Pre-Open Market Analysis
The Emini has rallied for 6 weeks and it is at a new all-time high. Since the bull trend has 4 legs up and the channel is tight, the rally is a parabolic wedge buy climax. It is now near the top of the tight bull channel. Consequently, traders expect a 2 – 3 week reversal soon. However, there is no sell signal yet on the daily chart Therefore the odds favor at least slightly higher prices.
Furthermore, the Emini is getting near the top of the weekly expanding triangle top. But there is no top yet, and even a minor reversal will probably need at least a micro double top first.
Even when the bears finally get their reversal, it will probably be minor. The monthly chart is still on an oo buy signal. That makes sideways to up likely for at least a couple more months.
Overnight Emini Globex Trading
I said on Friday that this week might gap up on the weekly chart because of Friday’s strong close. The Emini is up 10 points in the Globex session. Today therefore might have a small gap above Friday’s high, which was last week’s high. However, small gaps usually close in the 1st hour.
Friday was a Small Pullback Bull Trend. That is unsustainable and therefore climactic. As a result, there is a 75% chance of at least 2 hours of sideways to down trading beginning by the end of the 2nd hour.
If the Emini enters a trading range, the bears could then try to create a major trend reversal on the 5-minute chart. Also, the rally is near the top of the month-long tight bull channel. There will probably be at least a 1 – 2 day pullback this week. The odds of a strong selloff over the next few days are small.
Friday’s Setups
Here are several reasonable stop entry setups from Friday. 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. Buyers of the Brooks Trading Course have access to a much more detailed explanation of the swing trades for each day.
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.