Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Emini Heads Higher On June Unemployment Data, Reversal Potential Remains

Published 07/02/2020, 09:42 AM
Updated 07/09/2023, 06:31 AM

Yesterday was a bull trending trading range day after 2 strong bull days. Although it closed in the middle of the day’s range, it was still a third consecutive bull trend day. That increases the chance of higher prices.

This morning’s unemployment report is a potential catalyst for a big surprise up or down today. The initial move after the report was up, but there can always be a reversal of any strong move after a report.

Today is the final trading day of the week because of the holiday tomorrow. Today will probably go above last week’s high. This week would then be an outside up week on the weekly chart. That would increase the chance of higher prices next week.

What happens if the week closes on its low? That is very unlikely a strong 1st 3 days. But if it did, it would increase the chance that the Emini has begun a correction down to the middle of the 2 1/2 year trading range.

Traders need to be open to anything today. If there is a trend, up is more likely after this week’s rally.

Overnight Emini Globex trading

The Emini is up 38 points in the Globex session just after the unemployment report. Traders see that the week has been bullish and that the initial move after the report was bullish. However, they know that there is still a 30% chance that the Emini will reverse down into a bear trend day after a big move up on a report.

This week reversed up from below last week’s low. It is now trading just above last week’s high. Consequently, this week will probably be an outside up week on the day session weekly chart. Since it is occurring in a bull trend on the weekly chart, it increases the chance of at least slightly higher prices next week.

There is no strong incentive for the bulls to rally far from here today. They are already making a strong statement by forming an outside up week. All they would like is for the week to close above last week’s high. The Emini could do that by simply being in a trading range today.

But because the week has been strongly up, there is an increased chance of a bull trend day today. Can today rally to above the June high? Since that is more than 70 points above the current price, it is probably too far above. However, the Emini will probably get there at some point in July.

Yesterday’s setups

Emini trending trading range day ahead of June unemployment report

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.

Latest comments

Excellent insights as always!!
great work, great sharing, thanks
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.