Pre-Open market analysis
The Emini had a small pullback bull trend day yesterday. It above the top of the 6 month bull channel. However, 75% of bull breakouts above bull channels fail within 5 bars. I always look at the highest time frame that shows the channel. Traders want legs that have at least 10 bars.
Top of bull channel
Since the legs are too small on the weekly chart, traders will pay attention to the daily chart. Therefore, there is a 75% chance of a reversal down within the next 5 days. Will it reach the bottom of the channel? It never looks like it will, but it usually does. It can get there by going sideways or down.
There are still measured move targets above. Consequently, the is a magnet that is pulling the market up to those targets. Will the daily chart reach those targets in the next 5 days and then reverse? No on knows. However, the Emini is in a buy climax and at another resistance level. Therefore traders will look for s reversal setup for a 3 month correction.
Because there is no top or strong reversal down yet, the odds still favor at least slightly higher prices.
Overnight Emini Globex trading
The Emini is up 2 points in the Globex market. Yesterday was an unusual small pullback bull trend because there was not even a little profit taking in the final hour. While this means the bulls were strong, it also makes the rally more climactic.
When there is a strong trend day like yesterday, there is a only a 25% chance of another strong trend day today. Yet, there is a 50% chance of follow-through buying in the 1st 2 hours. Finally, there is a 75% chance of at least a couple hours of sideways to down trading beginning by the end of the 2nd hour.
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.