Pre-Open Market Analysis
The Emini yesterday accomplished the 2 goals that I said were likely. The bulls got a breakout above 3100 and above Thursday’s high. As expected, many bulls took some profits. There is now a micro wedge on the daily chart. The ingredients are here for a 2 week pullback. A 6th consecutive bull bar on the weekly chart would be unusual and therefore this week should close below its open.I know some technicians are predicting a 7% correction. Of course, we’ll get one, but when? I think it is more likely that the Emini sells off for 50 – 100 points over the next 2 weeks and then gets back up to today’s high. At that point, the bears would have a better chance of a 5% pullback. This is because the bears will probably need a micro double top on the weekly chart before they can get a 5% or more correction.Yesterday is a sell signal bar for today for a micro wedge top over the past 7 days. Since it had a bull body, it is a low probability sell signal bar. The bears might need a micro double top on the daily chart before they get their 2 week correction.The bulls want a breakout far above 3100. Yesterday’s profit taking from just a little above 3100 make a big breakout unlikely until after more of a pullback.
Overnight Emini Globex Trading
The Emini is down 10 points in the Globex session. There is now a credible top on the daily chart and a pullback is likely on the weekly chart. That increases the chance of more bear trend days. But for the past month, even trend days up and down have spend much of the time in trading ranges. However, there is now an increased chance of a big bear day coming at any point.
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.