The E-mini formed a bear bar on Friday on the daily chart. A bear bar is a bad buy signal bar for an E-mini weak High 2 bull flag. That reduces the chance that the overnight rally will lead to a strong bull trend. It might instead simply add another bar or two to the 7-day tight trading range.
Friday was the first time since the October 30 low that the E-mini had consecutive bear bars where the second bear bar was lower than the first. This subtle increase in selling pressure increases the chance that the Small Pullback Bull Trend might end soon.
There is a bear ioi pattern on the weekly chart. For the bulls, last week is a pullback in a tight bull channel. It is a High 1 buy signal bar. But it had a bear body, and that increases the chance that there might be more sellers than buyers above its high.
If this week falls below last week’s low on the weekly chart, it will trigger an ioi sell signal. That will increase the chance that a move down to 3500 is underway. But with the weekly chart in a tight bull channel, the reversal down would probably be minor. A reasonable target would be the start of the channel at around 3500.
The bulls want this week to close on its high to erase last week’s bear bar. That would make traders look for at least slightly higher prices next week.
Overnight E-mini Globex trading
The E-mini is up 26 points in the Globex session. It therefore will probably gap above Friday’s high, which would trigger a High 2 bull flag buy signal on the daily chart. But if the gap is small, it probably will close in the 1st hour and become unimportant.
The E-mini will open within the trading range of the past 6 days. The top of the range is 3820, which is only about 30 points above the current Globex price. Additionally, the all-time high is just a few points above that range, and it is an important magnet. Also, the E-mini has made many new all-time highs in the past couple months. This increases the chance of a bull trend day today, but not necessarily a huge bull trend.
The bears want a lower high or double top on the daily chart. They hope that the Jan. 8 all-time high is the start of a selloff down to the Nov. 10 low at around 3500.
With most of the days over the past month having at least one reversal, traders will expect at least one reversal today. But if the E-mini forms an early Small Pullback Bull Trend that lasts at least a couple hours, day traders would continue to only buy.
Friday’s setups
Here are several reasonable stop entry setups from last Friday (before holiday). I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).
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.
If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro E-mini.