Emini: 2nd Outside Bar Buy Signal For Minor Up Reversal
Al Brooks | May 16, 2019 01:02PM ET
The Emini yesterday formed an outside up day. This is the 2nd one in a week. A 2nd bottom attempt has a higher probability of success. There is an increased chance of a bull trend today and of a gap up.
However, the 3-week bear channel is tight. Consequently, even it the Emini rallies over the next week, it will probably form a lower high. A 2nd leg sideways to down is likely before the bulls get their new high.
h3 Overnight Emini Globex Trading/h3The Emini is up 10 points in the Globex session. Today therefore might have a small gap up. Small gaps typically close in the 1st hour.
However, because of consecutive bottoms on the oversold daily and 60 minute charts, the odds favor a rally for at least a few days over the next week. It might have begun yesterday. Consequently, day traders should be ready for an increased chance of a bull trend day today.
In addition, even if the day is a trading range day, if the daily chart is beginning a leg up, there is an increased chance of a close near the high of the day. Day traders should look for a buy setup in the final hour for a late rally.
Finally, whenever the odds of a bull trend are higher, so are the odds of a bear trend. This is because when something seems likely, there is the potential for a crowded trade. Many traders might buy early, betting on a trend. If one does not develop, they might sell and not buy again today.
The absence of buyers could then lead to a bear trend on a day that was likely to rally. If the Emini enter a bear trend, it could last all day. But, the odds favor at least a weak bull trend today and a few days of sideways to up trading.
h3 Yesterday’s Setups/h3Here 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. Buyers of the Brooks Trading Course have access to a much more detailed explanation of the swing trades for each day.
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