would be a micro double top on the daily chart.
Most of the trading over the past 2 days has been within trading ranges. Given that a big trend up or down is unlikely, today will probably also be mostly a trading range day. Because of yesterday being a sell signal bar in a buy climax, there is an increased chance of a bear trend day today.
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.