Before yesterday’s open, I talked about the cluster of support at 3200. Support and resistance are magnets that draw the market to them. Yesterday dipped below 3200 and then rallied strongly back to the resistance of the open of the week and the August low.
Remember, I have been saying that September will probably close above the August low. This is because September is an outside down month on the monthly chart in a strong bull trend. The close of an outside bar is usually above the low of the prior month when the bull trend is strong. The Emini might oscillate around that low over the final 4 trading days in September, but it should be above it when the month ends on Wednesday.
I have also been saying that this week should have a bull body on the weekly chart. This is because 4 consecutive bear bars on the weekly chart is rare. The past 3 weeks had bear bodies so this week or next week should have a bull body. The bulls will try to have this week close above the open of the week. With these 2 magnets around yesterday’s high, the Emini might get drawn back up there by the end of the day today.
Yesterday was a weak buy signal bar on the daily chart at support. Therefore, the Emini could rally for a few days. However, there is still a 50% chance of it falling to around 3000 over the next few weeks. That is the bottom of the June trading range, which is a potential Final Bull Flag and a magnet below. Also, the 3000 Big Round Number is a psychological magnet.
Emini Overnight Globex Trading
The Emini is down 13 points in the Globex session. With the magnets of the open of the week and last week’s low up near yesterday’s high, the bulls will try to get back up there at some point today. They will therefore look for a reversal up from a double bottom with one of yesterday’s lows.
The bears want lower prices next week. The chance of that will go up if today closes near the low of the day. It would then close below the 20-week EMA and near the magnet of the 100-day MA.
What is most likely? Yesterday had several big reversals. That means there is confusion. Confusion is a hallmark of a trading range. Consequently, there is an increased chance that today will continue yesterday’s trading range price action.
Because today is Friday, day traders will look for a move late in the day to weekly support and resistance. There are many reasons for support around yesterday’s low and 3200. The bears want the week to close below that support. There is resistance around yesterday’s high. At a minimum, the bulls want the week to close above last week’s low.
Yesterday’s Setups
Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. I rarely also show limit order entries and entries on the close of bars. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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.