Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Emini: Huge Reversal Down From August Buy Climax

By Al BrooksStock MarketsSep 04, 2020 10:12AM ET
www.investing.com/analysis/emini-huge-reversal-down-from-august-buy-climax-200536437
Emini: Huge Reversal Down From August Buy Climax
By Al Brooks   |  Sep 04, 2020 10:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Pre-Open Market Analysis

The Emini crashed on the 5 minute chart yesterday to below the open of the week. It began a reversal up from a 5 hour wedge bottom on the 5 minute chart in the final hour. That increases the chance of a continuation up early today. The open of the week is an obvious magnet.

If today closes below the open of the week, this week will be a bear reversal bar on the weekly chart. That would be a sell signal bar for a buy climax top. Traders would expect at least slightly lower prices next week.

As you know, I have been saying that the 2 streaks of 9 and 7 consecutive bull bars make a 10 – 20% sell-off likely to begin in September. It might have started yesterday. But the bears need follow-through selling today and over the next few days.

If today instead closes on its high, it will undo yesterday’s bearishness. Traders will then wonder if there will be one more new high before the selloff begins.

Overnight Emini Globex Trading

The Emini is up 5 points in the Globex session. Yesterday was a sell climax day on the 5 minute chart. The day after a sell climax has a 75% chance of at least a couple hours of sideways to up trading that begins by at least the 2nd hour.

The Emini reversed up from a wedge bottom at the end of the day yesterday. Traders expect a 2nd leg up to at least the start of the wedge, which was the 9 am PST lower high.

That is near the 3500 Big Round Number and the open of the week. Both are magnets above. Remember the bulls do not want a bear body on the weekly chart. They will try to get the week to close above Monday’s open. The closer the week closes to the low, the stronger the sell signal bar on the weekly chart will be.

The most likely outcome for today is a test of the open of the week and a trading range. There will probably be at least one swing up and one swing down.

Traders will then wait until next week to decide if yesterday was just a brief bear trap in a bull trend or the start of a 10 – 20% swing down. The bear case is currently more likely. But 1 or 2 big bull days will show that the bulls are still in control.

Yesterday’s Setups

E-mini 5 min chart
E-mini 5 min chart

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. 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.

Emini: Huge Reversal Down From August Buy Climax
 

Related Articles

Emini: Huge Reversal Down From August Buy Climax

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email