Pre-Open Market Analysis
Last week formed a pullback on the weekly chart. It was the 1st pullback in a 9 week bull micro channel. A pullback in a bull trend is a High 1 bull flag buy signal bar. The bulls triggered the weekly buy signal yesterday by going above last week’s high.
After a huge rally to just above the top of the 13 week bull channel, the Emini reversed relentlessly down. The selloff fell back below last week’s high. When there is a buy signal on a higher time frame chart, there is usually a pullback to below the entry price.
Yesterday’s Big Up, Big Down created Big Confusion. That is a hallmark of a trading range. It increases the chance of trading range price action today.
The bulls want the week to close above the top of the 13 year bull channel. More likely, today will be a trading range day and oscillate around last week’s high. In the final hour, either last week’s high or yesterday’s high (the top of the 13 year bull channel) will probably be a magnet.
Overnight Emini Globex Trading
The Emini is up 6 points in the Globex session. Yesterday was a strong bull trend for the 1st half of the day. There was profit taking for the rest of the day. That created a trading range. There is no sign that the trading range price action is changing in the Globex session. Day traders will expect it to continue today.Since today is Friday, weekly support and resistance are important. The 2 most important prices are the high of the week and the high of last week. The bears have only a small chance of the week closing on its low.The bulls want today to trend up and have the week close on its high. However, the Emini is more likely to continue yesterday’s trading range and close well below the high and possibly back near the open of the week.
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.