Pre-Open Market Analysis
The Emini gapped up on the daily and weekly charts yesterday. The bulls are trying to get the year to close on the high after opening near the low in January.
While the Emini rallied early yesterday in a Small Pullback Bull Trend, the bars were small. Also, much of the time was within tight trading ranges. It spent a lot of time around the 3200 Big Round Number, and closed just below. That might therefore be a magnet again today.
Although the odds continue to favor higher prices, most of the days over the past 3 weeks have had a lot of trading range price action. Traders will therefore continue to expect it. It is a self-perpetuating behavior. The more trading range price action, the more traders buy low, sell high, and scalp. That results in a continuation of the behavior.
Overnight Emini Globex Trading
The Emini is up 1 point in the Globex session. It will therefore open around the 3200 Big Round Number, which was the dominant price yesterday.Since the rally over the past 3 weeks is extreme, traders expect that the bulls will take some profits soon. That would result in at least a 1 – 2 day pullback. Traders are deciding if the pullback will begin at 3200 or from slightly higher.With the bulls trying to win the year and get it to close on the high, traders expect higher prices over the remaining 2 weeks of 2019. However, most of the days over the past 3 weeks have had a lot of trading range price action. Day traders will expect more again today.Everyone knows that a strong break above 3200 or a strong reversal down can come at any time. But until there is a strong breakout, day traders will continue to look for small profits and reversals.
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.