Saturday, October 1, 2022

E-mini High 1 Bull Flag But Just Below November High


The pulled back yesterday, but reversed up from below Tuesday’s low. It is therefore a buy signal bar for today. However, the bull body was small on the daily chart, and that is a weak buy signal bar. But if today becomes a strong bull day, traders will expect a break above last week’s all-time high within a few days.

It is important to note that a rally today would form the 3rd leg up from last week’s low. If the E-mini went up today but reversed down within a couple days, there would be a micro wedge top on the daily chart. In addition, the rally would be the 2nd leg up in a double top with last week’s high. That would make traders look for at least a couple small legs down next week.

So far, this week is a small doji inside bar on the weekly chart. That increases the chance of more sideways trading for the rest of the week. But one big bull or bear day can dramatically change the appearance of this week’s candlestick.

Overnight E-mini Globex trading

The E-mini is up 6 points in the Globex session. Since yesterday is a High 1 buy signal bar and today should open relatively near yesterday’s high, day traders expect today to trade above yesterday’s high. That would trigger the daily buy signal.

Because the setup is not strong, traders are not expecting a big bull trend. But if a breakout above yesterday’s high comes from a series of strong bull trend bars on the 5-minute chart, there would be an increased chance of a big bull trend day today.

Can today be a big bear day, whether or not it triggers the buy signal? Yes, but after 3 bull days and with last week’s high being a magnet just above, the odds favor sideways to up.

I have made the point many times over the past few weeks, that most days have closed near the middle or open of the day. Since markets have inertia, day traders should expect that again today. But if there is a strong trend in either direction, day traders will bet on the trend continuing all day.

Yesterday’s setups

E-mini 5 Min

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. 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.

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