Emini April Rally Reversing Down To 2500 For Higher Low
Al Brooks | Apr 22, 2020 09:26AM ET
Yesterday sold off and tested 2706. That is 20% down from the high. If the Emini falls below that price, it will be back in a bear market. That should happen within a week or so.
However, the wedge top on the daily chart and 60 minute chart should get at least 2 legs down. It is possible that yesterday ended a brief 1st leg down. If so, the Emini could bounce to around 2800 before beginning the 2nd leg down.
That 2nd leg down will probably retrace about half of the rally. It might even reach April 1 higher low. A reasonable target is between 2500 and 2600 within a few weeks.
Traders should expect Emini to remain in a trading range for the rest of the year. Last week might be the top of the current leg up. If it is not, the top will likely not be much higher. The odds favor a test down to around 2500 within a few weeks. Traders will look to sell rallies, but they will then buy a higher low around 2500.
h3 Overnight Emini Globex trading/h3The Emini is up 34 points in the Globex market. I have been saying that there will probably be at least a couple legs down to below 2600 on the daily chart over the next few weeks.
Traders are wondering if the selloff has begun. Because there is a wedge top at resistance on the daily chart and consecutive bear days, there is better than a 50% chance that it has.
However, the daily chart will probably be in a trading range all year. When that is the case, legs up and down have bad follow-through, which means traders expect reversals every few days. Also, there will be more trading range days on the 5 minute chart.
Yesterday began to reverse up from a major trend reversal on the 5 minute chart. That reversal continued overnight, even though it is still small. It might continue again today, but there will probably be sellers around 2800, if the Emini gets there this week.
Because the daily chart is probably in a bear leg, traders expect lower highs and lows. Consequently, even if the Emini bounces for a day or two, the swing down will probably continue for a couple weeks.
h2 Yesterday’s setups/h2Here 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 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).
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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.
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