Emini Testing June High After Weekly Outside Up Candlestick
Al Brooks | Jul 07, 2020 09:14AM ET
The Emini formed an outside up candlestick last week on the weekly chart. It broke above last week’s high yesterday, but the breakout was small. The Emini is near the top of the 5 week range, which is also the June high.
With June being a doji bar on the monthly chart, July might fail to break above the June high. However, the bears will probably need at least a micro double top on the daily chart before they can get a reversal down. That means that the bulls plan to buy the 1st 1 – 2 day pullback.
The end of the quarter rally continued yesterday, but it typically ends around July 5. Consequently, traders should get a brief pullback this week.
Overnight Emini Globex trading
The Emini is down 24 points in the Globex session. It will, therefore, gap below yesterday’s close and possibly below yesterday’s low.
After a 5 day rally, traders expect a 1 – 2 day pullback. But they also think a reversal down from here will only last a day or two. That reduces the chance that a gap down today will be the start of a big bear trend day.
Can today trade below yesterday’s low and then above yesterday’s high? Yes, especially since yesterday’s range was small. But after a 5 day rally in a tight bull channel on the 60 minute chart, traders expect that a move below yesterday’s low will probably instead begin a 1 – 2 day pullback. Day traders are looking for a sideways to down day today.
A big gap down usually results in a trading range open for the 1st hour or two. The bulls will look for a double bottom or wedge bottom to buy for a swing up. The bears will look for a double top or wedge rally to sell for a swing down.
The day might spend a lot of time oscillating in a range between the 60 minute 20 bar EMA, which is just below 3140, and last week’s high, which is just below 3160 and around yesterday’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 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.
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