Pre-Open market analysis
Yesterday was a bull inside day on the daily chart. It is therefore a buy signal bar for today. The bulls hope that Friday was a bear trap and that June/July bull trend is resuming.
But unless the bulls get consecutive closes above the top of the 4 week trading range, traders will continue to expect a break below 2800. However, the odds still favor a new high this year.
On the 5 minute chart, Friday was a Spike and Channel bear trend. That usually transitions into a trading range, which happened yesterday. There is still room to the 2890 start of Friday’s bear channel, which is a magnet just above yesterday’s high.
Overnight Emini Globex trading
The Emini is up 9 points in the Globex session. It therefore might gap above yesterday’s high and the 60 minute EMA. That would trigger a buy signal on the daily chart. Furthermore, it would erase Friday’s bearishness. Friday would then be simply a bear trap within a trading range.
But the Emini is in the middle of a month-long trading range. It has reversed every few days. In a trading range, traders expect buy and sell signals to not have much follow-through. Consequently, the bulls will start to take profits and the bears will begin to sell as any rally gets near the 2940 top of the range.
Will today become a big bull trend day? When a market starts a day in the middle of a trading range, the odds of a big trend are less. The middle of the range is a magnet. Traders tend to sell higher and buy lower. Therefore, the odds favor more trading range price action 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. 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.