Yesterday was an outside up day, which is bullish. E-mini bulls want to test bull channel top on weekly chart at 4775.
It barely closed back above the 4700 Big Round Number and just below the all-time high, which is disappointing for the bulls.
After 4 sideways days at resistance, there should be a breakout up or down soon.
The bulls want a close above the Nov. 5 all-time high.
If the week closes near the high of the week, that would increase the chance of a gap up on the weekly chart next week.
It would also increase the chance that the E-mini will test bull channel top of the weekly bull channel, which will be around 4775 next week.
If the week closes near the low, there will be a micro double top on the weekly chart, which would increase the chance of lower prices next week.
Today is Friday and weekly support and resistance can be important, especially in the final hour.
The bulls want the week to close at a new high. Therefore, the Nov. 5 high of 4711.75 is a magnet.
The bears want the week to close below that high and below last week’s high.
They also want the week to close below the open of the week. This week would then have a bear body, which would increase the chance of sideways to down trading next week.
E-mini 5-minute chart and what to expect today
E-mini is down 2 points in the overnight Globex session. It should open near the middle of yesterday’s trading range. It therefore might continue sideways, as it has been doing for 4 days.
However, the E-mini has been in a tight bull channel for 7 days on the 60-minute chart. A bull channel is a bear flag since there is a 75% chance of a break below the channel and then a swing sideways to down.
There have been swings up and down during most recent days. Traders are deciding if the rally will break strongly above the all-time high and reach the top of the weekly channel, or reverse down from a double top with the Nov. 5 high.
In either case, there can be a strong trend. If there is a series of strong trend bars in the first hour in either direction, traders will look for a trend day.
But if there is hesitation and reversals, they will expect at least one swing up and one swing down today.
Yesterday’s E-mini 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. 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.