Breaking News
0

Emini Minor Reversal Up From October Low And 2600 Big Round Number

By Al BrooksStock MarketsDec 11, 2018 11:09PM ET
www.investing.com/analysis/emini-minor-reversal-up-from-october-low-and-2600-big-round-number-200367214
Emini Minor Reversal Up From October Low And 2600 Big Round Number
By Al Brooks   |  Dec 11, 2018 11:09PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Pre-Open market analysis

The Emini yesterday reversed up from below the October low and the 2600 Big Round Number. Because the day closed near its high, it is a reasonable buy signal bar for today. The bulls want the failed breakout to begin a yearend rally.

However, the 5 day bear channel has been tight. In addition, yesterday’s body was relatively small. Finally, reversals in trading ranges typically disappoint traders who are hoping for a trend. Consequently, while the odds favor at least slightly higher prices, the bulls need many bull bars closing near their highs. Without that, any rally from here will probably fail within 1 – 3 days.

The reversal up from major support is bad for the bears. However, it is consistent with the weekly chart being in a trading range and the monthly chart forming a bull flag.

Disappointing breakouts and reversals are more common in trading ranges than in trends. While the Emini has sold off strongly over the past week, the selloff is still probably a bear leg in a big trading range.

The Emini is in search of a bottom. Because legs in a trading range often fall further than what might be likely, this selloff might continue to the monthly bull trend line below 2400 before reversing.

Although yesterday is a buy signal bar on the daily chart, the bulls will need several bull days before traders believe that yesterday is the final low.

Overnight Emini Globex trading


The Emini is up 33 points on the Globex chart. Today will therefore probably gap above yesterday’s high. That will trigger the buy signal on the daily chart. Because the daily chart is oversold and reversing up from support, the big gap up has an increased chance of leading to a bull trend day.

When a gap up is big, the Emini is far above the EMA. Many traders do not like to buy far above the average price. However, it also reduces the chance of a big bear day. Consequently, there is only a 20% chance of a strong bull or bear trend from the open that lasts all day.

Most of the time, the Emini has at least one reversal in the 1st hour. The bulls look to buy a double bottom or wedge bottom near the EMA.

The bears want any early rally to form either a double top or a wedge top. They want to see several bear bars closing near their lows. That would be a sign of strong bears and increase the chance of a bear trend.

A big gap up increases the chance of a bull trend day. The bulls want the Emini to hold above the EMA for at least the 1st couple of hours. In addition, they will look for High 1, 2, and 3 bull flags just above the EMA. Finally, they like to see gaps and body gaps. These are all signs of a strong bull trend. If the develop, the bulls will swing trade.

Yesterday’s setups


Emini Bull Trend Reversal Day
Emini Bull Trend Reversal Day

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. 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.

Emini Minor Reversal Up From October Low And 2600 Big Round Number
 

Related Articles

Emini Minor Reversal Up From October Low And 2600 Big Round Number

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email