Emini had outside down reversal from the 2017 close
Pre-Open market analysis
The Emini reversed down on the open on Friday from a breakout above the top of the 3 week range. In addition, it failed to hold above the 2017 close. Both are resistance levels.
Yesterday was an outside down bar in a tight trading range on the daily chart. In addition, it had a big tail below. Hence, it is a weak sell signal bar for today. The bears want a reversal down from a failed breakout above the 3 week trading range.
However, the bar on the weekly chart was a bull bar that closed near its high. This is good for the bulls. Furthermore, the rally from the April 2 low is still intact, although the bull channel is weak. This is true despite the lack of consecutive big bull bars on the daily chart.
Therefore, the Emini has still not yet decided between a breakout and a reversal. Because the Emini is at important resistance, there is an increased chance of a trend up or down starting this week.
Overnight Emini Globex trading
The Emini is up 16 points in the Globex session. Because Friday was a big day and today will open in its middle, there is an increased chance of an inside day today.
Yesterday’s high and low are magnets, but both are far away. In addition, the Emini has been sideways for 4 days. Therefore, traders will look for reversals, betting on an inside day and a 5th sideways day.
The Emini is spending a lot of time at the top of the 3 week trading range. The odds favor either a breakout or a reversal this week. Either one will probably result in at least a couple consecutive trend days. Until there is a clear trend, traders will continue to look for reversals every 2 – 3 hours.
Friday’s setups
Here are several reasonable stop entry setups from Friday. I sometimes also show limit order entries and entries on the close of bars.