E-mini Closed The Monthly Gap But Formed A Daily High 1 Buy Signal

 | Dec 03, 2020 09:24AM ET

Yesterday pulled back and closed the gap on the monthly chart, but not the gap on the daily chart. Yesterday closed on its high, and it is a High 1 buy signal bar for today, just below Tuesday’s all-time high. Today will probably trade above yesterday’s high to trigger the buy signal.

However, with most days for over a month having intraday reversals, traders will look for at least one reversal today. Therefore, the odds are against a big bull day today, despite a High 1 buy signal on the daily chart.

Can today be a bear day? Yesterday was a bull channel on the 5-minute chart and a bull channel is a bear flag. But even if the bears get a break below the channel, traders will expect a lot of trading range trading, like most days for over a month.

If there is an early series of strong trend bars up or down, traders will look for a trend. However, they know the odds are that it will not last all day.

h2 Overnight E-mini Globex trading/h2

The E-mini is down a couple points in the Globex session. If the day session opens around here, traders will expect that today will go above yesterday’s high. That would trigger the High 1 bull flag buy signal on the daily chart.

But because yesterday was in a bull channel, there should be a swing down at some point today. Bull channels can sometimes last 2 to 3-days, but most do not. A bull channel usually evolves into a trading range, and that requires a break below the bull trend line. Therefore, there will probably be at least a couple hours of sideways to down trading today.

However, remember that most days for over a month have had swings up and down. Therefore, traders will expect that again today, even if there is a trend up or down on the open.

h2 Yesterday’s setups/h2