E-mini Monthly Chart Has October ioi Breakout Mode Pattern

The E-mini reversed up on Friday from just above the September low. It is therefore a buy signal bar for a double bottom. But because it had a bear body, it is a weak buy setup. There might be more sellers than buyers above its high. But the E-mini is oversold and at the support of the bottom of a 3-month trading range. It could therefore bounce at any time. However, the bears will probably sell the 1st 2 to 3-day bounce.

On the monthly chart, October was a bear inside bar, and it followed an outside down bar in September. October is therefore a sell signal bar for an ioi breakout mode top.

The E-mini is at the top of a 3-year trading range and it is now reversing down for the 2nd time in 3 months. The E-mini will probably trade below the October low this month, which would trigger the monthly sell signal.

This could happen today but that is unlikely. If it does trigger the monthly sell signal this month, the E-mini does not have to collapse. But it would increase the chance of a break below the September low, which is the neckline of the September/October double top.

The bears want a measured move down, which would be back to the middle of the 3-year trading range, just below 2900. However, when a monthly signal triggers, there is usually a pullback. Traders will decide if the E-mini will continue down or reverse up.

With all of the trading range trading lately, traders will expect more today. But the location is important. When the market is at major support like the September low, there is always an increased chance of a big trend up or down.

Overnight E-mini Globex trading

The E-mini is up 36 points in the Globex session. It will gap far above Friday’s close and it might gap above Friday’s high. A gap above Friday’s high would create a 3-day island bottom, which is a minor buy signal.

Since there is a parabolic wedge sell climax on the daily chart, traders should expect at least a couple small legs sideways to up this week. The bears will look for a Low 2 bear flag just below the EMA and then a break below the September low. The bulls want the reversal up to continue to the October 12 lower high and then a new all-time high.

Since there is a good sell signal on the monthly chart, today’s buy signal should lead to a minor rally. Traders will then look for a break below the October low in a couple weeks.

With the daily chart oversold and at support, there is an increased chance of a bull trend day today. However, Friday had a bear body. That is therefore a weak buy signal bar. Also, there is uncertainty about tomorrow’s US election. That further reduces the chance of a strong rally today. Finally, even when there were big trend days during the 3-week selloff, the Emini spent several hours going sideways. These factors increase the chance of a lot of trading range trading today, even if there is a trend.

Can the trend be down? Of course, but if there is a trend today, up is more likely because Friday was a reversal up from a double bottom and a parabolic wedge selloff.

Friday’s 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. 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 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 Emini.