Pre-open Market Analysis
As was likely, Friday pulled back from a new high and a 6-bar bull micro channel on the daily chart.
Also, there were buyers below Friday’s low. Friday is now a High 1 bull flag buy signal bar for today.
The bulls are trying to break above the 3,950 Big Round Number and then the even bigger 4,000 Big Round Number. Will the E-minis go far above 4,000? Too early to tell. However, it should go above Friday’s high, which would trigger the buy signal.
I said that traders would buy the 1st reversal down after a 6-bar bull micro channel in a bull trend. If today goes above Friday’s high, but the E-mini reverses down today or tomorrow, the bears will have a micro double top. If either day closes on its low, there would then be a Low 2 top, as well as a higher high double top with the Feb. 16 high. That would be a credible sell signal.
However, even a good sell signal only has a 40% chance of leading to a trend reversal. Consequently, if the bears get their micro double top, it will more likely be minor. Traders expect a test of 4,000 in March.
The past 2 days were small and had reversals on the 5-minute chart. This is not yet a strong breakout above the Feb. 16 high. It increases the chance that today will be sideways again as well. However, with the E-mini near a critical price (4,000), there is an increased chance of a big trend day in either direction early this week.
Overnight E-mini Globex Trading
The E-mini is down 1 point in the Globex session. If it opens around here, traders will expect today to trade above Friday’s high, which would trigger a High 1 buy signal on the daily chart. But with the E-mini stalling for 2 days at the prior high, traders will look for another sideways day again today. But if there is a series of strong trend bars up or down in the 1st hour, they will switch to swing trading for a possible trend day.
While it is possible for today to break above 4,000, it is unlikely to do so. This is because that is 70 points above, and the average range for the past several days is much less than that. Also, the E-mini has stalled at the February high.
Friday’s Setups
Here are several reasonable stop entry setups from Friday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).
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.
If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro E-mini.