Pre-Open market analysis
The Emini triggered a buy signal on the daily and weekly charts yesterday. The odds are that the October low will be the low for the rest of the year. Yesterday’s rally and the October bull trend reversal are strong enough to make a test of the October 17 high likely in November.
As for whether it would have been better for the market if the Republicans maintained control, that is nonsense. The only thing that matters is what the institutions will do in response to the result. No matter what the election outcome, its effect will probably be brief. Washington is doing very little harm and very little good.
The technical picture is more important. The bulls have a strong reversal up from a wedge bottom on the daily chart. Therefore, the odds are that there will be at least 2 legs up. That means that traders will buy the first selloff. Also, they will look to sell near the October 17 high at the start of the parabolic wedge bear channel.
Overnight Emini Globex trading
The Emini is up 20 points in the Globex session. There will therefore probably be a big gap up today. Since the open will be far above the EMA, the bulls will probably not be able to get a strong bull trend on the open. Traders hesitate to buy when the price is far above average. Consequently, today will probably have a trading range open for the 1st hour where the Emini trades sideways to down to near the EMA. If today will be a bull trend day, the bulls will try to form a double bottom or wedge bottom near the EMA. The bulls will look for a reversal up.
Since the Emini will probably have at least a minor leg down in the 1st hour, the bears are hoping for a strong bear trend day. But, yesterday’s late rally was strong. Consequently, even of the bears get a strong selloff on the open, the odds are that it will be a minor reversal down to around the EMA. A trading range is more likely than a bear trend in the 1st hour. However, if the bears can continue the trading range for 2 hours, they then would be able to create a credible major trend reversal setup for a possible reversal down later in the day.
Will the gap up close today? It might, but yesterday’s strong rally and today’s gap up make it likely that the bulls will buy the selloff, even if it falls below yesterday’s high.
Yesterday’s setups
Here are several reasonable stop entry setups from yesterday. 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. 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.