PRE-OPEN MARKET ANALYSIS
The Emini closed on its high on Friday. Three of the past 5 weeks gapped up on Monday. The bulls want another gap on the weekly chart again today. There is a small chance of a big gap up to a new all-time high today.
Friday was the 8th consecutive bull bar on the daily chart. That is unusual. The last time that happened was on June 5. The Emini sold off 9% over the next 5 days. While that is possible again, it is more likely that the bulls will buy the 1st 1 – 3 day pullback. Traders expect a new all-time high this week.
The bears want a double top with the February high and then a reversal down. But with the bull trend as strong as it has been, the Emini will probably have to enter a trading range for a couple of weeks before the bears can correct down to below 3,000.
OVERNIGHT EMINI GLOBEX TRADING
The Emini is up 3 points in the Globex session. It might gap above last week’s high. But small gaps typically close in the 1st hour.
Furthermore, after 8 consecutive bull days on the daily chart, day traders expect a bear day today or tomorrow. Buy climaxes sometimes have one final surge before the profit-taking begins. While the bulls might get a huge rally to above the all-time high today, it is more likely that they are getting exhausted. This reduces the chance of a big bull day. Traders are probably looking to sell rallies as they take profits or begin to look to short for a 1 – 3 day pullback.
Additionally, while the all-time high is an important magnet and within reach today, all magnets are resistance. That further reduces the chance of a big bull day today.
Can today be a big bear day? After 8 bull days, traders are expecting profit taking for at least a day or two. It could be from a big bear day.
Friday had several legs up and down. There will probably be at least one leg up and one leg down again today.
FRIDAY’S SETUPS
EMINI 5 MIN CHART HTTPS://D1-INVDN-COM.AKAMAIZED.NET/CONTENT/PIC0B5E1BBA63B355100F9334399CC99F12.PNG EMINI 5 MIN CHART
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. Buyers of 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 Emini.
