Pre-Open market analysis
The Emini rallied for 4 days in a tight bull channel on the 60 minute chart. This is extreme and unsustainable, and therefore climactic. It pulled back in a tight range yesterday from a 4 day parabolic wedge rally on the 60 minute chart. The high was at a measured move target based on the 60 minute chart (not shown).
A buy climax will usually pull back for 10 or more bars. This is about a day and a half on the 60 minute chart. A major reversal comes less than 40% of the time. Yesterday’s high might be the start of the pullback. Since Monday had a triangle, it is probably the Final Bull Flag. Therefore, a minimum target is a test of the apex of that triangle today or Thursday.
Overnight Emini Globex trading
The Emini is down 2.5 points in the Globex session. It therefore might gap down. This would make yesterday a 1 day island top. If so, that slightly increases the chance of a minor reversal for a few days. But, most small gaps close within the 1st hour. While a 1 – 2 day pause or pullback is likely, it can come even if today gaps down and then rallies back above yesterday’s low, closing the gap.
The one thing that is unlikely today is a strong bull trend day. The 5 minute chart’s bullish momentum has reduced over each of the past 2 days. This makes at least a small pullback likely. Therefore, today will probably be either another trading range day or a small bear day.
As always, there is a 20% chance of a big trend up or down on any day.
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.