Pre-Open Market Analysis
The Emini rallied last week, but the rally lacked consecutive big bull bars. It therefore looks more like a leg in a trading range than a bull trend.
Friday closed with a bear body and it a sell signal bar for today. Since it was a doji bar, it is a weak sell signal.
Thursday gapped up so a gap down today or any day this week will create an island top. If today simply sold off and closed the gap, the gap would be an exhaustion gap. Therefore, there is an increased chance of a bear trend day today and for the start of a leg down.
Island tops, island bottoms, and exhaustion gaps are minor reversals. But, a minor reversal could last several weeks and test support around 2800.
Overnight Emini Globex Trading
The Emini is down 4 points in the Globex market. It will therefore probably open in the middle of the 2-day range. Traders are deciding if last week’s rally is a resumption of the bull trend or just a bear leg in a 3-week trading range. The more bull bars that form on the daily chart, the more likely the bull trend has resumed. The lack of consecutive strong bull days over the past 6 days makes a bull leg in a trading range more likely. That means that the odds favor sideways to down over the next week or two.
Because the Emini is testing the important January high, there is an increased chance of a big trend day up or down. However, since most of the days over the past 3 weeks have spent most of the time in trading ranges, that is likely again today.
Friday’s Setups
Here are several reasonable stop entry setups from Friday. 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.