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E-mini 6-day Tight Trading Range In Bull Trend

By Al BrooksStock MarketsSep 08, 2021 09:48AM ET
E-mini 6-day Tight Trading Range In Bull Trend
By Al Brooks   |  Sep 08, 2021 09:48AM ET
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E-mini daily chart

Yesterday dipped below the bottom of the 6-day tight trading range, but then closed back in the range.

Every day in September has traded through the open of the month, which tells traders that it is an important price.

September is currently the eighth consecutive bull bar on the monthly chart. That has never happened in the E-mini. If the month closes below the open, then the streak will be over.

September should become the high for the remainder of the year. If not September, then probably October.

The weekly Small Pullback Bull Trend has lasted an unusually long time and it therefore should end soon. The biggest pullback was 10% and it happened a year ago.

When a Small Pullback Bear Trend ends, it does so with a pullback that is at least 50% bigger. Therefore, traders should expect a 15 to 20% pullback to start within a month or so.

The FOMC meeting on Sept. 22 is especially important because the Fed might start to change its language after a couple years of saying the same thing. That meeting is therefore a potential catalyst for a big move up or down.

A big move up will probably be a blow-off top.

A big move down could be the start of the 15% correction. That correction can begin at any time, including a few weeks after the FOMC announcement. It might have already begun.

After 6 days in a tight trading range, traders expect another sideways day. Since this is a Breakout Mode pattern, there can be a big trend day up or down at any time. It will probably begin with a series of strong trend bars in the first hour. Without that, traders will expect a continuation of the 6-day range.

E-mini 5-minute chart and what to expect today

E-mini is down 6 points in the overnight Globex session.

This is now the third day down from the all-time high.

With most days for 2 weeks spending a lot of time sideways, traders will expect that again today. The small days might continue up to the September 22 FOMC announcement.

However, with September likely to be the high for the remainder of the year, there could be an acceleration down or a blow-off top. That means a big trend in either direction can happen at any time.

E-mini 5 Min
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. These therefore are swing entries.

It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.

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 E-mini.

E-mini 6-day Tight Trading Range In Bull Trend

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E-mini 6-day Tight Trading Range In Bull Trend

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