The Emini's 3 month rally has been losing momentum for several weeks. Traders expect a 50% retracement but think the Emini might have to test the gap above the February 24 high first.
Last week was a bear bar on the weekly chart. It is a Low 2 sell signal bar for this week. The bears see the 3 month rally as a lower high double top with the February high.
But the bull trend has been very strong and the Emini has been sideways for a month. This is a weak sell setup. Consequently, even if the Emini falls below 2700 over the next few months, the bulls will buy the selloff. They expect a test of the June high after a surprisingly strong rally.
Tomorrow is the last day of the month. The bulls want a bull body on the monthly chart. However, the bears want June to close near its low. That would increase the chance of lower prices in July.
With the Emini sideways for 4 weeks and tomorrow being the end of the month, traders might wait for July to decide on the direction of the next several weeks. This increases the chance of the Emini staying around the open of the month through tomorrow’s close.
LOW 2 TOP ON THE WEEKLY CHART
The bears want today to go below Friday’s low. That was the low of last week. If today fell below, it would trigger a weekly Low 2 top sell signal.
But the Emini has been in a trading range for 4 weeks. Most trading range breakout attempts fail. Consequently, the bears need more to convince traders that they are in control. They need a close far below Friday’s low and follow-through selling for several days. Without that, the Emini will continue to be neutral
OVERNIGHT EMINI GLOBEX TRADING
The Emini is up 8 points in the Globex session. Friday was a Spike and Channel Bear Trend. That typically leads to a test of the start of the channel and then a trading range.
Friday’s bear channel began exactly at the open of the month, which is already an important target. The Emini has oscillated around it for 3 days. Coming into the day, traders expect at least a couple hours of trading range price action today, and it could last all day.
With the Emini is a trading range for a month, there is an increased chance of trading range trading on the 5 minute chart. Also, Thursday’s unemployment report is important. That is another reason why the Emini might stay sideways this week.
Finally, the Emini is near the bottom of the range. That increases the chance of a bounce early this week.
This week’s seasonally bullishness increases the chance of a bounce. This is true despite last week being a sell signal bar on the weekly chart. But a strong selloff far below last week’s low would shift the odds in favor of lower prices for several weeks.
Emini bear trend from the open and then bear channel Emini bear trend from the open and then bear channel
Here are several reasonable stop entry setups from Friday. 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.
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.