Classic example of one of the day trading Rules of Thumb today. The rule goes like this. If you see an Exhaustion Volume signal pre-open, wait until you see another Exhaustion Volume signal during the day session to enter a reversal trade. Exhaustion pre-open is usually not enough to reverse a market – you need to have all the market participants active (or “during the full liquidity of the day” as I like to say).
Today we had pre-open blow off activity with an Exhaustion signal and we then settled back after the Open. But we were just winding up for that blow off activity and Exhaustion buying volume that shows all the buyers have bought – and that needs to be during the actual day trading session. This then sets us up for a reversal trade, which was signalled with a perfect 5 step setup.
Good luck with your Emini trading next week.