Posted 7:15 a.m.
The Emini had a gap up and then a trading range open. It gapped up above yesterday’s close and initially sold off, trying to duplicate the endless pullback and small pullback bear trend of yesterday (Friday). However, since that type of price action is a low probability event, it is low probability today as well. This is a trading range open and swing traders are waiting for a reversal up from support or a reversal down from resistance. Until they, they will either scalp or wait.
Here are my observations before the open. The Emini will gap above yesterday’s close, but within yesterday’s range. Since yesterday had a big gap up and then a big trend down, the odds of a trading range today are greater. When the market goes up big and down big, traders are confused, and confusion usually leads to quick profit taking and then a trading range.
Until there is a strong breakout up or down, with follow-through, traders will assume that the legs up and down are part of a trading range and they will be quick to take profits. If there is a strong breakout with follow-through, they will transition to swing trading.
Day trading outlook for tomorrow’s Emini price action
Today was a small trading range day, although it closed at a new all-time high. The low of the day was an exact measured move down from the high of the day to the open of the day. The bull breakout of the wedge bull flag (or triangle) did not go far.
Today was a small trading range day and a limit order market. The best way to trade it was to look to buy bear closes and below bars in the lower half, and sell bull closes and above bars in the upper half, and scalp for 1 – 2 points. Most traders should trade very little or not at all when the range is so small and there are so few reliable stop entries. This week might be quiet because of Thanksgiving.
Premarket price action analysis
See yesterday’s intraday market update report for today’s premarket analysis. Once there, scroll down to the heading, Day trading outlook for tomorrow’s Emini price action.
See the weekly update for a discussion of the weekly chart and for what to expect going into next week.
Traders can see the end of the day bar-by-bar price action report by signing up for free at BrooksPriceAction.com. I talk about the detailed Emini price action real-time throughout the day in the BrooksPriceAction.com trading room, and a 2 day free trial is available.
When I mention time, it is USA Pacific Standard Time (the Emini day session opens at 6:30 am PST, and closes at 1:15 pm PST). You can read background information on the intraday market reports on the Intraday Market Update page.
