Pre-Open market analysis
The bulls want a 6th consecutive bull trend day. There is a measured move target at 2759.75 based on Friday’s gap up. The Emini is also around the 2750 Big Round Number. Finally, the 60 minute chart is still in a parabolic wedge rally. These are all reasons for traders to be ready for a bear trend day today or tomorrow. The 1st pullback in a strong bull trend usually lasts 1 – 2 days.
The momentum up is strong. Consequently, the odds are the bulls will buy the pullback. The bears will probably need at least a micro double top before they can begin a move down to last week’s low. Remember, last week was probably an exhaustion gap bar on the weekly chart. Its low is therefore a magnet.
Since last week was a possible exhaustion move, traders will look for a micro double top this week on the daily chart. If the bears get it, they will have a 40% chance of a test of last week’s low within the next 3 weeks.
Overnight Emini Globex trading
The Emini is up 5 points in the Globex session. It will therefore possibly gap up to another all-time high. Since the 5 day rally is extreme, the odds favor a pullback for a day or so beginning today or tomorrow. The past 2 days had strong bear bars on the open. Both days reversed up. However, this is a sign of increasing selling pressure. Therefore, if today again opens with bear bars, there is an increased chance of a trend down.
Yesterday’s setups
Here are several reasonable stop entry setups from yesterday. I sometimes also show limit order entries and entries on the close of bars.