The E-mini yesterday closed in the middle of its range, like the majority of days since late October. The yearend Small Pullback Bull Trend bull channel that began on November 10 could continue up for a few more weeks, but the E-mini will probably pull back for at least a couple weeks soon. This should begin in late December or early January.
The E-mini has also been in a tight trading range for 3 weeks. Even though yesterday made another new high, it did not break far above the top of the range. Consequently, the E-mini might still be in the range instead of beginning a new leg up. But if the bulls get consecutive big bull bars closing far above the 3-week range, traders will conclude that the rally will probably continue up for at least a measured move, based on the 3-week range.
If the E-mini reverses down this week, there will be a wedge top. The tops of 1st 2 legs up were on November 16 and December 12. Traders would expect the reversal to test the start of the wedge, which was the November 10 low, just below 3500.
With most days for 2 months having at least one swing up and one swing down, traders will expect that again today. Furthermore, most days have closed either in the middle of the day’s range or near the open. Those 2 prices could be magnets again today in the final hour.
Overnight E-mini Globex trading
The E-mini is up 17 points in the Globex session. It will therefore probably gap up to a new all-time high. The bulls want the rally to accelerate up for a measured move that is based on the 100-point height of the 3 week trading range. If they get a couple consecutive bars closing on their highs on the daily chart, traders will expect the rally to continue up. It would increase the chance of several bull trend days over the next week.
Whenever there is a breakout, there is usually about a 50% chance it will fail. The market often goes sideways for a few days, as traders decide if the breakout will continue up or reverse down. There is a slightly increased chance that the E-mini could trend up or down strongly. However, with the daily chart overbought and the E-mini gapping above a trading range, the E-mini will probably be sideways for a day or two as traders decide if the breakout will succeed or fail.
Yesterday’s 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.
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.