E-mini pre-open market analysis
E-mini daily chart
On the first day of the month, an E-mini bear bar should form on the August monthly chart.
Friday triggered a micro double top sell signal, which also was an expanding triangle. However, Thursday was a bull bar and therefore a weak sell signal bar, especially in a strong bull trend. There was a high 1 buy signal, but it tailed; we're in a 5-day tight trading range.
E-mini has been trading sideways for 5 days in a bull trend, so odds favor at least a slightly higher move. Five sideways days increases the chance of another sideways day today.
July closed near its high, so August should trade above July at some point.
And after 6 consecutive bull bars on the monthly chart, August should be a bear bar, even if there is a new high early in the month. Traders are deciding if the streak will continue in August. Since that has not happened in more than 10 years, August should close below today’s open of the month.
Since August should have bear body, if there is a strong rally this week, it will probably be a bull trap and become the high for a few months. It should also be the start of 2 – 3 month pullback, with an increased chance of bear days in August. However, there might be a rally in the first half of the month.
E-mini 5-minute chart and what to expect today
- E-mini is up 19 points in the overnight Globex session.
- Will probably gap above Friday’s high, but not above the July high, which is an all-time high.
- Gap might be small. If so, small gaps usually close in the first hour of trade.
- After 5 sideways days, increased chance of another sideways day.
Friday’s E-mini setups
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. 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.