Pre-Open market analysis
Friday was an inside day on the daily chart and last week was an inside bar on the weekly chart. By trading below Friday’s low, the bears triggered a minor sell signal on the daily chart yesterday. The bulls still might get one more leg up on the daily chart before the Emini gets a 2nd leg down to the close of 2017.
Because the October selloff is probably a sell vacuum test of last year’s close, the Emini will probably have to fall below 2689.75 within the next few weeks. It will probably gap down big today, which would trigger the minor weekly sell signal. It therefore might then get to the target within a week or two, and possibly today.
Since the Emini has been in a trading range for 8 days, traders are being quick to take profits. This creates reversals every few days. The bulls want a reversal up from the low of 2 weeks ago. However, as I have been saying, this selloff probably cannot escape the magnetic pull of the close of 2017. Therefore, any reversal up before reaching that target will probably be minor.
Overnight Emini Globex trading
The Emini is down 38 points in the Globex session. A big gap down increases the chance of a trend day. If there is a trend, a bear trend is more likely. This is especially true because of the important magnetic pull of the 2017 close. It is now only about 20 points below the Globex low.
The bulls want a double bottom with the low of 2 weeks ago. If the Emini falls to the 2017 close, the bulls will want a reversal up from there. The bears want a strong break below those support levels and a test of the February low.
Traders should find out over the next 2 weeks which is more likely. If the bulls get a series of bull trend days, then the support will hold. If instead the bears get a couple big bear days closing on their lows, the Emini will probably fall further. The next support is the May low and then the February low.
In either case, there is an increased chance of a trend day. In addition, the daily ranges will continue to be big. Therefore, even trading range days will have big swings.
Yesterday’s setups
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.