Pre-Open market analysis
Friday was a weak buy signal bar on the daily chart. There were therefore likely sellers above. Yesterday triggered the buy, but then reversed down. It broke below Friday’s low and formed an outside down day.
Last week was a weak sell signal bar on the weekly chart. By trading below last week’s low, yesterday triggered the sell signal on the weekly chart. The bears want the week to be a big bear bar on the weekly chart. The bulls would like it to close above the open and form a High 1 bull flag for next week.
While yesterday was an outside down bar on the daily chart, it had fairly conspicuous tails above and below. In addition, the daily chart is at the 20 day EMA and a 50% pullback from the rally 2 weeks ago. This signifies confusion and makes more sideways trading likely today. The bulls still want a gap up any day this week. That would create an island bottom and increase the chances that the pullback has ended.
The bears want a test of the August buy climax low. While the odds still favor a new all-time high, this pullback might last 1 – 3 weeks.
Overnight Emini Globex trading
The Emini is up 7 points in the Globex session. The bulls want yesterday to be a double bottom on the 5 minute chart. A measured move up would be above the 60 minute EMA.
When there is an outside day, like yesterday, there is an increased chance that today will be an inside way. If so, today will be an ioi bull flag and a buy signal bar on the daily chart. With the Emini likely to open in the middle of yesterday’s range, the odds of an inside day are higher. Furthermore, it is in the middle of the strong 4 day rally of 2 weeks ago. That also increases the chance of an inside day, or at least another sideways day.
While the bears want another big bear day, the 2 days of hesitation at the 20 day EMA and the 50% pullback on the daily chart make that unlikely. The bears and bulls are balanced at support. This reduces the chance of a big trend day today.
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. 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 in a position at the moment, these entries would be logical times for him to enter.