Pre-Open market analysis
The Emini had a big outside up day yesterday. It formed a micro double bottom with Friday’s low, and it is therefore a buy signal bar for today.
However, the 2 week selloff did not reach the bottom of the bull channel or last week’s low. Both remain magnets below. Unless the bulls get strong follow-through buying today or tomorrow, the odds favor sideways to down to the bull trend line. It is currently just below yesterday’s low.
If yesterday is the end of the 2 week selloff, the bulls will begin to create a series of bull trend days. Day traders should therefore be ready to swing trade if today begins to trend.
Can today reverse down? Yes. Remember, there are magnets below yesterday’s low. Also, yesterday’s high stopped at a 50% pullback from the 2 week selloff. As big a bull day as yesterday was, without follow-through today, it is just a bull bar in a 4 day tight trading range.
Overnight Emini Globex trading
The Emini is down 1 point in the Globex session. If it opens here, it will be in yesterday’s 4 hour tight trading range. The bulls want trend resumption up, which is slightly more likely than a trend reversal down.
However, the Emini would not be going sideways if the bulls had a significant advantage. The bulls and bears are balanced, and day traders need to be prepared for a breakout up or down. Support below is at the 60 minute 20 bar EMA and the January high. Resistance is at yesterday’s high, which was a 50% retracement of the 2 week selloff.
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.