Emini daily chart
- o The Emini continues to go sideways following the strong rally in November. The bulls formed a bull breakout bar last Friday, and they want follow-through buying today.
- o The moving average is getting closer to the current price, and the market continues to go sideways every day.
- o The odds are high that the market will reach the moving average soon. This is because the longer the market stays away from the average price while going sideways, the more traders will want to buy closer to the average price (moving average).
- o The market may sell off over the next few days to test closer to the moving average.
- o Every strong bull close within the tight trading range over the past several weeks has led to sellers above. This means more sellers might be above last Friday’s high, leading to bad follow-through today.
- o Overall, traders should expect more sideways trading to continue, and a test of the moving average.
E-Mini 5-minute chart and what to expect today
- o Emini is down 1 point in the overnight Globex session.
- o Traders should expect today’s open to have a lot of trading range price action. This means that most traders should consider not trading for the first 6 – 12 bars unless they can make quick decisions since most reversals often fail.
- o Traders should pay attention to last Friday’s high as it will likely be an important magnet. The bulls want follow-through buying today, and the bears want to create a failed breakout above it.
- o Because the daily chart has been in a tight trading range, traders should be prepared for the market to form another trading range day. This means that traders should expect breakouts to be limited and not form a strong trend for the market.
- o If the open begins to form consecutive strong trend bars, especially a breakout out beyond support or resistance, one must not be in denial of a possible trend.
- o Most traders should focus on catching the opening swing that often begins before the end of the second hour, typically after forming a double top/bottom or a wedge top/bottom.
Friday’s Emini setups
Friday’s Emini setups
Here are reasonable stop entry setups from Friday. I show each buy entry bar with a green arrow and each sell entry bar with a red arrow. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a near 4-year library of more detailed explanations of swing trade setups (see Online Course/BTC Daily Setups). Encyclopedia members get current daily charts added to Encyclopedia.
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. These therefore are swing entries.
It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.
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.