Pre-Open market analysis
Wednesday was an inside day after a big bull trend day on the daily chart. It is, therefore, both a buy and sell signal bar for today.
Some brokers show Thursday on their charts. Thursday was a bear day and it traded below Wednesday’s low. While the bears see it as the start of a reversal down, it is also a pullback from Monday’s rally. It is, therefore, a High 1 bull flag buy signal bar. But because it has a bear body, it is a weak buy setup.
On the weekly chart, last week was a High 1 buy signal bar. The bulls will try to get this week to close above last week’s high. That would increase the chance of at least slightly higher prices next week.
It is important to note that today has an early close at 10:15 a.m. PST. If today has a lot of small, sideways bars for the first hour, it will probably be better to not trade and instead wait for Monday.
Can today be a big trend day? The day after Thanksgiving is usually small. Therefore, if there is a trend, it will probably not be big. But if there are a few consecutive trend bars up or down early in the day, day traders will look for a swing trade.
Overnight Emini Globex trading
The Emini is up 23 points in the Globex session. It, therefore, might gap above yesterday’s high. If so, the gap will be relatively small. The smaller a gap is, the more likely it will close.
Is this one so small that it should close? It’s borderline. The bulls will buy an early, brief selloff and try to keep the gap open. There is, therefore, an increased chance of an early low of the day, and then a bull trend day.
Yesterday’s range was small. Therefore, if today gaps up and has several consecutive bear bars, traders will look for a bear trend, and a possible break below yesterday’s low. Today would then be an outside down day at the top of a three-week range. That would increase the chance of lower prices next week.
Today is Friday, so weekly support and resistance can be important, especially in the final hour. The bulls want this week to close above last week’s high. That would increase the chance of higher prices next week.
Today will probably have a small range. If there is going to be a trend, up is more likely. But, a small day with an early close does not offer a lot of profit potential. Day traders will look for early signs of a trend and then enter early, hoping for to capture as much profit as they can in what will probably be a small day.
While a big trend day is unlikely, if there are several big bars in one direction in the 1st hour, traders will be more aggressive. That could create a big trend day.
Here are several reasonable stop entry setups from Wednesday. 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 Emini.